China’s Strategic Engagement with Latin America

On January 9, the Dialogue hosted a discussion with Evan Ellis of the Center for Hemispheric Defense Studies on his new book, The Strategic Dimension of Chinese Engagement with Latin America. As China establishes itself as a critical economic partner throughout the Americas, Ellis’ volume highlights the strategic implications of deepening ties in the region. Both Ellis and commentator Riordan Roett agreed that although Beijing does not present a direct threat to either Latin America or U.S. interests in the Western hemisphere, China’s presence holds important implications for regional geopolitics and conventional security issues. As Roett argued, China’s pursuit of its economic and political interests on a global scale will continue to drive ongoing transformations in relations between Beijing and Washington — both on a bilateral basis and within Latin America.

Although military institutional relations have matured in recent years, Ellis explained that China’s military presence in Latin America is still relatively limited, and focused primarily on small arms sales and bilateral exchanges. Of greater concern, perhaps, is the growth of criminal activities in the region associated with China’s enhanced economic engagement. These potentially include the extortion of Chinese communities in Latin America by criminal groups with ties to China, trafficking in persons from China through Latin America, money laundering, and the transit and/or sale of narcotics and other illicit goods.

Chinese investment in strategic sectors, such as the telecommunications and space industries, has raised eyebrows in Washington and elsewhere. Chinese firms’ tentative plans to improve Atlantic-Pacific transport routes (such as overland routes in Guatemala or the perpetually delayed “dry canal” in Colombia) might also have strategic implications for the region and U.S. interests. Oversight of these conduits is not only important for global trade, but also for the control illicit activities – such as the attempting smuggling of military equipment from Cuba to North Korea in a sugar shipment earlier this year.

Questions were posed by the audience on China’s increasing presence in Latin America’s telecommunications sector, particularly through firms such as Huawei – the largest provider for IP DSLAM and Next Generation Network applications, and second in market share for optical networks, routers, and LAN switches for the entire region, according to information made publicly available by the corporation. One issue, according to Ellis, is that Chinese firms’ IT security standards are typically “about three levels less extensive” than those of their U.S. counterparts. Latin American nations appear far less concerned than the U.S. about the strategic implications of partnership with Chinese telecommunications firms. Ellis suggested, however, that Snowden revelations clearly demonstrate the ability of intelligence services to strategically use telecommunications infrastructure on a global scale.

While the panelists agreed that the China-Latin America relationship is based, fundamentally, on economic considerations, Ellis noted that China’s attention to the Caribbean, in particular, cannot be as easily explained by economic factors as it is elsewhere – and that both the Taiwan issue and the region’s proximity to the United States may be important factors in this relationship. (For more, see the Dialogue’s recent working paper on Chinese involvement in the Caribbean).

The Dialogue’s Margaret Myers concluded the discussion by noting that although China is a permanent fixture in Latin America, and that China-Latin America trade and investment ties continue to deepen, the region is nonetheless perceived by the Chinese as a somewhat risky investment destination. Political dynamics in particular are poorly understood by Chinese firms. Chinese entities experience considerable difficulty navigating the policy environment in specific countries in particular. There is no guarantee, therefore, that China’s economic engagement will continue apace. And the extent to which the region must grapple with the strategic and security implications of China’s engagement will very much depend on the degree of Chinese involvement moving forward. China, furthermore, remains acutely aware of — if not entirely constrained by — U.S. perceptions of Chinese involvement in Latin America and the Caribbean.