Competing for Influence: China in Latin America – Narrated by David Strathairn – Full Episode

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Competing for Influence: China in Latin America – Narrated by David Strathairn – Full Episode

all over the Western Hemisphere in Chile and Panama in Ecuador and Argentina a new power is making its presence felt until recently China had little interest in Latin America now its investment is transforming the region great decisions investigates this new phenomenon as well as the challenges it is brought rising levels of debt worries about creeping authoritarianism and the prospect of direct competition with the United States competing for influence China in Latin America next on great decisions great decisions is produced by the foreign policy association in association with Thomson Reuters funding for great decisions is provided by Price Waterhouse Coopers LLP and the Nelson B Delavan foundation in June 2017 the Panamanian government made a bombshell announcement Panama would become just the second nation in Central America to establish diplomatic relations with the People’s Republic of China today Panama breaks its diplomatic relations with Taiwan a world that is connected that is globalised where cooperation amongst countries is necessary to achieve development and to really advance it’s necessary to be connected to such a large country it was a decision that caught the US State Department unawares it came as quite a surprise to the United States I was the serving ambassador at the time but then the president what kind of fidella he had been publicly supportive of switching recognition we were surprised more at the timing and frankly at the fact that there wasn’t any pre consultation I was not made aware of it until literally about an hour before the president went on television and announced it of course I did not inform John right when we were about to sign he’s right about that and it’s our sovereign right to do so and we decided to do it that way on purpose because we knew that it would be very hard to have it done otherwise I think a country like mine can be mature and understand the challenges and the advantages to my country on dealing with different countries said that that this is about a step forward in a more assertive foreign policy for the Dominican Republic over the next 14 months to other countries the Dominican Republic and El Salvador followed Panama’s lead is thermicon been siedel they are convinced that this is the correct path that will lead to the development of a mutually beneficial links for our two peoples in the recent period China has been putting a lot more pressure on countries that are diplomatically aligned with Taiwan to switch and they have a lot of leverage to bring to bear on different governments interesting enough some of these countries would have done this earlier but it was China that told them to hold off but once there was an election in Taiwan and the pro-independence party won well all bets were off China’s bid for recognition in Latin America reflects a new priority for a country whose main focus under the auspices of the belt and road initiative has long been in Asia and Africa we’ve seen China expand the belt and road initiative to the Latin American region it’s been something that’s focused more extensively on Asia and Europe and northern Africa to a degree but has become increasingly global over the years in several of the Chinese government’s statements that in America is included as a part of the belt in the road we have seen a lot of activities

Beijing is doing in Latin America now with President Trump determined to check China’s growth Latin America has turned into an unexpected battlefield make no mistake about it China’s doing it for its own interests they want the markets that they create to play according to the Chinese rule which is a government-run system not an open market economy they also are using these avenues for their national security purposes including stealing and intellectual property in jeopardizing our national security I think China’s involvement in in Latin America is an economic threat them from Florida our biggest trading partners are Gentiles hot than Central America this is a clear competitor to the United States in our backyard there’s no question and they’re not our friend [Applause] China’s interest in latinamerica ramped up in the early 2000s when the so called pink tide brought leftist governments to power throughout the region traditionally the Chinese have focused more on countries like Venezuela and Ecuador and these are countries are the in China are regarded as leftist so there was a natural political linkage there it was a member of the Standing Committee of the Politburo in China a man by the name of Lee Chang Kuhn who first travelled to Venezuela struck a friendship with what Chavez thought it was a good idea for China to make inroads in Venezuela he found an ideological sympathy with over Chavez so they started going in with all these loans for Venezuelan infrastructure the Chinese have been extremely sophisticated in cultivating Ecuador ins years ago when I was the US ambassador there they sent a Chinese ambassador who was a charming talented woman spoke impeccable Spanish sobre todo not very great in it he immediately said about getting to know Ecuador ins organized and funded trips for the president of Ecuador and cabinet to go to China gradually China’s attention has expanded to the entire region Beijing now bankrolls massive infrastructure projects in dozens of Latin American countries especially in the transportation and energy sectors the big story with the belt and road initiative has been infrastructure building which obviously takes a lot of capital which a lot of the governments in Latin America are short on and traditional commercially oriented financing structures aren’t so interested in because they see it as risky countries like Panama that offered diplomatic recognition to Beijing can expect a windfall of Chinese investment shortly after panama reestablished diplomatic ties with Beijing of President Xi visited that was a very productive meeting there were nearly 18 agreements that were signed on a whole range of issues including infrastructure and connectivity a Chinese company won the tender for building the fourth bridge of the Panama Canal that’s 1.4 billion dollar project Panama is being built up by China into its main logistics and transport hub in the Americas there were no deals on the table for Panama establishment of relations with China and I think this is very important to be highlighted because other countries have done it differently other countries have established relations with China in exchange for large infrastructure projects or investments often Beijing has been willing to provide funding for large-scale projects that Western creditors have declined to support one of the most emblematic projects of the Belton Road initiative the Latin American region is the Belgrano cartas rail expansion in Argentina this is a project that the Argentine’s have wanted to do for a very very long time it requires billions in finance and very few have been interested in supporting this project financially China has this is a very important railway that crosses the agricultural heartland of Argentina and it is as much in China’s interest as it is in Argentina’s interest to modernize this railway this railway transports materials that are essential

for China soy wheat corn flour Chinese loans required the use of Chinese companies and of Chinese equipment Argentina happens to produce a lot of the things that would be required to build a railway but the loan conditions were such that they required the importation of Chinese equipment fully across the board which was detrimental I think to local industry not all of China’s investments in Latin America have paid off American politicians are quick to highlight examples of shoddy or unnecessary construction you saw this quite clearly here in the region at the coca coda Sinclair dam in the jungles of Ecuador the dam now runs to half capacity the steel used to make it is full of cracks there accidents nearly every top official that was involved in the dam constructions either in prison or sentenced on bribery charges when the projects are not good projects they’re stranded capital then they want the country to pay it back in the country and say wait this thing doesn’t work I don’t need it but Latin American observers particularly those from the regions of strongest economies say that doing business with China is simply a necessity China has become the major partner trade partner with Brazil China has also become important as a source of capital flows they are new investors in areas such as high-tech intact and banks our countries are going through a very difficult moment growth this year will be absolutely minimal now the way to deal with that is to associate yourself with the parts of the world that are growing in hi ray one problem for Latin American countries that rely on Chinese capital is the risk of racking up debts they cannot possibly repay that’s appealing if you are the leader of a nation that is poor that needs money and the Chinese come in and say we’ll give you a soft loan you’re focused on today you’re not focused on what’s gonna happen ten years out when those loans come due members of the Trump administration have repeatedly accused China of pursuing debt trap diplomacy with the goal of gaining political influence let me say with great respect to all the nations across this wider region in the world do not accept foreign debt that could compromise your sovereignty protect your interests preserve your independence that trap is a tricky term because by using the word trap it suggests intention it suggests that this is a premeditated scheme that China had sought out before it reached out to recipient countries and that is a narrative that I personally do not agree with that leads me to the question that is often posed the whether China practices so-called debt diplomacy some people say that China purposefully lends money to countries to get them to debt and then take over their assets it wouldn’t be a very wise diplomatic strategy when countries struggled to pay back their debts in cash China collects it in other forms part of the lending to an Australia for instance it comes with a collateral if an Australia is not capable of paying back China has arrived to repay in oil ecuador has huge huge debts to China in terms of the oil it must pay them 80 to 90 percent of all of their production is due to China over the next five to ten year even in oil-rich countries however China’s investments can be risky Chinese oil investment in Venezuela now is regarded as not only at that trap for winners whele but also a trap for China as a lender because winds will domestic politics turned ourselves and the government is unable to repay the mole said it Chu from China China continues to offer financing to Venezuela but in lesser amounts than we’ve seen in previous years so everything is about sort of maintaining the status quo a degree of stability and trying to ensure that enough oil is being produced to be able to pay things back so at some point these countries will come to a conclusion that as they say if you owe

the bank $100 you have a problem if you owe the bank a billion dollars the bank has a problem so in this case maybe China has a problem as Beijing invests more and more heavily in Latin America it is inevitably drawn into political controversies in the Western Hemisphere including ones that China’s leaders would prefer to avoid China has always maintained this policy of non-interference and the domestic affairs of sovereign nations but as China China’s footprint grows globally whether in Latin America or other other regions inevitably China will be dragged into some political issues China wanted to host a meeting of the inter-american Development Bank in China but there’s a delicate issue which is that most IDB members recognize one widel as a legitimate president of Venezuela so the IDB countries say well if you wanna host us find will come just make sure you invite the person because it create a legitimate president at the end of the day China and thereafter canceling the meeting so that’s what happens with China in Latin America they usually stumble unnecessarily into these situations one major project that has done little to enhance China’s reputation is a secretive satellite tracking station in Argentina which has left many locals confused and frustrated in 2014 at China and Argentina signed an agreement permitting China to build a space station in the Nelkin region in Patagonia in Argentina the space station is staffed nearly exclusively by Chinese nationals I’m not entirely sure what the purpose of the Chinese is here the Chinese haven’t done anything here they haven’t left behind anything of value China has consistently maintained that the space station is purely for peaceful purposes however the space station is managed by an agency that has very close ties to the People’s Liberation Army China’s military which has raised concerns in the US and elsewhere about whether the space station has a dual use a thankless area if there is so much security they are protecting or want to investigate something no no an observatory does not need that many guards just to see the moon officials within the Trump administration have responded to China’s growing presence in Latin America by citing the Monroe Doctrine a declaration from 1823 that warned European countries not to interfere in the Western Hemisphere a few years back during the Obama administration John Kerry then Secretary of State gave a speech in which he sought partnership based relations with Latin America genuine partnerships the relationship that we seek and that we have worked hard to foster is not about a United States declaration about how and when it will intervene in the affairs of other American States the era of the Monroe Doctrine is over it was a good line in a speech it got some applause and then I think for mostly for rhetorical purposes obviously and the Trump administration National Security Advisor Bolton brought it back today we proudly proclaim for all to hear the Monroe Doctrine is alive and well the Monroe Doctrine started as a way of saying we are rejecting foreign interference Minister it came to be interpreted in the hemisphere as the US will tell the governments of this region what to do the monroe doctrine has always been very offensive to latin-american countries we have never quite agreed and being happy with the monroe doctrine it’s not something that latin american countries look up to I don’t know that we could enforce it maybe the way President Monroe could back then but as a matter of principle of hemispheric solidarity I think that the fact that now that we have more Latin American countries agreeing with the United States about China is kind of a non militaristic reflection of the Monroe Doctrine principles in April twenty nineteen Secretary of State Mike Pompeo traveled to Santiago Chile where he laid out the Trump

administration’s case for why Latin American countries should reject Chinese influence and investment the basic message the Secretary of State Compaore conveyed during his visit was that trading with and in doing business with China it was a dangerous proposition China does business in places like Latin America often except injects corrosive capital into the economic bloodstream giving life to corruption and eroding good governance who say that Chile should not trade with China is a bit of a complicated proposition if Chile were to stop trading with China the economy would fall apart ultimately our strategy as a nation can’t be to try to keep China out of economic markets around the world it has to be to compete with Chinese products and Chinese investment the United States has no complementary vehicle by which to offer economic investments in South America side by side with the offers that they’re getting from the Chinese this administration has been pulling back on US participation as a result there’s a void and China has been very willing to come in and try to fill that void so we’ve seen China a presence in our hemisphere rise as the US presence has declined Latin American observers have also noted the disparity between the American and Chinese approaches to their region when duis cabinet members visit Latin America these days all they do is talk about China when Chinese cabinet members visit Latin America all they do is talk about trade and investment and well there’s an interesting contrast there and I suppose you can guess which one is more effective when they go around saying beware the Chinese it’s from a very paternalistic point of view as if we needed to be as if we didn’t understand what the risks were as if it was the United States who had to come and inform us of the risk of engaging the Chinese and I will tell you know most of these countries understand the risks they’re only appealing to China because the United States has shunned them the Chinese have occupied avoid they filled the blanks the whole Latin America and there is no exception isn’t there need of infrastructure investments so why would they simply listen to a plea to a call from Washington to stop the entry of Chinese capital without having any alternative to fill the blank in an effort to help the u.s. compete with China around the world Congress passed legislation called the build act in October 2018 that law paved the way for the Trump administration to establish a government agency that directs private sector funds for international development in 2019 the Development Finance Corporation was created to extend u.s. foreign policy and development goals by operating in more than 90 countries around the world to bring affordable housing and water and infrastructure to the partners that need it most well I think the bill tax is is a good opportunity to pull private sector investment in public sector investment together more along the lines of the way Mitte in Japan and some of the other national investment support programs do you can draw contrast between our investments throughout the region and China’s investment throughout the region we believe that the private sector is able to catalyze stable societies better than state-directed authoritarian government investment in the end there is little consensus about China’s engagement in Latin America even from those in the region who have watched China’s relationships develop up close the Chinese are like corporate raiders they come in they make a sweetheart deal with management start cost-cutting firing workers the people of the countries the China goes into usually in the theory the Chinese the Chinese antagonize the people of the countries where they go in to not only have we not add any significant tagging isms or difference with Chinese companies our problem is that we don’t have enough of them we would like to have more Chinese companies in Chile we like to have more Chinese investment whether the future brings conflict or cooperation between China and the United States one thing is clear American policymakers must now grapple

with the consequences of China’s rise in every corner of the world including in their own backyard great decisions is America’s largest discussion program on global affairs discussion groups meet in community centers libraries places of worship and homes across the country to discuss global issues with their community participants read the a topic briefing book meet to discuss each topic and complete a ballot which shares their views with Congress to start or join a discussion group in your community visit FPA org or call one eight hundred four seven seven five eight three six great decisions is produced by the foreign policy association in association with Thomson Reuters funding for great decisions is provided by Price Waterhouse Coopers LLP and the Nelson B Delavan foundation