LATIN AMERICA MAY BE THE NEW BATTLEGROUND FOR THE SINO-AMERICAN RIVALRY - NOTHING NEW UNDER THE SUN

A t its core, history can be defined as a power competition between two actors. The ‘winner’ sets the rules to which the ‘loser’ must adhere. Now well into the 21st century chapter, can we surmise that little has really changed?

Make no mistake, new actors replace old ones, technology advances, cultures die and social practices evolve. In the grand scheme, these are minor adjustments in comparison to the actors who control the technology, the actors who make historic decisions, and the actors who define social behaviours. Those who wield power are the history-makers.

WHY LATIN AMERICA?

This power contest takes place continually all over the world. For two reasons, Latin America is a particularly inviting example. First, the actors in the arena are gargantuan. In one corner, the US stands stoic as the winner in its Soviet struggle, the talisman of the democratic system and the traditional financial bedrock of our free-market economy. Rising eerily but forcefully in the other corner is China, a competitor enriched by the US-led economic system, and with unprecedented access to the apparatus of global power.

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To accompany the enormous power-capabilities of these global behemoths is something of greater importance: the social, technological, and ideological consequences of such a contest. This article endeavours to explore the key facets of this ongoing, but already historic, Latin American meeting: its context, its outcome and its wider impacts on our history.

Since the independence wave swept through Latin America in the 1800s, the US has maintained a regional hold on power. Of course, at that time, the apparatus of power limited the ability of other actors from ever competing with the US. Technology meant that communication was reliant on geography: your neighbour heavily influenced your foreign policy. For Latin American nations, their northern neighbour with its enormous consumer demand and wealth, never ceased in its ability and capacity to satisfy trade quotas. Even as technology advanced into the 20th century, the Soviet Union could never match the US in these ways.

CHINA’S REGIONAL RISE

Now the situation has changed. China is a real and present alternative. It desires and demands Latin American products: nearly 30% of exports from Brazil, Peru and Chile are bought by China. This trend is increasing with other countries following step, and Sino-Latin trade has risen from $10 billion in 2000, to $300 billion in 2018. In sum, China has demonstrated both its capability and willingness to fulfil the US’ traditional role in the region.

For China to reach this point, in a game of stratospheric stakes with the US as a worthy adversary, has undoubtedly required supreme caution, calculation and cunning. Behind these complexities however, the fundamental basis of China’s Latin American strategy is simple. China has targeted investment toward infrastructure, the sector with which Latin America has typically struggled. For years, trends in Latin American economic

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growth have been stagnant, roughly 2.2% in 2018. Why? Because there is no framework to support growth, no labour force that can efficiently and sufficiently drive productivity, and too little tax revenue to fund internal projects. Consequently, insufficient infrastructure exposes Latin America to China, a weakness upon which any great power might feast and capitalise.

Thus, to remain economically competitive, attractive and afloat, Latin American countries must confront their infrastructure issues with haste. Chinese investment promises to suture these wounds with a rapidly expanding regional portfolio of rail, dam, port, and canal projects. In Argentina for example, nearly $5billion has been invested in rail projects to connect the Northern and Western agricultural territories with its Eastern ports.

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Without the context of this greater power game, one might view these events as fair, perhaps altruistic. Surely, more money for these countries is beneficial for all those involved, and the US can have no basis for objection if people’s lives are improved? But we cannot adopt this simplistic approach. Whilst Latin America seizes this financial offer and the subsequent infrastructural and economic opportunities for prosperity it brings, a niggling question remains: what is this agreement really going to cost?

The answer is: your sovereignty. The financial term for it is ‘collateral’. Depending on areas of investment, collateral can be taken in different ways. Perhaps this year it will be oil assets in Ecuador, or next year beef and pork quotas in Argentina? Regardless of form, collateral ensures that money must return to its lenders. We start to see China pressing its advantage in the regional power play.

AN INEFFECTIVE RESPONSE

Whilst China’s developments have provoked a US response, these reactions have either been blocked by domestic agendas or ineffective in their strategies. There is bi-partisan consensus that China is the US’ geopolitical rival. Outside this agreement, domestic attitudes have varied. In 2015, President Obama created the Trans-Pacific Partnership (TPP), promoting and liberalising trade between 12 countries on the Pacific Rim. This was quickly scrapped by President Trump in 2017, a manoeuvre in-line with his mistrust of foreign engagement. In his 2020 campaign, President Biden called for $4 billion to be invested in Central America to “catalyse growth and reduce poverty”. Thus far, his administration has put regional strategies on hold, prioritising the passing of the American Rescue Plan instead. Similar rhetoric from former US Secretary of State Mike Pompeo when visiting regional neighbours, reflected the meekness of the American response. When choosing between real investment offers from China, and pleas from the US not to engage, the choice is clear and obvious. Post-pandemic, it will be interesting to see how the US rethinks its approach to regional diplomacy, and whether Latin America will continue to be a hotly-contested Sino-US battleground. Undoubtedly and regardless of outcome, humanitarian projects funded by both sides are facades. The true intentions lie within strategic gamesmanship.

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CONCLUSION

Latin America is a new battleground for the great-power competition of our era. Far

from being in a position to object or resist, Latin American countries are within the the political will of China. The US recognises the existence of the Sino-sovereignty- grip of the global giants. For the past decade, they have been increasingly susceptible to

stealing strategy in Latin America as an extension of the Chinese international support

network. Also recognised is the need to counter it. Why? Because strategically the US

cannot afford otherwise. Whilst the US and China both wield immense power, they are

prisoners to it. Each actor’s decision-making is shrouded within constant paranoia.

It is increasingly likely that this contest will define the chapter of human history.

Conversely, it is unlikely to last, because we are simply witnessing another reiteration

of a game as old as time. Yes, the technology has changed, social attitudes have adjusted,

and military confrontations may subside to cyber-attacks. Ultimately the rules of the

game never change: the one who holds the power is the winner, albeit temporarily. No

matter how much influence China wields over Latin America, or the methods the US

exploits to regain it, this game is destined to be repeated a long time hence.

Ultimately, the US and China are governed by humans. They are limited in their ability

to rewrite the human narrative.

FIN.