Washington’s united hope for its pro football team’s return to glory under new ownership pales in comparison to the bipartisan concern about the China challenge to U.S. interests. This is not a mere game but a serious global chess match against an authoritarian near-peer economy. Just like in football, you must first dominate your own division to reach the Super Bowl. The same rules apply in global politics. If you don’t pay enough attention to your own backyard, someone else will seize the opportunity.
In the Americas, troubled economies, increased insecurity, and restive voters have created a perfect opening for China. While the United States is preoccupied elsewhere, China has taken advantage and solidified its position through financial support. It is now the top trade partner for most South American countries and the largest holder of sovereign debt in the region. Trade between China and the region has skyrocketed to $445 billion in 2021 from a mere $12 billion in 2000, and foreign investment has followed the same trajectory. Venezuela, Brazil, and Ecuador have received the most investment. It is no wonder that Beijing’s political influence in Latin America and the Caribbean has surged while Washington’s power has dwindled.
China has welcomed Nicolas Maduro, the leader of Venezuela, one of Latin America’s biggest recipients of Chinese aid, to Beijing. This move demonstrates China’s commitment to long-term investment, which is desperately needed in Latin America during the slow recovery from the COVID-19 pandemic. Additionally, the region’s rich natural resources, including critical minerals like copper and lithium, play a crucial role in global energy transition and climate change mitigation. However, the region lacks adequate infrastructure and investment, which puts pressure on governments to provide a better quality of life with limited resources. China has emerged as Latin America’s top trade partner in the past decade, infiltrating the region with its capital and bypassing democratic inconveniences such as transparency, anti-corruption regulations, and respect for the rule of law. This trend may undermine regional development priorities such as labor and environmental protections, as seen with the Coca-Codo Sinclair hydroelectric plant in Ecuador. Nevertheless, political and business leaders can find it challenging to resist the allure of markets and capital amid significant economic and social demands.
While China benefits economically from its engagement with Latin America and the Caribbean, its ambitions in the region extend far beyond economic altruism. The goals are wide-ranging, integrated, and open-ended, including the cultivation of political leverage. China often attaches strings to its money, exploiting a lack of contract transparency to circumvent international financial regulations, facilitate illicit fund transfers, and undermine environmental, social, and labor standards. This fosters corruption, weakens the rule of law, and erodes democracy and sovereignty. It’s a steep price to pay for resources and infrastructure projects. Public education is necessary to address these concerns, alongside adjustments in laws and regulations to ensure a level playing field for all investors. Washington must also prioritize debt relief, trade expansion, and investment promotion. Rather than isolating China, the focus should be on demonstrating the value of strong relationships with open and liberal societies. Strengthening democratic institutions at the local, national, and international level is crucial to counter China’s financial influence.
There are already signs of resistance to China’s financial muscle, such as Argentine presidential candidate Javier Milei’s announcement that his nation will cease business with Beijing if he is elected. Ultimately, Washington must compete for hearts and minds in the region, not just wallets. Although the China challenge is real, it is not insurmountable, especially given reports of internal political and economic strains in China. By sharing a vision of democracy and development, the region can benefit from all investors. Most of Washington agrees on this. As for the Commanders, their fate remains uncertain until January. Eric Farnsworth, the head of the Washington office of the Council of the Americas and the Americas Society, puts forth these thoughts.
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