With corona diplomacy, China is rapidly gaining ground in Latin America

Translated from the original Dutch

Financiele Dageblad, 6 July 2020

https://fd.nl/achtergrond/1348304/met-coronadiplomatie-wint-china-snel-terrein-in-latijns-amerika

The corona epidemic was not yet over in China when President Xi Jinping surprised the world with a charm offensive.  Starting in March, Europe, the United States and later Latin America and Africa were sent masks, ventilators, test kits and protective equipment.

While In Europe "mask diplomacy"  triggered some resentment and suspicion - China would brag too much about its supplies of medical equipment, which sometimes turned out to be defective - in Latin America, where the corona crisis is still raging, aid from China is more than welcome.

The list of recipients in the region is long, from Mexico to Chile. Tech company Huawei also provided cloud and artificial intelligence technology to Panama, Ecuador and Argentina to detect and treat corona disease cases.

Mexico, the second largest economy in Latin America, received masks and tests from Chinese billionaire Jack Ma, the founder of online store Alibaba. The Chinese government came to the aid of the country with ventilators, which were in short supply.

"The countries that control the epidemic at home must help those who are still fighting it," Ambassador Zhu Qingqiao wrote in an opinion piece in a Mexican daily. "That is the core of international solidarity." (The ambassador did not respond to an interview request by the FD).

Whether by coincidence or not, Mexican foreign minister Marcelo Ebrard later noted that Beijing had been transparent about the virus from the beginning. That was exactly one of the accusations that China wanted to counter, namely that the country at first tried to sweep the virus under the rug.

"TOO LITTLE TOO LATE"

Traditionally, the United States views Latin America as its sphere of influence, but the U.S. has itself been hit by a massive corona outbreak and has turned inwards. Chinese diplomats in Latin America thus do not miss an opportunity to emphasize the absence of the US. They are gaining influence and thus making progress in the region on economic and strategic issues such as 5G technology. "If the dust settles, the playing field may have turned in China's favor," fears Eric Farnsworth, Latin America expert at the American think tank Council of the Americas.

By now, the United States is catching up with donations for some countries. "It's too little, too late," says Paul Angelo. Yes, structurally the US remains by far the most important donor of humanitarian aid in Latin America, emphasizes the China expert at the Council on Foreign Relations. But China has turned the corona crisis into a major PR victory, at least in this part of the world.

In the middle of this crisis, the Americans have blocked shipments of medical equipment to Latin America and have sent warships to the Caribbean to stop drug trafficking. Quite inappropriate during a health crisis, Angelo says. "The US has thus lost important political capital."

Although the Chinese do not always keep their promises - medical equipment does not always arrive, or is sometimes of dubious quality - they have scored points. "And that is putting American influence and supremacy at stake," says Eric Farnsworth.

NEW SILK ROUTE

 China's corona diplomacy is tapping into the country's broader geopolitical strategy in Latin America, observers say. Chinese investments in the region are growing year after year. The People's Republic has become the main trading partner of  economies such as Brazil, Chile, Peru and Uruguay. Six countries in Latin America signed for the construction or improvement of ports, roads and railways under the Chinese Belt and Road Initiative, also known as the New Silk Road. And countries that establish ties with Beijing are breaking those with Taiwan, which China considers a renegade province.

Strategic issues such as 5G technology are at stake for the US, but also for Europe. If China provides that infrastructure, there will be no more room for technology from American or European companies such as Cisco or Nokia. China's ambition clashes with the so-called Monroe doctrine that wants the Western Hemisphere to be America's sphere of influence. Former US President Barack Obama distanced himself from that doctrine, but Donald Trump revived it. According to Trump's government, the Chinese in South America are now coming with a lot of capital, but if countries cannot repay loans, Beijing will leverage those debts to achieve its own policy goals. In short, debt diplomacy.

"Those allegations stem from Washington - Trump's inability to be a source of finance or credit for Latin America himself," said Brazilian economist Otaviano Canuto, former World Bank director. "The Americans say: don't take money from China. But they do not offer an alternative. Latin America wants to develop, and China has an agenda focused on that ¨.

MERCOSUR

Europe does not send good signals either, in the eyes of Latin America. Politicians in the Netherlands and Belgium raise objections to the European trade deal with the South American trading block Mercosur, partly due to environmental concerns. China does not care about fires in the Amazon forest.

Germany believes that Europe should pay more attention to Latin America. "We tend to focus mainly on China, Russia, Africa and of course the US, but Latin America is often in trouble" remarked German Foreign Minister Heiko Maass recently.

"The European Union did not even want to help corona-stricken Italy, let alone South America," said Jorge Heine, former Chilean ambassador to China. "China is filling that gap." Chile, a prosperous country in South America, is known for maintaining ties with Beijing in a way that does not undermine its economy, unlike Ecuador, for example, which has large debts with China.

EXTRA ALTERNATIVE IN TRADE

Chile and China trade $ 41 billion annually, including $ 25 billion in exports for Chile, a trade surplus. "Trading with China has been very beneficial for Chile," said Heine, who now teaches international relations at Boston University's Pardee School of Global Studies. The notion that China seeks to promote authoritarianism in Latin America bears no relation to reality, he says.

The Great Depression that arose after the American stock market crash of 1929 hit Latin America particularly hard. Countries were too dependent on the United States and the United Kingdom for investment and exports. Almost a century later, now that a new paralyzing crisis is looming, the region can also rely on the largest growth market in the world: China, says Jorge Heine. "For us, China means an additional option to the US and Europe, a third alternative for our trade and investment. How can that be a bad thing ?".