Updated: Dec 9, 2020
Below is a hand-picked selection of the most important stories between China and Latin America over the past week.
Bolsonaro juggles domestic political rivalries with Brazil's US and China relationships, Bogota's China-backed metro officially begins construction in Colombia, and speculation over Latin America's future with a Trump or Biden administration.
All text are direct excerpts from the articles, with my comments in italics.
Brazilian President Jair Bolsonaro killed a deal last week to buy a potential Covid-19 vaccine being developed by China, provoking a dispute with state governors and contradicting his own health ministry. While the argument may seem local, it is really another front in the US-China tug of war for global influence.
Bolsonaro cancelled the contract on October 21, just two days after Health Minister Eduardo Pazuello agreed to purchase 46 million doses of CoronaVac, being developed by China’s Sinovac Biotech. “The Brazilian people will not be anyone’s guinea pig … Hence, I have decided not to purchase this vaccine,” Bolsonaro wrote in a Facebook post.
This all happened the same week Bolsonaro met visiting US national security adviser Robert O’Brien, who was “accompanied by the largest economic-focused, high-level delegation from the US government in decades”, according to a statement by the US embassy in Brazil.
The US delegation committed to investments in Brazil worth US$2 billion, according to the embassy...
...According to a June report in the Folha de Sao Paulo newspaper, Brazil’s Foreign Minister Ernesto Araujo told Bolsonaro to ban Huawei from bidding for the country’s 5G network, citing a document in which Araujo is said to have described the company as a security risk. A Brazilian decision on 5G suppliers is expected next year.
Meanwhile, Bolsonaro’s decision to reject the Sinovac vaccine could end up in the courts.
...Brazilian states have a large degree of autonomy so Bolsonaro’s move on Sinovac is not yet so clear cut, according to Niu Haibin, senior fellow at the Centre for American Studies at the Shanghai Institute of International Studies. “If the state government does not need the federal government’s funds, then purchasing a vaccine is within its purview,” he said.
Separate from the deal blocked by Bolsonaro, Brazil’s health regulator Anvisa said in a statement on Friday that Butantan Institute could import 6 million doses of CoronaVac, but clouds now hang over the testing of the vaccine among volunteers in Brazil.
During the last week, Colombia witnessed the inauguration of two of the largest infrastructure projects in the country of public-private equity between the national government and China. Among the most anticipated is the construction of the First Line of the Bogotá Metro, officialized during a ceremony with Mayor Claudia López and Wu Yu of Metro Línea 1 S.A.S. – the concessionaire representing China Harbor Engineering Company Limited and Xi’An Metro Ltd.
The ceremony at the designated work yard in the locality of Bosa launches the largest transportation public works project in Colombia with an initial investment of US$5.2 billion, of which the national government will finance 70%.
Photo credit: The City Paper Bogotá
...President Duque hosted last Friday another delegation of Chinese investors from Zijin Mining for the inauguration of Buriticá – an underground gold project located in the folds of western Antioquia, and which was acquired from Canadian miners Continental Gold for U.$1.4 billion. Buriticá has the potential to extract 3.5 million ounces of gold and more than 6.4 million ounces of silver.
General Latin America
If Donald Trump is re-elected, it is likely that the US will step up pressure on Latin America to limit – if not eliminate – relations with China. A heavy-handed approach can be expected. If former vice-president Joe Biden is elected, his government would likely pursue a more collaborative regional approach that might even include some cooperative ventures with China.
...If Trump is re-elected, an even more aggressive policy toward Latin America can be expected. There would likely be more of an “us against them” approach, especially with respect to high tech but also more generally, and it would be harder for Latin America to avoid taking sides.
If Latin American countries back down and distance themselves from China, it would mean less money to get regional economies growing again, making them less attractive to other investors and resulting in a vicious circle of low growth.
...A Biden administration would likely focus less attention on Latin America due to other priorities, especially increasing investment within the US itself and mending relations with European and Asian allies. This would provide more space for Latin Americans to make autonomous policy decisions, and more attention would be directed to regional cooperation.
In this case, Latin America could continue to do business with both the US and China as well as third countries. Some pressure would probably be exerted, especially with respect to 5G, but no steps would be taken toward a general ban on relations with China.
First, building and maintaining constructive ties with the region requires consistent partner-like actions and narratives. For instance, cultural and interpersonal ties are among the United States’ most significant and irreplaceable comparative advantages in the hemisphere vis-à-vis China.
“Second, in areas where the next administration considers China to be a strategic competitor such as 5G or official lending, the United States needs to provide the region with feasible alternatives to China. Initiatives like America Crece signaled a pivotal first step in this direction. However, since US government resources may not always prevail in absolute terms, the continuation of focused resource mobilization will be vital. By focusing on strategic issues such as standards, transparency, private-sector engagement, and working with its allies, the United States could accentuate its own advantages and mitigate the financing disadvantage.
“Third, Latin America would appreciate more nuances in US policymaking. Specifically, on China, regional governments and companies will continue working with China—as with the United States—driven by practical commercial needs. As such, countries cannot choose sides especially at a moment of deep demand for investment and new export opportunities. The next administration should identify, globally and in Latin America, not only the areas of competition but also constructive collaboration or necessary coordination with China. This may include immediate challenges such as COVID-19 or longer-term challenges such as climate change. After all, the United States should remain committed to hemispheric prosperity and stability because of the region itself, not because of China.”