Latin America divided over how to engage with China Page 1 of 3

Latin America divided over how to engage with China

Tuesday, 23 July, 2013, 12:09pm
Comment Insight & Opinion

R. Evan Ellis

How can we characterise Latin Americas foreign policy towards the Peoples Republic of
China?

My struggle to answer this question, in writing an academic article, made me realise that the
new economy of the Pacific forces us to re-evaluate how we understand Latin America and
what we mean by foreign policy.

The most important differences among the states of Latin America and the Caribbean today
with regard to China are about economics, not politics. We can distinguish the political
orientation implicit in former Venezuelan leader Hugo Chavezs attempt to enlist China in an
anti-imperialist alliance from that implied by Mexicos receipt of the Dalai Lama under the
government of Felipe Calderon. Similarly, we can contrast Bolivian President Evo Morales
declared admiration for Chinese revolutionary leader Mao Zedong with Brazils frustration
that China did not support its bid for a permanent seat on the UN Security Council.

During the dramatic expansion of Chinas engagement with

Latin America in the past decade, however, it is difficult to
identify more than a handful of non-economic issues that have Latin American
substantially shaped the agenda. scholars and
Latin American scholars and political leaders rightly observe political leaders
that the region has no coherent policy on how to engage China. rightly observe
Nonetheless, in my new study, I argue that its diversity of
responses can be understood through four overlapping
that the region
divisions: (1) north versus south, (2) populist socialist regimes has no coherent
versus market economies, (3) differences in economic structure
and (4) Pacific versus Atlantic.
policy on how to
engage China
The north-versus-south divide in the region reflects the
integration of the economies of Mexico and Central America with the United States and
Canada as a product of geographical proximity, trade accords such as Nafta and Cafta-DR,
and human ties, with many immigrants from these countries working in the United States
and sending remittances to family at home.

[1]The second divide, between populist socialist regimes

and more traditional market-oriented economies, is about
different styles of engaging China. Regimes such as those
in Venezuela, Ecuador and Bolivia focus much more on

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Latin America divided over how to engage with China Page 2 of 3

Imports from China are checked institutions of the state for building economic relationships,
at a warehouse in Mexico City. including loans for Chinese goods and services, including
Latin American relations with infrastructure projects, and the delivery of commodities
China have been based on such as petroleum by state companies to repay the loans.
economics. Photo: Reuters
Latin American states can also be divided into four clusters by economic structure, each with
different costs and benefits from engaging with China: pure commodity exporters,
industrialised exporters, small-state capital recipients and non-exporters.

Pure commodity exporters are those whose economies are focused on primary products,
without a politically significant manufacturing sector. This group includes market-oriented
states such as Chile and Peru, plus populist-socialist states such as Venezuela. In such
countries, the benefits of exporting commodities to the PRC are non-trivial, the industries
harmed by imports from China are either few or politically unimportant.

Industrialised exporters, such as Brazil, Argentina and Colombia, have significant primary
product sectors that benefit from exports from China, as well as important manufacturing
sectors damaged by competition from Chinese products. This combination helps to fuel
ongoing political debates within such countries over the question of engagement with China.

Small-state capital recipients are those that, while not exporting many goods to China,
benefit substantially from Chinese loans and investments. Most countries in this group are
the small states of Central America and the Caribbean that have diplomatically recognised
China. They initially received sport stadiums, roads and other benefits for that recognition,
but now have transitioned to receiving loan-backed infrastructure projects, such as the
Jamaica Development Infrastructure Programme (JDIP) and the San Jose-Limon highway in
Costa Rica, or commercial investments such as the Baha Mar resort and Freeport container
port in the Bahamas.

Non-exporters are those states that neither sell large amounts of goods to China, nor
receive major loans or investments from it. These are generally small states that do not
recognise the PRC, including Guatemala, El Salvador, Belize and about half of the
Caribbean. Some, such as Nicaragua and Honduras, seem poised to change categories
with prospects for major Chinese investments on the horizon, including the US$40 billion
Nicaragua canal, and a possible US$20 billion trans-Honduras railroad and infrastructure
complex.

The final division, between the states of the new Pacific Alliance, reflects the combined
imperatives of geography and political philosophy. The current members, Mexico, Colombia,
Peru and Chile plus candidate member Costa Rica, have ports and other infrastructure
oriented towards the Pacific, in combination with an approach to engage China focused on
free trade, the private sector, open competition and the rule of law.

Mapping Latin Americas foreign policy towards the PRC is clearly more about studying
economics than politics. It is yet one more way in which the emerging 21st century economy
of the Pacific is challenging 20th century divisions and wisdom.

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Latin America divided over how to engage with China Page 3 of 3

R Evan Ellis is the author of China in Latin America: The Whats and Wherefores and
an associate professor at the William J Perry Center for Hemispheric Defense Studies
in the US

Source URL (retrieved on Jul 24th 2013, 7:35pm): http://www.scmp.com/comment/insight-

opinion/article/1289053/latin-america-divided-over-how-engage-china
Links:
[1] https://www.scmp.com/sites/default/files/2013/07/23/chinaimport.jpg

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