According to Chinese experts, the recent electoral success of the Far-Right leader Javier Milei in the Argentine presidential election could lead to challenges in the country’s relationship with China. They suggest that bilateral relations may undergo a trial period until both parties identify more shared interests
By Scaria Cherian
The historical ties between China and Latin America, notwithstanding ideological differences rooted in the ‘Pink Tide’ era, have maintained their resilience. Recently, global focus has pivoted towards the Sino-Latin partnership, primarily driven by China’s emergence as a significant economic force. This shift has triggered apprehensions among the US and other capitalist nations, pushing the subject into the focus of discussion.
Against this backdrop, President Lula of Brazil, assuming office in October, undertook a journey to China, symbolizing a departure from the preceding right-wing populist administration led by Bolsonaro and endorsed by the US. Throughout this visit, the two nations reinforced their ties by endorsing 15 agreements across key areas such as trade, infrastructure development, and industrial investment. Significantly, they also committed to a collaborative venture for the creation of CBERS-6, an environmental satellite scheduled for launch in 2028.
Further, Brazil has also shown interest in joining the Belt and Road Initiative (BRI), which would be a massive blow to the neoliberal model based upon the Bretton Woods institutions. The reason for the sudden advancement in Brazil’s policies can be considered a result of the shift from the previous right-wing government to the new left-wing government led by the Worker’s Party of Brazil. This is seen as a favourable scenario for more partnerships.
China has also been working on improving its relations with Argentina. The South American counterpart views China as its primary strategic partner. As of 2020, their bilateral exchange amounted to 14 billion US dollars, a remarkable figure. China has also loaned Argentina an amount of 17 billion US dollars. China’s investment in various sectors such as fishing, agriculture, energy, mining, aerospace, technology, and infrastructure has been an aid to the developing nation. Recently, the Chinese nuclear giant China National Nuclear Corporation’ (CNNC) signed a deal with ‘Nucleoelectrica’ Argentina’ to set up a nuclear station named Atucha III. This would assist Argentina in reducing its reliance on fossil fuel consumption and conventional energy sources. The project is estimated to create 7,000 jobs and generate 1.3 gigawatts of energy. The project could potentially prevent the annual emission of about 8 million tonnes of CO2.” China has also been at the forefront of establishing hydropower projects in Argentina. In the Patagonian region, China is financing the construction of two dams crucial to the country’s development, as more than one-fourth of Argentina’s power generation depends on the hydropower sector. Once completed, the project is expected to create over 20,000 job opportunities and provide energy for approximately 1.5 million households. However, Chinese experts say that the victory of the Far-Right leader, Javier Milei, in the recent Argentine presidential election might “pose some challenges for the country’s ties with China as bilateral relations may enter a trial period until both sides find more common interests.”
Apart from Brazil and Argentina, Chile has also been a strong ally of China in trade and strategic partnerships for many decades. Despite past ideological disparities, Chile stands as China’s oldest South American counterpart. Chile holds the distinction of being the South American country that has signed the highest number of cooperative agreements with China. In 2021, China accounted for 38.3% of Chilean exports, a significantly higher figure than with other trading partners. It’s also noteworthy that the trade between Chile and China reached 50 billion US dollars in 2022.
In 2021, the China Railway Construction Corporation (CRCC) secured a concession to operate and build a 195 km highway, marking the largest infrastructure project in the country. Another ambitious undertaking within this alliance is the Santiago-Valparaiso high-speed railway, a $2.5 billion plan proposed by China’s Railway Engineering Corporation. This project aims to connect the country’s capital city with the main port city in just 45 minutes. The initiative is anticipated to alleviate road traffic congestion and address the issue of air pollution in the country.
In addition to the South American powerhouses, Bolivia has been a significant ally of China. Bolivia is a member of the Belt and Road Initiative (BRI) and has primarily received Chinese assistance in hydroelectric power projects, with six such projects currently underway. The two nations have also entered into a ‘Lithium Agreement’ to collaborate on the industrial processing of lithium. Bolivia has also started using the digital currency Yuvan for trade, aligning itself with the practices of Brazil and China.
As a trading partner, China has gained the trust of Colombia. According to the National Department of Statistics of Colombia, the country imports more than $16 billion worth of goods from China. Data from the Bank of the Republic of Colombia indicates that China’s Foreign Direct Investment (FDI) reached $266 million by the end of 2022. The left-wing government under Gustavo Petro has played a major role in this significant surge in the country’s trade and investments.
Moreover, Colombia has awarded some of its most significant projects to China. These include the first line of the Bogota subway, estimated at $5.3 billion, the RegioTram (valued at about $1 billion), which will connect Bogotá with neighboring towns, and the construction of a fourth-generation Mar 2 highway, amounting to $426 billion.
Moving forward, Venezuela has emerged as another major partner for China. In 2016, China and Venezuela entered into an agreement for the mining of Coltan, often referred to as ‘blue gold,’ which is essential in the manufacturing of mobile phones and medical equipment.
In 2017, an agreement worth $580 million was signed between China and Venezuela for mining activities. According to Venezuelan President Nicolas Maduro, China has committed to supporting Venezuela in over 500 development projects, encompassing investment, oil production, and gold production. China has also contributed to Venezuela’s communication infrastructure by launching the Venesat-1 communication satellite.
Ecuador, too, has maintained a strong alliance with China for some time. Joining China’s Belt and Road Initiative (BRI) in 2018, Ecuador witnessed the construction of the country’s largest hydropower plant through this partnership. The project not only transformed Ecuador from an electricity importer to an exporter but also led to increased foreign exchange earnings. Furthermore, the project contributed to saving oil and gas resources, resulting in a reduction in carbon emissions in the country.
There has been an agreement signed by both parties regarding free trade, opening Ecuador’s market to 1.4 billion consumers. This is expected to result in increased employment opportunities and investment. China has also been a significant supporter of Ecuador during the pandemic, providing more than 50% of the vaccines to the South American nation. Ecuador, in turn, has played a crucial role as the main supplier of Balsa wood to China for the construction of wind turbine blades. China has also been receiving shrimp oil from Ecuador. The country has warmly embraced more Chinese investments, strengthening their relationship as a remarkable one.
These examples are just a few among many illustrating how China is making a positive impact in the Latin American region. In contrast to the West, China has been providing essential assistance and investing according to the proposals of partner nations. China’s foreign policy has greatly contributed to helping these nations, many of which are poverty-stricken, improve their infrastructure, generate jobs, and contribute to climate control. It’s essential to recognize that Latin America has experienced a tectonic shift from right-wing politics, creating a more favourable climate for China through their socialist strategies. With a clear vision, China is actively building a new world order with the collaboration of Africa, South America, and other underdeveloped regions. If executed efficiently, these alliances have the potential to diminish U.S. hegemony altogether in the international market.
Scaria Cherian is a post-graduate student in International Relations at Mahatma Gandhi University
