American and Chinese influence in South America

This article teases out some of the finer points of US-China economic competition in South America, a place that hasn’t seen this kind of geopolitical jockeying since the Old Cold War. In those days, the US and Soviet Union vied for influence across the continents.

Back then ideology and geography were everything. And communist parties with links to the Soviet Union were systematically weakened by the US, either diplomatically or through other means. So it will be interesting how competition in South America between the US and China plays out this time around.

The Bloomberg article notes, of course, that both the US and China aren’t actively competing.

Both the U.S. and China deny they’re competing with one another. The two countries “can play to their respective advantages” and contribute to the region’s development, Foreign Ministry spokesman Hong Lei said May 21 in Beijing.

While China’s demand for resources will surely keep many South Americans working, it shouldn’t be underestimated how much China needs those resources. The US, while in need of some new infrastructure and manufacturing, of course, has a less industrial economy. The Chinese, and the Japanese and South Koreans for that matter, all engage in resource diplomacy, the pursuit of natural resources partially as a political goal. The reason for this is that China needs many more resources than it is naturally endowed with to keep its economy ticking over. Japan and South Korea have few natural resources. It’s worth thinking about this for a moment, too. As the maritime nature of US-China competition becomes clear, many of the resources the Chinese need will be nearer the US. But that is only if the importance of the physical world reasserted itself, in say, an actual war. For now, across this web of resource deals that the advanced Asian economies are pursuing is another web of trade agreements. The most important one is between the US and Asia is the oft-scorned Trans-Pacific Partnership. The Chinese have proposed their own version, too. But what’s interesting is how instead of the fixed geographical borders and delineations that marked the Cold War, there will increasingly be overlapping bands of affiliation, with some countries consistent partners of the US and some of China, but many more countries somewhere in between, in flux.

The US has deep cultural links to Latin America, which it will have to play up, to bolster its influence. But the Chinese can portray themselves as comrades of the Global South. It will be interesting to see what images and themes the US sends out to try to blunt this advantage.