Amid a temporary elimination of trade tensions with the US, Beijing appears to continue to maintain its influence in South America.
Communist China is moving to strengthen its ties with Latin America, and has been involving several new diplomatic and economic agreements in recent weeks with the state and its people.
Speaking at Beijing’s Forum for Chinese and Latin American Leaders earlier this month, Xi Jinping, leader of the Chinese Communist Party (CCP), said he is ready to “participate” with Latin America through the exchange of administration, economic and security.
In a thinly veiled swipe of current US trade policy, XI said “there are no winners in tariff wars or trade wars,” and aimed to position trade with China as an important tool for diversifying supply chains from the United States.
To that end, Xi has pledged to “align” with Latin American countries, increasing imports, encouraging Chinese companies to increase investments, and increasing cooperation on clean energy, 5G communications and artificial intelligence.
Beijing moved to systematically build China’s presence in Latin America and launch a series of linked initiatives aimed at promoting political tremors in the South American continent and the Caribbean.
CCP offers billions of dollars of new credit
Key to XI’s efforts was the announcement of a new $9.2 billion credit line to support infrastructure investments in Latin America and the Caribbean.
The funding package has become smaller than similar initiatives in recent years due to slowing China’s own economy, but the move nonetheless represents a major driving force towards widening the impact of CCPs across the region through financial ties.
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In particular, the credit line is sected solely on the Chinese Yuan’s own identity, thereby encouraging Latin American countries to diversify their debts from the US dollar.
A few days after the announcement of the credit line, the Colombian government announced it had applied to join the new China-based development bank as the country seeks a way to balance the losses from cuts to US foreign aid.
Colombian President Gustavo Petro said he was excited by the possibility of the bank funding a new 75-mile canal connecting Colombia’s Atlantic and Pacific coastlines, and that it could place the country in the “mind” of trade between South America and Asia and provide an alternative transport line for the Panama Canal.
The new development bank was established 10 years ago as a project from Brazil, Russia, India, China, South Africa, and so-called BRICS countries, and aims to counter US dollar-led institutions such as the World Bank and the Inter-US Development Bank.
“The CCP clearly wants to connect the Atlantic and Pacific Oceans with the Pacific and Pacific Oceans at this point through land transport in South America, and bypass the Panama Canal,” he said. “I think this is part of CCP’s global strategy.”
Belt and road expansion
Petro also signed a formal agreement with XI, bringing Colombia to China’s Belt and Road Initiative (BRI, also known as the BRI, One Belt, and One Road).
Colombian entries mean that 23 Latin America and the Caribbean countries currently participate in the BRI.
Others include Antigua and Barbuda, Argentina, Barbados, Bolivia, Chile, Costa Rica, Cuba, Dominica, Dominican Republic, Ecuador, Elbador, Grenada, Guyana, Honduras, Jamaica, Nicaragua, Panama, Peru, Trinidad, Trinidad, Trinidad, Trinidad, Venezu
Colombian Foreign Minister Laura Saravia said the decision to join the BRI was the “best step in decades” for a Latin American nation.
China is Colombia’s second largest trading partner after the US, and recently overtakes the US as Colombia’s largest import source.
XI said in a meeting with Peter at the beginning of the month that China is ready to increase imports from Colombia and provide more support for China’s investment and infrastructure construction in the Latin American country.
Visa-free travel and scholarships
The CCP has also announced that it is moving to increase cultural contact with Latin American countries, and that citizens from Brazil, Argentina, Chile, Peru and Uruguay will be allowed to travel to China without a visa.
China’s Ministry of Foreign Affairs announced on May 15th, that the Chinese Ministry of Foreign Affairs said that visa-free travel for travel less than 30 days on June 1st will begin on June 1st and lasts for a year.
The move is the latest in a series of similar initiatives with other Asian and European countries, with the CCP trying to rekindle its slow economies and increase its cultural capital overseas.
Over the next three years, Beijing plans to invite 300 members from Latin American political parties to China.
According to Chinese state-owned media, XI noted that the initiative would notify the “national governance best practices” of these countries and would involve 3,500 government scholarships and various other types of exchanges.
Economy expansion
Against the backdrop of rapidly increasing trade between China and Latin American countries, a drastic new initiative will emerge.
Despite the US exports to China plummeted due to tariffs, the CCP makes up for the difference from trade networks that are growing significantly in other parts of the world, including Latin America.
Similarly, exports to India increased by 16%, exports to Africa increased by 15%, and exports to the Association of Southeast Asian countries increased by 11.5%.
