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Latin America and China: What Next for China–Latin American Strategic Relationship?
Abstract
The long neoliberal night that descended on Latin America since the military coup against Salvador Allende in Chile in 1973, began to be reversed with the arrival of Hugo Chavez to the presidency of Venezuela in 1998 inaugurating with it the Pink Tide of progressive and radical governments in the region. Pink Tide governments undertook a steady reversal of neoliberalism that included the nationalization of natural resources, poverty eradication, economic growth, social inclusion, redistribution of income, and much more. Simultaneously, most of the region began to orient itself commercially toward Asia, especially China, in a mutually beneficial relationship that through growing trade and investment links brought the two sides closer together in an unprecedented development for a region that had hitherto been firmly under the economic and political hegemony of the United States. Thus, political developments and economic trends seemed to guarantee the inexorable emergence of a new world geopolitical architecture within which Latin America would drastically rearrange its institutional and structural links with the United States, bringing about what many Latin American political leaders proclaim as the region's “second economic independence.” The growing trade, commercial, and political links between Latin America and China, especially the incorporation of Brazil to the BRICS (Brazil, Russia, India, China, and South Africa), inaugurated the rise of new institutional, political, trade, and commercial structures leading the region to seek to link its economic development to the ever expanding economic weight of the Asiatic giant. Though these highly positive developments have not quite come to a halt, they have been substantially complicated by the negative impact of the world economic crisis since 2008 and the US-led conservative, neoliberal political offensive that has already taken its toll in the victory of Macri in Argentina, the impeachment process against Dilma Rousseff and the installation of the hard-line neoliberal interim government of Michel Temer in Brazil, and the severe economic difficulties faced by Bolivarian government of Nicolas Maduro in Venezuela, just to mention the most important ones. This article seeks to examine the huge potential of Latin America's growing relations with China.
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For a comprehensive and well-informed political analysis of the process of impeachment, see Perry Anderson, “Crisis in Brazil,” London Review of Books , vol. 38, no. 8, 21 April 2016, http://www.lrb.co.uk/v38/n08/perry-anderson/crisis-in-brazil (accessed 24 October 2016); see also commentary after the parliamentary coup had been consummated, Hector Perla Jr., “Death of Democracy: Brazilian President Impeached by Majority of Senate Votes,” Council on Hemispheric Affairs , 1 September 2016, http://www.coha.org/wp-content/uploads/2016/09/Death-of-Democracy_-Brazilian-President-Impeached-by-Majority-of-Senate-Votes-for-Website-Upload-1-1.pdf (accessed 24 October 2016).
Rakesh Krishnan Sihma, “BRICS Should Prepare for ‘Braxit’: A Brazilian Exit,” RBTH, 4 July 2016, http://in.rbth.com/blogs/stranger_than_fiction/2016/07/04/brics-should-prepare-for-braxit-a-brazilian-exit_608637 (accessed 23 October 2016).
Hugo Chavez inaugurated this wave when in 1998 he stunned Venezuela's oligarchy by winning the election in 1998; after that Lula was elected president in Brazil in 2002, Nestor Kirchner in Argentina in 2003, Evo Morales in Bolivia, Leonel Fernández in Dominican Republic in 2004, Tabare Vasquez in Uruguay 2005, Michelle Bachelet in Chile in 2006, Rafael Correa in Ecuador in 2006, Manuel Zelaya in Honduras in 2006, Daniel Ortega in Nicaragua in 2007, Alvaro Colom in Guatemala in 2008, Fernando Lugo in Paraguay in 2008, and Mauricio Funes in El Salvador in 2009.
For details of the wise of the Pink Tide, see Geraldine Lievesley and Steve Ludlam (eds.), Reclaiming Latin America: Radical Experiments in Social Democracy (London: Zed Books, 2009); and on China's relations with Latin America, see Alex E. Fernández Jilberto and Barbara Hogenboom (eds.), Latin American Facing China: South-South Relations Beyond the Washington Consensus (Oxford and New York: Barghanh Book, 2010).
Mexico is dominated territorially by about a dozen drug cartels in a situation where in the last 6 to 7 years possibly up to 200,000 people have been assassinated, with Mexico exhibiting all the characteristics of a failed state (June S. Beittel, “Mexico: Organised Crime and Drug Trafficking Organizations,” Congressional Research Service, 22 June 2015). Though since NAFTA in 1994 Mexico is heavily tied up to US trade such that about 80% of its exports go to the United States, its imports from the United States have declined from 83% in 1996 to 54% in 2013, with China taking 16% of the share and becoming Mexicos' second-leading supplier of imports (M. Angeles Villareal, “U.S.-Mexico Economic Relations: Trends, Issues and Implications,” Congressional Research Service, 20 April 2015, p. 3).
Osvaldo Rosales and Mikio Kuwayama, China and Latin America and the Caribbean: Building a Strategic Economic and Trade Relationship (Santiago: ECLAC, 2012), p. 243. Thus, even in this heavily US-dominated country, China has become a leading partner of Mexico and serious competitor to the United States.
CEPAL, “Panorama Social de America Latina,” 2015, pp. 10 and 32.
OCDE/CEPAL/CAF, “Perspectivas económicas de América Latina 2016: Hacia una nueva asociación con China,” OECD Publishing, Paris, 2015, http://dx.doi.org/10.1787/9789264246348-es.
In Venezuela, the right wing managed to win a huge majority in the national Assembly in the December 2015 parliamentary elections (see Francisco Dominguez, “Right Wing Majority in Venezuela's National Assembly: The Constitutional and Political Stakes,” The Huffington Post , 27 January 2016, http://www.huffingtonpost.com/dr-francisco-dominguez/right-wing-majority-in-ve_b_9069350.html [accessed 30 October 2016]); in Ecuador, the governing Alianza Pais party led by Rafael Correa, lost Quito, the country's capital city to the right opposition (“Correa Government Loses Ecuador Capital in Local Election,” Reuters , 24 February 2014, http://www.reuters.com/article/us-ecuador-election-municipals-idUSBREA1N0WV20140224 [accessed 30 October 2016]); and in Bolivia, Evo Morales lost a referendum to allow him to run for president for the fourth time (“Bolivia President Evo Morales ‘Loses’ Fourth Term Bid,” BBC , 22 February 2016, http://www.bbc.co.uk/news/world-latin-america-35628093 (accessed 30 October 2016).
In less than 100 days, the Macri administration's ferocious neoliberal policies have created 1.4 million more poor people and up until April 2016, over 64,000 workers in the public sector were laid off; see Roberto Lampa, “Argentina's Honeymoon with Macri Is Over,” The Huffington Post , 13 June 2016, https://www.opendemocracy.net/democraciaabierta/roberto-lampa/argentina-s-honeymoon-with-macri-is-over (accessed 31 October 2016).
In this regard, see Alex E. Fernández Jilberto and Barbara Hogenboom (eds.), Latin America Facing China: South-South Relations Beyond the Washington Consensus (New York and Oxford: Barghahn Books, 2010.
This conclusion has not been a recent discovery; in fact, as early as 1995, Peter Nolan wrote a revealing analysis of how China by not following the Soviet Union's application of shock therapy after the fall of Gorbachev and the rise of Yeltsin, largely accounts for China's enormous success in Deng's economic reform (Peter Nolan, China's Rise, Russia's Fall: Economics and Planning in the Transition from Stalinism (Palgrave Macmillan, 1995)).
John Ross, “China's Achievement Is Literally the Greatest in World Economic History,” Key Trends in Globalization , 19 February 2012, http://ablog.typepad.com/keytrendsinglobalisation/2012/02/chinas-achievement.html (accessed 31 October 2016).
Wayne M. Morrison, “China's Economic Rise: History, Trends, Challenges, and Implications for the United States,” US Congressional Research Service 7-5700 www.crs.gov RL33534, 21 October 2015, pp. 2–3.
Wayne M. Morrison, “China's Economic Rise: History, Trends, Challenges, and Implications for the United States,” 21 October 2015, Congressional Research Service, p. 6, https://www.fas.org/sgp/crs/row/RL33534.pdf (accessed 14 June 2017).
China Overview, “The World Bank,” 6 April 2016, http://www.worldbank.org/en/country/china/overview (accessed 14 June 2017).
See, for instance, Joseph O'Mahoney and Weng Zhang, “China's 1989 Choice: The Paradox of Seeking Wealth and Democracy,” The Wilson Quarterly , Fall 2014, refer to it as “The Greatest Escape from Poverty in the History of Humanity,” http://wilsonquarterly.com/quarterly/summer-2014-1989-and-the-making-of-our-modern-world/chinas-1989-choice-paradox-seeking-wealth-and-democracy/ (accessed 29 June 2016).
Obviously, a discussion of the nature of China's development requires a much broader and more complex discussion, but for our purposes here, what we have indicated will suffice.
Osvaldo Rosales and Mikio Kuwayama, “China and Latin America and the Caribbean Building a Strategic Economic and Trade Relationship,” ECLAC , Santiago, Chile, April 2012, p. 33.
Stephany Griffith-Jones, Li Xiaoyun and Stephen Spratt, “The Asian Infrastructure Investment Bank: What Can It Learn from, and Perhaps Teach To, the Multilateral Development Banks?” IDS , Evidence Report No179, March 2016, pp. 4 and 26.
Humphreys et al., “Multilateral Development Banks in the 21st Century: Three Perspectives and the Asian Infrastructure Investment Bank,” Overseas Development Institute, November 2015, p. 14.
Andrew Mayeda, “IMF Approves Reserve-Currency Status for China's Yuan,” Bloomberg , 30 November 2015, http://www.bloomberg.com/news/articles/2015-11-30/imf-backs-yuan-in-reserve-currency-club-after-rejection-in-2010 (accessed 3 November 2016).
“BRICS Bank Approves First Loans, $811MN Investment in Renewable Energy Projects,” Russia Today , 16 April, 2015, https://www.rt.com/business/339797-ndb-first-project-loans/ (accessed 29 June 2016).
BRICS, Ministry of External Relations, “Presentation,” http://brics.itamaraty.gov.br (accessed 29 June 2016).
Stephany Griffith-Jones, “The Asian Infrastructure Investment Bank: Changing Development Finance Architecture,” in Humphreys et al., op. cit., p. 8
Mark Weisbrot, “The Political Economy of Argentina's Settlement with Vulture Funds,” Latin America in Movement , 14 March 2016, http://www.alainet.org/en/articulo/176036 (accessed 3 November 2016).
“Brazil Approves Handing Pre-Salt Oil Reserves to Multinationals,” Telesur , 5 October 2016, http://www.telesurtv.net/english/news/Brazil-Approves-Handing-Pre-Salt-Oil-Reserves-to-Multinationals-20160912-0035.html (accessed 3 November 2016).
For the US debt, see Federal Budget in Pictures. http://federalbudgetinpictures.com/us-debt-exceeds-19-trillion/ (accessed 3 November 2016); and for the budget deficit, see Congressional Budget Office, “Updated Budget Projections 2016–2026,” March 2016, p. 9.
American Association of Civil Engineers, “2013 Report Card for America's Infrastructure,” http://www.infrastructurereportcard.org (accessed 3 November 2016).
Alicia Barcena et al., “Latin America and the Caribbean and China Towards a New Era in Economic Cooperation,” ECLAC , May 2015, p. 36.
Michael Diaz Jr. and Robert Q. Lee, “China's Rising Interest in Latin America,” China Business Review , 1 September 2009, http://www.chinabusinessreview.com/chinas-rising-interest-in-latin-america/ (accessed 14 June 2017).
“China a la conquista de Latinoamerica,” Russia Today , 21 November 2016, https://actualidad.rt.com/actualidad/192245-china-inversiones-proyectos-america-latina (accessed 3 November 2016).
“Venezuela recibe nuevo préstamo de China por US$5.000 millones,” El Mundo , 2 September 2016, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/maduro-anuncia-nuevo-prestamo-de-china-por–5-000-.aspx (accessed 3 November 2016).
The Canal project has been surrounded by some controversy, and there were fears that it might not go ahead because of financial difficulties faced by the HKND Group; however, Global Construction Review reported in March 2016 that works will start in August 2016 (“Enabling Works on Nicaragua Canal to Start in August, HKND Says,” http://www.globalconstructionreview.com/news/enabling-works-nicaragua-ca7nal-star7t-aug7ust/ [accessed 29 June 2016]).
All the information about the China-Brazil Strategic Partnership and later offshoots come from Relacoes Exteriores, n.d., http://www.itamaraty.gov.br/en/ficha-pais/5988-people-s-republic-of-china (accessed 8th July 2017).
Data from Trading Economics for Brazil, period 2003–2016, http://www.tradingeconomics.com/brazil/gdp (accessed 3 November 2016).
OECD/ECLAC/CAF, “Latin American Economic Outlook 2016: Towards a New Partnership with China,” OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264246218-en (accessed 14 June 2017).
OECD/ECLAC/CAF, “Latin American Economic Outlook 2016,” p. 15.
OECD/ECLAC/CAF, “Latin American Economic Outlook 2016”, p. 17
Barcena et al., “Latin America and the Caribbean and China,” pp. 13–14.
Barcena et al., “Latin America and the Caribbean and China,” p. 21.
Barcena et al., “Latin America and the Caribbean and China,” p. 4.
Carlos Casanova et al., “Measuring Latin America's Export Dependency on China,” BBVA Research Working Paper, No 15/26, Hong Kong, August 2015, p. 12, https://www.bbvaresearch.com/wp-content/uploads/2015/08/15-26_Working-Paper_China-and-Latin-America.pdf (accessed 14 June 2017).
Alicia Barcena et al., “People's Republic of China and Latin America and the Caribbean Ushering in a New Era in the Economic and Trade Relationship,” ECLAC, Santiago Chile, p. 31.
Thus, prominent media, as through responding to a single command, have published articles with titles such as “Is the Latin American Left Dead,” New Republic , 18 April 2016; “The Death of the Latin American Left,” The New York Times , 22 March 2016; “The Sad Death of the Latin American Left,” Foreign Policy , 10 December 2015; “Latin America; The ‘Pink Tide’ Turns,” Nick Caistor, BBC News , 11 December 2015, http://www.bbc.co.uk/news/world-latin-america-35060390 (accessed 3 November 2016).
The exception is the FSLN in Nicaragua, which has gone from winning the 2006 presidential election with 38%, up to over 62% in the presidential election of 2011 (Georgetown University, “Political Database of the Americas,” http://pdba.georgetown.edu/Elecdata/Nica/nica.html (accessed 4 November 2016). The governing FSLN are facing the coming presidential election on 6 November 2016, with a 60%+ rate of approval; in addition, it has “broad majority in the National Assembly, with 62 Sandinista deputies out of a total of 90. […]the FSLN won another victory (with 75% of the vote) in the local elections of 2012 and now controls 127 of the 153 municipalities and all 17 departments” (BTI 2016 | Country Report, https://www.bti-project.org/en/reports/country-reports/detail/itc/nic/ity/2016/itr/lac/ (accessed 4 November 2016).
Thus far, none of the “colour revolutions” have either been carried out or been attempted by unarmed mass civilian mobilization, quite the opposite the amount of armed violence deployed by the “peaceful colour revolutionists” has been impressive in Serbia, the Ukraine, Georgia, Kyrgyztan, Bolivia, and Venezuela, just to mention a few examples.
William Blum, Rogue State: A guide to the World's Only Superpower (Zed Books, 2006), pp. 239–241.
US agency that channels monies and training to organize sections of “civil society” in “democracy promotion” programs; USAID sponsors and holds training courses to “educate” tens of thousands of activists, funds hundreds of “NGOs,” gives financial assistance and helps establish hundreds of media outfits, “civic associations,” and even helps set up political parties (see Eva Golinger and Jean-Guy Allard, “USAID, NED y CIA La Agresión Permanente,” MINCI, October 2009).
Unsurprisingly even the BBC has been a central component of the media war against Bolivarian Venezuela; L. Salter and D. Weltman, “Class, Nationalism and News: The BBC's Reporting of Hugo Chavez and the Bolivarian Revolution,” International Journal of Media and Cultural Politics 7, no. 3 (2011): 253–273, http://sro.sussex.ac.uk/46273/1/chavez.pdf (accessed 4 November 2016) shows how intensely biased the BBC's reporting on Venezuela has been.
The “NGO” Sumate organized the campaign to collect signatures to oust Hugo Chavez through a recall referendum which was held on 15 August 2004 that confirmed Chavez; Sumate was heavily financed by the NED and Maria Corina Machado, and if there was any doubt about Sumate's allegiances and objectives, Sumate's leading light was welcome by George W. Bush in the Oval Office on 31 May 2005 (White House Photo Archive https://georgewbush-whitehouse.archives.gov/news/releases/2005/05/images/20050531_p44959-117jasjpg-515h.html (accessed 4 November 2016).
In Brazil, the de facto Temer government has put forward constitutional amendment PEC 241 which intends to abolish the state's commitment to high levels of government expenditure on health care, education, poverty eradication, and other areas of social concern thereby freezing these expenditures for 20 years. See Jorge Garcia, “Temer's PEC 241: A Bold Work of Unoriginality,” Council of Hemispheric Affairs , 28 October 2016, http://www.coha.org/wp-content/uploads/2016/10/Temers-PEC-241-1.pdf (accessed 4 November 2016).
Barcena et al., “Latin America and the Caribbean and China,” p. 170.