Will Default Dampen China-Argentina Ties?
The Fernández administration’s refusal to comply with a US court order to pay holdout hedge funds has once again landed Argentina in default.
This post is an excerpt from “China’s Covid-19 Diplomacy in Latin America and the Caribbean: Motivations and Methods,” an August 2021 report authored by Asia and Latin America Program Director Margaret Myers, and jointly published by the Florida International University Jack D. Gordon Institute for Public Policy and the Inter-America Dialogue.
China’s engagement with Latin America and the Caribbean (LAC) during the global pandemic can be divided into two distinct phases. The first was evident from February 2020 to around September 2020 and consisted of sales and donations of medical equipment and other forms of cooperation and assistance, such as advisory services and consultations between medical professionals from China and LAC nations and cooperation on vaccine testing and development. As a manufacturer of much of the world’s personal protective equipment (PPE), China was well-positioned to deliver its supply to LAC and other regions, especially as Covid-19 cases dwindled at home.
Based on a review of 470 announcements of Chinese PPE deliveries, as reported in Chinese, Latin American, and other media sources and Chinese embassy Twitter accounts, the pace of PPE deliveries slowed considerably after summer 2020 (Figure 1), as China focused more extensively on vaccine development and distribution—the second phase in its Covid-19 outreach.
Despite an initially slow start in vaccine production and distribution, China reportedly distributed 300 million doses of its three vaccines—Sinovac, Sinopharm, and CanSino—by May 2020, as part of what Chinese President Xi Jinping described at the 2021 Global Health Summit as a “large-scale global humanitarian action.” As of summer 2021, these doses had been sold or donated to 13 LAC countries. As in the distribution of PPE, China was also well positioned to engage in large-scale vaccine dissemination, given sizable Chinese government support for vaccine development and production and an ability to delay mass vaccination at home.
Of course, China’s prominence in the delivery of Covid-19 assistance to the region—whether through PPE or vaccine delivery—was the product of more than just supply-related considerations. The severity of the coronavirus outbreaks in the region shaped some of China’s early engagement, for instance. China’s international vaccine shipment has mostly been based on negotiated contracts with recipient nations, but Chinese actors often funneled medical supplies to those countries most affected by Covid-19. According to the Pontifical University of Chile’s Francisco Urdinez, the number of donations that each country received was, in general, positively associated with mortality rates during the first wave of the pandemic.
In addition to humanitarian motives, which are frequently underscored by Chinese officials and supported at home by the Chinese public,[i] China’s pandemic aid and broader economic outreach have also sought to reinforce and strengthen bilateral ties throughout the region—to ensure, above all, that China emerges from the pandemic with its image generally intact, and to simultaneously advance some of China’s commercial objectives and policy interests, including the political isolation of Taiwan.
Shaping China’s Image
China’s initial “aid blitz,” carried out by Chinese companies, embassies, overseas communities, the Chinese Red Cross, and other actors, occurred at a pivotal moment for global opinion on China and Covid-19. Critical commentary was evident in LAC and international media in the early months of the pandemic, focused on China’s handling of its outbreak in Wuhan. Peruvian author Mario Vargas Llosa noted in a March 2020 column for Spain’s El País that the virus had originated in China and that China censored at least one of the doctors who had originally detected the virus. French economist and political scientist Guy Sorman suggested in an August 2020 interview with Argentina’s La Nación that “[i]t is ethical and legal to consider the Chinese regime as directly responsible for this pandemic.” Sorman made similar remarks to Chile’s El Mercurio. By April, anti-China banners appeared in Brasilia reading “China Lied, People Died,” and “China Virus,” as reported by the Financial Times.
Amid mounting criticism and accusations, China sought to position itself in LAC and other regions as a responsible actor and proponent of cooperation at a moment of global crisis.
Much of this work fell to China’s embassies, which, in addition to coordinating donations and sales of PPE and vaccines, labored throughout the pandemic to convey approved messages about China’s experience with Covid-19 and its pandemic outreach. This was accomplished through various outlets, including embassy communiqués, television interviews, press conferences, op-eds authored by Chinese ambassadors and published in local media outlets, and Twitter posts. In fact, at the request of Beijing, Chinese embassies in Argentina, the Bahamas, Cuba, and Peru set up new Twitter accounts in the early months of the outbreak to communicate key messages directly to local publics.[ii]
Beginning in early January 2020, several Chinese embassies and ambassadors took to traditional and social media to mostly defend China against damaging allegations. They communicated confidence in China’s handling of the outbreak and underscored China’s commitment to transparency and information sharing. In a February 14, 2020 interview with Estadão, a daily newspaper published in São Paulo, Chinese Ambassador Yang Wanming sought to reassure Brazilian audiences about China’s control of the outbreak, the country’s commitment to cooperation with LAC nations, and China’s “interest in conducting international cooperation in an open, transparent, and responsible manner.” Embassies also tweeted that China was not to blame for the pandemic, and some published articles lamenting the extent of “prejudice” and “ignorance” evident in China-related commentary.
By spring 2020, Chinese embassies were still largely committed to damage control, addressing continued critiques of China’s Covid-19 response (e.g., that China tried to cover up infections or that China’s lockdown in Wuhan violated its citizens’ human rights) and conveying Ministry of Foreign Affairs (MOFA)-produced talking points. China’s Embassy in Ecuador was especially dedicated to this approach, using hashtags like “#LaVerdad” (#TheTruth) when countering specific claims about China and Covid-19. Embassies also emphasized China’s interest in cooperation and friendship, highlighting donations and sales of PPE by Chinese actors. In May, Chinese ambassadors penned op-eds with such titles as “Defeating Covid-19 through Solidarity and Cooperation,” “Solidariedade e cooperação: armas mais poderosas para derrotar a pandemia” (“Solidarity and cooperation: more powerful weapons to defeat the pandemic”) and “Pompeo: El Mentiroso (“Pompeo: The Liar”).
A spike in Caribbean-directed messaging was evident in April 2020, when Chinese embassies addressed allegations by Human Rights Watch and former Barbados diplomat Mohammed Iqbal Degia that the Chinese city of Guangzhou had targeted its African communities, forcibly testing them for Covid-19 and ordering them to self-isolate. Reports also surfaced at the time of evictions of African residents. Chinese embassies in Barbados and Dominica published statements refuting these claims, citing China’s history of cooperation with African nations. Degia’s op-ed on the topic appears to have been removed from the NationNews web site where it was first published, likely at the request of the Barbados government, as one interviewee for the full “China’s Covid-19 Diplomacy in Latin America and the Caribbean: Motivations and Methods” report noted.[iii]
By summer 2020, embassy messaging expanded to address international criticism of China’s human rights record, whether regarding Hong Kong, Xinjiang, or China’s domestic response to Covid-19. On Xinjiang, op-eds and statements by embassy officials deflected international condemnations of China’s treatment of the Uighur population, instead pointing to social issues in the United States. Some noted a lack of protection in the United States of ethnic minorities’ human rights and fundamental freedoms, referencing death rates among Black Americans during the pandemic.
On the topic of human rights, Chinese embassies in Argentina, Antigua and Barbuda, Bolivia, Chile, Colombia, Cuba, the Dominican Republic, Ecuador, Grenada, Guyana, Peru, Suriname, and Uruguay used their websites, social media, and interviews to comment on China’s rights-related achievements, employing language from a July 2020 MOFA article titled “What’s False and What’s True on China-related Human Rights Matters.” In August 2020, another article, “Fact check: Pompeo’s fact-twisting China speech versus the truth,” was circulated by Chinese embassies in LAC. Both articles argued that China’s successes in containing Covid-19 demonstrated its unfailing commitment to human rights.
Foreign Minister Wang Yi further promoted China’s “people-centered” definition of human rights during the 46th session of the United Nations Human Rights Council in 2021. There he noted that a government’s focus on “people’s sense of gains, happiness and security” is the “the fundamental pursuit of human rights.” According to this formulation, as The Diplomat editor Shannon Tiezzi has noted, economic prosperity tops the list of priorities, and the concept of “happiness” replaces more concrete markers like racial and gender equality or freedom of religion. Security is also elevated to a human rights priority.
The political isolation of Taiwan was yet another objective of China’s COVID-19 outreach over the past year and a half, as China sought to curry favor with Taiwan’s allies and reinforce ties to countries such as Guyana, where Taiwan had made diplomatic overtures. China’s efforts in this area marked a clearer-than-ever departure from its foreign policy of noninterference in LAC domestic affairs.
In most cases, China’s pandemic-era influence on Taiwan’s allies has been indirect. Throughout the pandemic, Chinese PPE donations and vaccine sales were directed nearly exclusively to countries with diplomatic ties to China. This led some in the region to question their political allegiances. According to the Financial Times, Carlos Alberto Madero, Honduras’s chief cabinet coordinator, said that access to vaccines was “much more urgent than anything else,” including a continued alliance with Taiwan. Others sought a “diplomatic bridge” to Beijing—a prerequisite for vaccine sales. In May 2021, Honduras reported that the government of El Salvador might assist in vaccine negotiations with China. A Paraguayan industry group known as the Agricultural Coordinator requested help from Beijing in mid-April through a series of letters to China’s MOFA and the Chinese ambassador in Brazil.
In other cases, vaccines have seemingly been used to reward or discourage government decision-making on Taiwan and other matters. The timing of a vaccine donation to Guyana led some to speculate that the Caribbean nation was rewarded with the doses after deciding to close a new Taiwanese commercial office. And in Brazil, China reportedly halted the shipment of raw materials necessary for the São Paulo-based Butantan Institute to produce China’s CoronaVac vaccine after Brazilian President Bolsonaro suggested that China disseminated COVID-19 as a tactic of biological warfare.
Many Chinese companies, from large tech conglomerates to smaller-scale construction firms, assisted LAC during the pandemic. For the many companies involved in China’s international outreach, the pandemic, while problematic for their global operations, was also an opportunity to showcase their capabilities to foreign audiences or demonstrate their commitment to the countries and communities where they work. Indeed, instances of PPE donations by Chinese companies were most extensive in those countries where Chinese companies maintain a far-reaching presence, where ties need reinforcement, or where Chinese firms have sought to establish a more prominent footprint.
Donation announcements by Chinese companies were most evident in Panama, which arguably falls into all three categories. Panama has been a priority destination for Chinese companies for more than a decade, having been featured in Chinese Ministry of Commerce “going-out” guides since 2010. It received renewed attention from Chinese investors after cutting ties with Taiwan in 2017, but some Chinese projects have been suspended under the Laurentino Cortizo government—the product of enhanced legal scrutiny, problems associated with project contracts, and the adverse effects of the pandemic, according to China-Latin America relations expert Evan Ellis. Amid the pandemic and persistent political uncertainties, Chinese companies have underscored their commitment to the country through donations and other forms of assistance. Huawei alone made at least seven different donations of various sizes to Panamanian government offices and communities between March and September 2020.
Argentina was also a primary recipient of Chinese company donations, at a moment when China-Argentina economic and political ties are strengthening. Several new projects have been announced in Argentina under the Alberto Fernández government, including China Machinery Engineering Corporation’s investment in a train car production facility in Santa Fe, Argentina; the approval of Phases 4 and 5 of its Cauchari Solar project; and talk of a China-financed gas pipeline running from the Vaca Muerta shale field in Argentina to Brazil. With current and future operations in mind, the following Chinese companies donated to Argentina early in the pandemic: construction firm Gezhouba, which is partially responsible for building the Condor Cliff and Barrancosa dams in Santa Cruz; Bank of China and ICBC; Huawei; China Railway Engineering Corporation and China Railway Construction Corporation, which are upgrading the Belgrano Cargas and other rail networks; and Alibaba.
For the many companies involved in China’s international outreach, the pandemic, while problematic for their global operations, was also an opportunity to showcase their capabilities to foreign audiences or demonstrate their commitment to the countries and communities where they work.
Chinese companies were also active in PPE distribution in Brazil, where China’s economic interests are extensive and growing. Firms such as Gree Electric, which sells electronic appliances in the country; Trip.com, a Chinese travel website; and the Industrial and Commercial Bank of China, which provided finance for the Port San Luis expansion and Jupia and Ilha Solteira acquisitions, made donations to Brazil amid the pandemic. In the case of Brazil, Chinese companies may see value in highlighting their commitment to Brazilian communities at a moment of relative volatility in China-Brazil relations. Some donations to Brazil through sister cities/provinces networks made explicit reference to the countries’ strained relations—they arrived in boxes labeled “[w]e stay together through storms and tensions.”
For China’s tech firms, the pandemic also pro-vided an opportunity to showcase new biomedical technologies and artificial intelligence-enabled diagnostic capabilities. LAC and other developing regions are critical markets for China’s major tech and telecommunications companies, especially as Huawei and others face obstacles in Australia, Europe, and the United States. Huawei, in particular, has sought to diversify its offerings in LAC, including in the area of medical technologies, in anticipation of possible obstacles to 5G equipment sales. During the pandemic, Huawei donated computerized imaging solutions to the Dominican Republic, and Huawei and Huiying Medical Technology Co., Ltd. offered AI-enabled auxiliary diagnostic systems to hospitals in Ecuador. The former vice-president of Ecuador, Otto Sonnenholzner, thanked Huawei on Twitter in March 2020, noting that Ecuador had become the first country in Latin America to have AI-enabled diagnostics in two local hospitals.
The pandemic has also amounted to something of an international debut for China’s pharmaceutical companies.
The pandemic has also amounted to something of an international debut for China’s pharmaceutical companies. In addition to co-producing some vaccines and treatments and holding trials in LAC and other regions, China’s three vaccine manufacturers became household names in LAC as Chinese vaccines were administered across the region. Regional views of China’s biomedical capability will largely be deter-mined by the efficacy of its vaccines, but the linkages developed between Chinese and Latin American pharmaceutical companies will be productive beyond the pandemic. Vaccine trials and research were conducted with Fundación Huésped in Argentina and the Butantan Institute in Brazil. In addition, Interferon Alfa-2B, an antiviral treatment produced by Cuban-Chinese joint venture Changheber, was among the medicines selected by the Chinese National Health Commission to fight Covid-19 infections in China.
[i] Observation based on author review of reader commentary in Chinese-language Weibo posts about China’s vaccine diplomacy. The vast majority of comments by Chinese netizens reflect a positive view of China’s overseas outreach. Numerous posts included the phrase, “大国担当 ,” or “acting like a great power.”
[ii] Bolivia, Brazil, Chile, Colombia, the Dominican Republic, Ecuador, El Salvador, Grenada, Mexico, Suriname, and Venezuela had all established Twitter accounts pre-pandemic.
[iii] Interview with author on the condition of anonymity, July 2021.
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