The great development in the volume of trade exchanges between China and Latin American countries shows the extent of Chinese penetration in the region during the past two decades.
In a report published by the Spanish magazine “Atalayar”, writer Judith Bergman says that the value of trade exchange between China and Latin American countries increased from $12 billion in 2000 to $330 billion by 2019.
The report quoted the American “Time” magazine in February as saying, “During the past four years, the Dominican Republic, El Salvador and Panama have changed their destination from Taiwan to China.”
She added that the formation of this type of alliance in Latin America gives Beijing some very important additional voices at the United Nations, and supports the appointment of Chinese figures in international institutions.
It also enables leading Chinese technology infrastructure companies, such as Huawei Huawei ZTE ZTE Wadahwa Dahua Wahikafijan Hikvision – all under the pain of US sanctions – from expanding in the region, and allowing Beijing to control the rules of trade for the next generation.
“The volume of trade between Latin American and Caribbean countries with China is expected to more than double by 2035, to exceed $700 billion,” wrote Pepe Chang, associate director of the Latin American Center at the Atlantic Council, and Tatiana Lacerda, former Brazilian foreign trade minister.
The two experts added that China is close to the volume of US exchanges with countries in the region, and could surpass it to become the first trading partner with it.
China’s share represented less than 2% of the total trade exchange with Latin American and Caribbean countries in 2000. However, this share could reach 25% in 2035. The exports of Brazil, Chile and Peru to China may reach more than 40% of their total exports, according to the two experts.
projects in brazil
The author of the report explains that Chinese companies have intensified their investments in Latin America in recent years as part of China’s Belt and Road Initiative.
As part of this initiative, Brazil signed an agreement with China last August to build the longest suspension sea bridge in the country, and it will link the city of Salvador with the island of Itaparica, at a cost of $1.2 billion. It is expected that the Chinese companies responsible for the project will use the bridge for 30 years after its completion.
Thanks to state-run China Merchants Ports, China operates the second largest container terminal in Brazil, and one of the largest in Latin America. China is currently building a new $500 million port in Sao Luiz, capital of the Brazilian state of Maranhão.
Brazil has turned into an important market for China within the Digital Silk Road, as Huawei has since 2014 become the largest provider of network equipment in the country. Huawei operates a research, development and training center in Campinas.
projects in argentina
China is also ready to start building a new nuclear power plant near the Argentine capital, Buenos Aires, next year, at a cost of $8 billion, in addition to two hydroelectric dams in southern Argentina.
And agreements worth $4.7 billion were signed with Chinese companies to modernize the railway system in Argentina, and build a new line with a length of nearly 2,000 km.
China is currently Argentina’s largest trading partner. The proportion of Argentine beef exports to China – the largest consumer of beef in the world – 75%.
“The Sino-Argentine relationship is one of the most profound in the region,” said Evan Ellis, an expert on Latin America at the Institute for Strategic Studies at the US Army War College.
Threatening American interests
The Chinese People’s Liberation Army operates a space research station in the Argentine province of Neuquén. Reuters says the space station “operates under limited supervision by the Argentine authorities.”
“Although the observatory is not openly used for military purposes, the commander of the US Southern Command considered it a concern, as it is believed to be able to intercept signals from US satellites or support other Chinese strategic purposes,” Ellis wrote.
China COSCO, the world’s third largest container shipping company and the fifth largest operator of port terminals, has signed an agreement to build a new $600 million port near the Peruvian capital Lima.
China and Peru
China is Peru’s largest trading partner, and Beijing imports 27 percent of Peruvian copper exports, as the second largest copper producer in the world.
Last year, 23.8 percent of Peruvian zinc exports went to China, and Chinese companies play a pivotal role in Peru’s mining industry.
Relationship with Chile
For its part, Chile joined China’s Belt and Road Initiative in 2018, and China is currently the country’s largest trading partner and the number one market for its fruit exports.
A Chinese state company has acquired Chile’s General Electric Corporation, one of the country’s electricity distribution companies.
What about the relationship with Colombia?
Since last August, China has started a project to build a metro line in the Colombian capital, Bogota, is also constructing a tram line and a highway in the south of the country, and has sold a fleet of Chinese-made electric buses to Colombia.
According to the author, the United States is still Colombia’s first trading partner, and the country has not yet joined the Belt and Road Initiative, but in the long run the equation may change.
In his testimony before the US-China Economic and Security Review Committee last May, Professor Ellis said, “It is not necessary to highlight the bad faith of China with regard to its activities in Latin America and the Caribbean, to realize the scale that these projects represent – now and in the future – on prosperity and democracy. and freedoms in the region, as well as a threat to the security and strategic interests of the United States.
“China’s activities in Latin America and the Caribbean are clearly consistent with its global ambitions to control the sources of raw materials and foodstuffs, and ensure that its products and services reach all markets,” he added.
