As the rivalry between the United States and China escalates, ABC News Australia spoke with Margaret Myers, Director of the Asia & Latin America Program, regarding the implications of Sino-American competition in Latin America and China's strategy towards the region.
Question (Q): Is this investment in the form of handouts or loans as we've seen in the pacific?
Answer (A): There's been a history of extensive state-to-state lending but that's declined rather rapidly in the Latin American and Caribbean region over the past five years. What we're seeing now is more in the way of just directing foreign direct investments of various sorts. Some of this is coordinated state to state by heads of state through personalistic ties, in other cases we see investments through traditional mechanisms. Open tenders, public-private partnerships and we see China being really very competitive in those in certain countries.
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Q: So how much of a risk does that pose for these countries, I mean when you're talking about these investments are they strategic assets that they are interested in?
A: At times they are, there is a different degree of sensitivity about this depending on the country that we're talking about. There was a major project in Chile in the in-electricity transmission that generated quite a bit of backlash because of concern among Chileans about sovereignty and national security. There are also concerns among certain segments of the population about national security as concerns about tech and telecommunications investments, but in general the region given the place where it is right now from an economic perspective is looking for investment from anywhere.
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Q: How is the US now hoping to counter this with this sort of charm offensive across a number of countries?
A: I don't know if the US can fully counter what China is doing. The way the US engages with Latin America is so very different from an economic perspective and political perspective than how China does things. But what the US is trying to do through Build Back Better (B3W) and wide-ranging other initiatives that have yet to be announced, I think are in the pipeline, is to demonstrate a much more extensive commitment. Often in partnership with like-minded countries and investors for example Japan and others to provide alternatives for Latin American countries and sectors that are deemed of sort of critical interest from a security perspective.
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Q: It is interesting because so many South American Latin American countries are facing dire financial consequences you wonder, what sort of approach is going to help stabilize that region?
A: Yes, I mean frankly Latin America needs engagement from wide-ranging partners including potentially from China, but much of the success of all of the region must ensure that the right mechanisms [accountability mechanisms] that emit transparency, fight corruption and open transparent procurements. Otherwise we could see a real, I think, expansion of corrupt activity driven by Chinese companies or otherwise.
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Q: Would you imagine that leader to leader, negotiations would be quite problematic?
A: Absolutely, I mean I think it's going to be quite challenging to negotiate any of this right at a moment where Latin America is in a precarious position and looking to advance economic goals by whatever forms. This will be absolutely critical in the coming months and indeed years.
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Q: What strategic interest does China really have in the region?
A: I mean China's interests are wide-ranging of course. As we saw two decades ago they [China] are interested in securing access to resources and interested in securing access to export markets for increasingly high value-added goods. We see an interest in internationalizing Chinese brands also in supporting China's domestic agenda, building railroads to address China's over capacity and steel for example. But there are plenty of other political objectives at play as well. Taiwan-China competition is very much a feature in Latin America and the Caribbean given that this region is a stronghold still for Taiwan internationally. Also we see interest just in simply establishing ties with any countries in the region small or large to garner support for China's international agenda be it with respect to internet governance right or human rights or any wide ranging other matter.
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