US and China Vie for Latin American Influence
Dr. Jorge I. Dominguez previously held responsibilities as Antonio Madero Professor for the Study of Mexico at Harvard University. As a longtime Latin American scholar, Dr. Jorge Dominguez maintains an interest in political and economic developments throughout the Western Hemisphere. As explored in a Time article, one emerging theme in 2021 is a struggle between the United States and China for influence across Latin America.
The statistics supporting China’s growing clout are compelling. In 2019, the last year before the pandemic, Chinese corporate investments in the region totaled $12.8 billion, which represented double-digit growth. With 19 Latin American and Caribbean nations having signed onto the Belt and Road Initiative, major projects underway include a $3 billion Peruvian port at Chancay. Now under discussion is a transcontinental railway that would link the continent’s coasts and extend from Chile to Brazil.
With a new administration in the White House, many expect the United States to be more proactive in promoting and safeguarding its interests in the region. During his time as vice president, Joe Biden personified a “good neighbor” approach, as he made 16 visits to Latin America. The initiatives he helped lead ranged from addressing Guatemalan political corruption to Colombian anti-drug efforts.
One major flashpoint may be Panama, where the United States has a legacy that extends to the creation of the Panama Canal in the early 20th century. Now, China is the dominant commercial presence in areas such as the Colón Free Trade Zone. China sees the canal as a strategic lynchpin, as it makes up 40 percent of imports that pass through the zone. One signpost of this is the planned China-financed Panama Colón Container Port, a deepwater logistics complex that will stand on Margarita Island, which was formerly a US military base.
In 2019, with the United States pushing for greater government transparency, a new Panamanian government downshifted on several Chinese infrastructure projects, and there now appears to be a geo-strategic detente evolving, which will impact US-China relations over the foreseeable future.
Notwithstanding these real challenges, on balance China’s trade with Latin America has boosted the region’s exports and contributed to its economic growth. An economically vibrant Latin America is also good for the United States. This combination of effects may smooth US-China relations as well.
