Gone are the days, when Latin America used to be an insignificant region for China, over fears of antagonising the US. Today, Latin America has outpaced Africa in terms of bilateral trade.
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The concept of soft power coined by Joseph Nye in the 1990s, has since become an intrinsic part of statecraft. However, the dynamics of soft power remain unclear. A state’s culture and values no longer remain the sole sources of attraction. Given the vagueness, surrounding what constitutes soft power and its application, Chinese interpretation of soft power has largely differed from that of the US.
China’s soft power projection referred to as the charm offensive encompasses all elements of soft power, except the security realm. This is an expansive view of the term when compared to the limited and restricted understanding of the concept. As soft power largely works on perception rather than objective reality, China’s charm offensive woos Latin America less because of its magnitude but more because of the hope it generates investments. As the second largest economy holding more than USD 3 trillion dollar of foreign exchange reserves, China’s economic success has drawn the attention of Latin American elites.
With the US pre-occupied with the Middle East and elsewhere, China has moved in a realm formerly understood as the American backyard. Resource rich Latin American states entice China with an opportunity to rev up the economic growth and overcome dependence on the developed markets of Europe and North America. In part, China’s interest in the region also originates from the fact that out of the 24 states that recognise Taiwan, 12 are in Latin America.
For a change, China which historically competed with Taiwan for influence proceeded to develop strategic partnerships with Brazil, Argentina, Chile, Mexico, Peru, and Venezuela, much to the dismay of Taipei and Washington. While Brazil and China are fellow member states in the BRICS grouping, sharing a coherent worldview, China and Argentina have explored avenues to jointly developing advanced weapon systems. The China-CELAC forum held in 2015 further highlighted the prospects of the relationship not being limited to the economic fora. This gives Beijing greater incentive to consolidate its position as a long-term partner to Latin American countries.
Chinese President Xi Jinping with Latin American heads of states at China-CELAC Forum, 2014 | Source: Cancillería del Ecuador/CC BY-SA 2.0However, investments in Latin America’s infrastructure, in addition to the 20 Confucius institutions set up by the Ministry of Culture have today become part of China’s soft power arsenal. There is a mutual interest in building China-Latin American relations, reflected in recent developments. Although Latin America has a circumscribed role in the Belt and Road Initiative (BRI), which aims to improve connectivity between Asia and Europe, the Chilean and the Argentine Presidents, nevertheless, attended the two-day Belt and Road Initiative (BRI) summit in Beijing on May 2017.
On the occasion, Chilean President Bachlet commented, “We think there are a lot of projects that can link Asia with or through Latin America” adding that both countries are exploring the opportunity to jointly invest in the Trans-Pacific optic fiber cable to improve digital connectivity between Asia and Latin America.
Chile and Bolivia are also prospective members of the Asian Infrastructure Investment Bank (AIIB), in which China holds 26.06 per cent of votes. Not surprisingly, as economic growth dries up in Latin America, China is the most sought for investments. China has taken the lead in infrastructure development planning to construct the Nicaraguan canal, the Trans-Amazonian highway and the two-ocean tunnel in Chile. As several studies show, that middle income countries (plentiful in Latin America) gain from infrastructure investments, the region is hopeful that Chinese investments narrows the infrastructure gap that stands at five to six per cent of their GDP.
This is accompanied by significant investments in the extractive industries of the Latin American economies. High profile deals include a USD 5 billion steel plant in Brazil, USD 4.4 billion worth of commitment in Peruvian mines and USD 16.3 billion to develop the Junin-4 oil bloc in Venezuela’s Orinoco oil belt.
Putting aside the apprehensions that accompany China’s growing investments in the region, Latin American public opinion on China has also undergone a change. Despite a limited understanding of China and a disinterest to emulate the Chinese growth model, a significant number of Latin Americans see the rise of China not as a threat rather an opportunity in the economic development of the region. In fact, as was evident in the 2013 Pew survey titled ‘global images of the United States and China,’ China received the highest positive ratings from Latin America and Africa. Subsequent surveys have reinforced and confirmed this observation.
Gone are the days, when Latin America used to be an insignificant region for China, over fears of antagonising the US. Today, Latin America has outpaced Africa in terms of trade. In 2015, total trade between Latin America and China stood over USD 200 billion compared to the USD 103 billion trade with Africa. China moreover, has become the largest trading partner of Brazil, Chile, and Peru.
The current leadership, under president Xi Jingping clearly attaches more importance to the China-Latin America relationship. As Xi aims to achieve the complete modernisation of his country by the 2035 and reclaim China’s past glory fuqiang (wealth and power), Latin America is not merely an overseas market and investment destination. Winning the hearts and minds of the Latin American public is indispensable for China as it seeks to narrow the gap with the United States. Merely cajoling political elites in states like Venezuela only translates into a partial success. As Liu Yanhua, a counsellor of the PRC’s State Council, in a speech at an OBOR seminar acknowledged that China had faced a backlash despite investing billions in infrastructure in some countries due to its lack of attention to the environment and local communities.
The author is a Research Assistant at Observer Research Foundation.
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