China is now a preferred lender in Latin America and the Caribbean. It hosts two international development banks — the Beijing-led Asian Infrastructure Development Bank (AIIB) and the New Development Bank (NDB) in Shanghai —who extend their footprint in the region, JEMI Magazine reported.
“Infrastructure development has narrowed the distance between Asia and Latin America,” said AIIB President Jin Liqun. TIME ofits Beijing headquarters in February 2021.
However, while Chinese loans often come with fewer strings attached, their reliance can push economically unstable countries like Venezuela into what critics call “debt traps” that could lead to default, the Council on Foreign Relations(CFR) think tank specializing in U.S. foreign policy and international relations,said in a April report. “Critics also say Chinese companies are lowering environmental and labor standards, and they warn that China’s growing control over critical infrastructure such as energy grids poses national security risks. There are also fears of economic dependence in countries like Chile, which sent almost 39% of its total exports to China in 2020,” the CFR said.
According to TIME, many recent Chinese-backed infrastructure projects have sadly left host countries in Latin America and the Caribbean. In Costa Rica, a $1.5 billion project to modernize and expand an oil refinery in Moín was canceled in 2016 after local officials pointed out that environmental impact and feasibility studies had been carried out by a company. subsidiary of the Chinese partner, a clear conflict of interest which led to several arrests. “In Ecuador, a hydroelectric dam built by China’s Sinohydro Corp., with the help of a $1.7 billion loan from the Export-Import Bank of China, turned into an environmental disaster after its opening in 2016, as erosion upstream of the dam basin has contributed to pipeline displacement oil spills,” reported the magazine.
During the month of July 13-14 Security in the Western Hemisphere 2022 Concordia Americas Summit, held at the University of Miami, U.S. Army Gen. Laura J. Richardson, Commander of U.S. Southern Command (SUDCOM) said that “out of the 31 countries covered by SOUTHCOM, 21 have already signed China’s Belt and Road Initiative, and this is very worrying.”
But focusing primarily on China’s economic and trade relations with the region misses an alarming trend seen elsewhere in the world, which may well be repeated in Latin America and the Caribbean: China exploits often seemingly innocuous business interests for military purposes, Special Assistant and Speechwriter to General Richardson, Leland Lazarus, said in a March article co-authored with Ryan C. Berg, Senior Fellow of the Americas Program at the Center for Strategic and International Studies, for the Foreign Policemagazine.
The authors reported that the People’s Liberation Army (PLA) has strengthened its military-to-military relations in Latin America and the Caribbean over the past decades. “Since the early 2000s, senior PLA leaders have made more than 200 visits to the region to meet with their counterparts. As its influence in the region grows, China could use its military ties as a bargaining chip to pressure the United States and its allies, perhaps threatening to send in troops or increase personnel and equipment in countries close to the US border.
This raised several red flags in Washington, DC, and according to CFR, the US Congress is considering several bills focused on competition with China. “These include the US Innovation and Competition Act and the US COMPETES Act of 2022, both of which aim to challenge China’s dominance in Latin America’s science and technology sectors by increasing American investments in research and development. Other proposals include bipartisan legislation sponsored by Senators Bob Menendez (D-NJ) and Marco Rubio (R-FL) that aims to counter the ‘malignant influence‘ in the region by enhancing multilateral security cooperation and counter-narcotics efforts,” the CFR said.