South of the border, China holds sway

Ever since John Kerry declared the Monroe Doctrine era over in Latin America, Beijing has been building influence in the region

Alexander Woolfson

The new imperialism: Chinese leader Xi Jinping with Venezuela’s President Nicolás Maduro in the Miraflores Palace, Caracas (© LEO RAMIREZ/AFP/Getty Images)

For more than half of the 19th century and much of the 20th, US foreign policy was dominated by the Monroe Doctrine, which dictated that efforts by the European powers to take further control in North or South America would be viewed as “the manifestation of an unfriendly disposition toward the United States”.

America appears to have lost sight of this traditional strategic focus. In the absence of meaningful US involvement in Latin America since the Cold War, several countries have begun to engage seriously with the region. Of these, China’s advances into the hemisphere have made James Monroe’s concerns relevant once again. Nothing symbolised this tension more than the overshadowing of the recent G20 meeting in Argentina, by the US-China trade war.

The irony is that America’s increasingly tense trade dispute with China and her military focus on south-east Asia is pushing China into the Latin backyard of the US. Latin America is becoming an important part of China’s sophisticated hedging operation to counter the US. China has done a far better job than the US of identifying areas of critical vulnerability and has taken huge strides towards addressing them.

The most visible element of this strategy has been the One Belt One Road initiative, designed to link China, central Asia and Eastern Europe — the aim being to secure overland access to markets despite US economic pressure, and to maintain lines of communication that circumvent the South China Sea’s major vulnerabilities.

Trade tensions are likely to lead to China decreasing its export relationship with the US. Given its geo-strategic position in regard to the US, its abundance of natural resources and willingness to engage with China, Latin America presents China with significant opportunities to counter US strategic, economic and political power. The ability to develop a new trade relationship that fulfils critical agricultural and resource demands, and a new market for Chinese goods, will help offset deteriorating economic relations with the US and potentially insulate it from trade shocks with the Americans.

The appeal of Latin America for China is immense, not just because of the material economic and strategic implications, but because Chinese economic and military cooperation facilitates an important political goal: it undermines the norms and rules that have facilitated liberal internationalism. China’s economic expansion globally has been accompanied by none of the rules-based systems that marked US hegemony. It has been visible in China’s tolerance and support for North Korea and Iran, not to mention smaller corrupt states. Authoritarian regimes are far easier for China to do business with. In Latin America, as elsewhere, China’s involvement is steadily rolling back democratisation on the US southern flank.

Monroe’s edict was in effect a ban on great power participation in Latin America and a prohibition on political systems other than liberal democracy. Directed at European imperial powers in the 19th century, it shifted focus to the Soviet Union during the Cold War. After 1989, while America enjoyed unipolarity, Washington’s “backyard” was downgraded on the list of strategic priorities. The doctrine stood until November 2013 when then Secretary of State John Kerry declared its end at the Organisation of American States. Kerry’s speech was striking:

The era of the Monroe Doctrine is over. 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. It’s about all of our countries viewing one another as equals, sharing responsibilities, cooperating on security issues, and adhering not to doctrine, but to the decisions that we make as partners to advance the values and interests that we share.

He may well have intended to counter China’s appeal to growing Latin American dissatisfaction with the US-led international order.

Abruptly, at the start of 2018, then Secretary of State Rex Tillerson dragged Monroe into the 21st century:

Latin America does not need new imperial powers that seek only to benefit their own people. China’s state-led model of development is reminiscent of the past. It doesn’t have to be this hemisphere’s future . . . Russia’s growing presence in the region is alarming as well, as it continues to sell arms and military equipment to unfriendly regimes who do not share or respect democratic values . . . our region must be diligent to guard against faraway powers who do not reflect the fundamental values we share in this region . . . Today China is getting a foothold in Latin America. It is using economic statecraft to pull the region into its orbit. The question is: at what price?

Tillerson’s question about the precise nature of the strategic and economic cost remains unanswered; there are both regional security issues at stake but also a wider question about America’s waning global power and the emergence of a multi-polar international system. Since its creation in the late 1940s, the Peoples’ Republic of China identified as a member of what was then known as the Third World, encompassing Asia, Africa and Latin America. Although China was actively  engaged with the first two regions, her involvement in  Latin America remained constrained. During the 1950s and ’60s,  China  pursued economic development and political outreach through the prism of anti-imperialism and was thus quick to support Fidel Castro in Cuba. It was in the 1960s that China extended its engagement with the apparent aim of actively reducing US influence.

It was China’s membership of the World Trade Organisation in 2001 that accelerated its regional engagement. Latin America has become an increased priority for China’s leadership. The strategic motivation in Beijing is part of the larger project of “democratising international relations” which can be understood as a conscious drive away from unipolar American power in both the economic and international political system. As China has moved towards multilateralism it has strengthened its network of global alliances.

The strategy is already paying dividends for China. At the UN, Latin American allies have helped ward off resolutions condemning Beijing for its human rights record. A pattern of Beijing seeking Latin American votes at the UN to counterbalance US influence has emerged on a range of issues. The perennial Chinese concern with Taiwan has also been at play. China’s White Paper on Latin America and the Caribbean and Policy Paper on Latin America and the Caribbean, the 2008 and 2016 blueprints for its Latin American strategy, both give primacy to “the one China principle” in relations with Latin America. Astonishingly, only seven out of 33 Latin American countries maintain diplomatic ties with Taiwan. The cutting of ties with Taiwan in return for Chinese largesse is already working in several countries. Seen from a US perspective it is a marker of the changing nature of its influence in the region. For El Salvador, Nicaragua and Panama forgoing the relationship with Taiwan is simply seen as a pragmatic economic decision.

China is not simply engaged in shrewd strategic calculation. China’s breakneck economic growth requires primary resources for its domestic market as well as the location of new markets for export. There is both an economic and strategic reciprocity at work. Argentina, Brazil, Mexico and Venezuela are all key targets for Chinese strategic partnerships partly because of the value of trade but also because of their regional influence.

There is a longer strategic imperative at play in China’s Latin American outlook beyond simple economic relations — the creation of a sphere of influence. The US “Pivot to Asia” under Obama, and intensification of China as principal strategic competitor under Trump, has seen China cleverly mirror US strategy. As the US has increased activity in Asia, so China has reciprocated by increasing its engagement in America’s “backyard”. Tillerson’s recognition of this in 2018 was a belated acceptance that China had been increasing its presence in Latin America, at that point without antagonising the US.

Tillerson was merely acknowledging a new reality in Latin America, a reality that challenges US interests. At the turn of this century China’s involvement in the region coincided with a turn to the left in Brazil, Argentina, Bolivia, Nicaragua, Uruguay, Venezuela and Paraguay, among others. The “Pink Tide nations”, as they became known, lacked a uniting ideology but found common ground in strong anti-US sentiment, in particular antipathy to the market-based economic reforms known as the Washington Consensus. American strategy in that sense was counterproductive, pushing much of Latin America towards alternative power bases than US economic institutions. China, Russia and Iran were all economic and military beneficiaries. The US cannot simply push another version of the Washington Consensus in Latin America and expect a different result.

The long shadow of the Monroe Doctrine still looms large. The attractiveness of China as opposed to the stringent conditions of the US is that the apparently less onerous conditions of economic and military cooperation with China play to Latin American grievances over perceived US interference with local sovereignty. China has skilfully exploited these historic grievances by giving primacy to the stated principle of equality and mutual support, which is given pride of place in the state publications. China’s “Five Principles of Peaceful Coexistence” — mutual respect for sovereignty and territorial integrity, mutual non-aggression, non-interference in each other’s internal affairs, equality and mutual benefit, and peaceful coexistence — are well-received in much of Latin America.

In this sense Latin America has become something of an economic and political laboratory for the future international order. As America’s ability to impose a rules based international system wanes, China offers an enticing alternative with trade relations and investments offered seemingly without any political or economic conditionality.

The challenge for US policy analysts is divining China’s long-term strategic ambitions in the region, or, more accurately, what its presence means for the US. As one analyst wrote of the military situation in Latin America, “The growing Chinese presence in Latin America implies that the Western hemisphere cannot be considered a US sanctuary in a future conflict with the PRC, and that the United States will be forced to devote significant resources to protecting its operations there, as well as in the Asian theatre of operations.”

The situation is not yet quite as dire as that quote suggests. Although Chinese arms sales have increased to the region, the quantity and type of equipment involved is not yet a strategic threat. Much of the equipment is logistical and little of it for combat or direct power projection. China is establishing influence rather than a strategic beachhead.

At the moment Chinese military activity is fairly limited and mainly consists of visits and consultations but the sale of military equipment is gathering pace. The foundation for further military cooperation has been established. Security ties with the US are too important to be forsaken and the Latin American counties are too unclear about China’s own long-term ambitions to leap into definitive military alliances. Latin American perspectives on China are nuanced. They seek to engage China in order to understand the nature and extent of its power and influence. Equally, they want to acquire military equipment at affordable prices, something China is happy to offer.

The reality is that Latin America is a comparatively small market for arms sales. The continental militaries are small and their defence budgets modest. The defence concerns of most of the countries are internal conflict and security, not over-the-horizon threats. China is able to plug the resulting equipment requirements cheaply.  In the other key area, military exchanges, China and Latin America have reciprocal high-level visits but the numbers do not come close to matching those with the US and Europe. Defence ties with the US and Europe still carry considerable prestige.

The US and Europe cannot afford to be complacent in considering Latin America from a military and strategic perspective. They do need a more proactive policy of military engagement with the region to stem or at least moderate the nature of China’s regional power. Regionally the increase in arms sales has complemented China’s goal of “securing access to natural resources and export markets”. The aim is to prevent the emergence of defence facilitation with China becoming sole or main defence supplier. There are early signs of concern that need to be addressed. For instance, despite improving relations with the UK and US, Argentina recently allowed the creation of a Chinese satellite monitoring base in Patagonia.

Beyond the hard facts of China’s growing presence in the region, its involvement appears to have had a detrimental effect on the nature of Latin America’s political development. For many years Latin America looked like the success story of democratisation as successive dictators were overthrown and democracy became a hallmark of regional government.

China’s rule-free economic engagement and its concentration on commodity trade have contributed to growing threats to Latin American democracy, and with it stability. The military dictatorships and threat of Marxist coups may well have been relegated to the past. The new threats come from elected leaders who steadily erode democratic freedom and threaten the independence of the judiciary and legislature. Autocrats in Venezuela and elsewhere are extending their terms of office, circumscribing political discourse and enabling the entrenchment of corruption. The Latin American commodity boom that China has fuelled is a prime component of this democratic slippage as it has profoundly destabilised economic development. The demand for commodities and their relative high prices has generated export concentration. Most Chinese foreign direct investments and loans have been invested in a few countries and in natural resources. So China has become both a major trading partner for the region and a source of investment for all kinds of infrastructure and development projects, while simultaneously causing a form of deindustrialisation as Latin America refocuses on commodities.

Unsurprisingly this has gone hand in hand with the corruption that has been both a hallmark of and cause of democratic decline. The ongoing crisis over the investigation into Argentina’s former president Cristina Kirchner is symptomatic of this process — a populist leader who for reasons of political expediency and corruption is probably beyond judicial sanction. A recent authoritative survey into Latin American political opinion saw people’s satisfaction with democracy in their own country plummet compared to previous years. In Brazil it fell from 49 per cent in 2010 to 9 per cent in 2018. The effects are worrying. In 2010 61 per cent of respondents agreed that democracy was the best form of government; now only 48 per cent agree with the statement.

Of course, China cannot solely be blamed for Latin America’s political and economic woes but the nature of their economic involvement has exacerbated the situation. With declining belief in democracy comes a concomitant decline in the reach of the international rules based system. China’s economic policy is helping it to achieve its politico-strategic goal of weakening the values that underpin US international leadership. While Latin American voters don’t feel that democracy is working for them they are increasingly indifferent to the political system that comes in its stead. The victory by Jair Bolsonaro in Brazil, the constitutional changes in Venezuela and elsewhere that remove term limits all offer an insight into Latin America freed from the confines of Washington consensus rules.

Both Trump and Obama were correct in identifying the rise of China as a strategic challenge to the US. It is far from clear that either man responded successfully. China has started a process that challenges a fundamental precept of US foreign policy for over a century — hemispheric security and freedom from foreign challenge. China is slowly transforming Latin America into a liability for the US. The danger is that US strategic and trade policy is now exacerbating that trend because of insufficient engagement in Latin America and because vestiges of the pivot to Asia are serving to exacerbate China’s interest in America’s vulnerable flank. 

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