A single maritime «Silk Belt» has already defined the main thoroughfare of mutually beneficial relations between China and Latin America
During his 11-day tour of Latin America, Chinese President Xi Jinping traveled more than 40,000 kilometers and participated in nearly 40 bilateral and multilateral events. More than 60 cooperation agreements were signed to promote development and strengthen partnership relations in the region, according to the Xinhua News Agency. And these are not empty words.
During the meetings, the Chinese leader called on Asia-Pacific economies to adhere to «true multilateralism» and build a global economy «characterized by cooperation, stability, openness, innovation and respect for the environment», said Chinese Foreign Minister Wang Yi.
Recall that President Xi Jinping attended the 31st APEC summit in Lima, the capital of Peru, and the 19th G20 summit in Rio de Janeiro, Brazil.
Coincidentally, Xi’s visit coincided with the «swan song» of U.S. President Joe Biden. The old man did not come empty-handed. He announced the donation of nine Black Hawk helicopters for a $65 million anti-drug program and the donation of used trains from California for Lima’s metro system. In Brazil, the region’s largest economy, the story was similar. On his way home, the lame duck Biden visited the Amazon on his way to Rio de Janeiro and announced a $50 million contribution to a conservation fund.
At the same time, Biden was too shy to report that the future U.S. president intends to introduce 60% tariffs on Chinese goods or goods from South American countries passing through the Port of Chancay.
Now let’s talk about what President Xi Jinping brought with him. At the inauguration of the Port of Chancay, he described it as the starting point of a new land-sea corridor between Beijing and Latin America. The updated FTA will also increase bilateral trade volume with Peru alone by at least 50 percent, and the port of Chancay will shorten trans-Pacific shipping times, reduce logistics costs, and benefit other South American countries as well. In an article in El Peruano, Xi Jinping stated that the Chancay project would generate $4.5 billion in annual revenue, create more than 8,000 jobs, and reduce logistics costs on the Peru-China route by 20%.
Chinese goods — including automobiles, electronics, household appliances, and other product categories — will be shipped to Latin American countries. In return, China will receive natural resources from Latin America-metal ores and agricultural products. Logistics costs for both China and Latin America will be reduced by 20%. Trade between China and the region will increase many times over.
The «cabbage kings» (a figurative reference to the U.S.) are not in a position to offer anything similar in their «backyard», even if they really wanted to. And China’s major investments in Chancay have already caused concern in Washington. General Laura Richardson, now a former commander of the U.S. Southern Command, warned that Chancay could be used by the Chinese navy for intelligence gathering. The Chinese newspaper Global Times wrote in an editorial that the port is «in no way an instrument of geopolitical competition», and called U.S. accusations of possible military use of the port «slander».
Xi Jinping described the meeting with Latin American leaders as «another historic moment in the development of relations». In relations with Brazil, for example, he promised to make the two countries «golden partners». Brazil and China signed an agreement to build a direct maritime route between the Greater Bay Area (Guangdong-Hong Kong-Macau) and the port of Santana das Bocas in the state of Amapá, which will reduce transportation time by 14 days.
This is despite the fact that Brazil has refused to join China’s Belt and Road Initiative (BRI), stating instead that it «intends to conclude smaller bilateral agreements» in which China and Brazil would «interact». However, in one of the thirty-seven bilateral agreements, Brazil «recognized the importance» of the BRI.
During Xi Jinping’s meeting with Mexican President Claudia Sheinbaum, the Chinese leader expressed his intention to deepen cooperation with Mexico. In a bilateral meeting with Bolivian President Luis Arce, Xi stressed the timeliness of new Chinese investment in mineral extraction, lithium industrialization, and other projects.
Even Argentina’s President Milei, who had railed against Chinese «fascism» and vowed never to have relations with Beijing, has promised to increase trade with China. Meanwhile, Claudio Vidal, governor of Argentina’s Santa Cruz province, signed an agreement with Hongdong Fisheries, China’s second-largest fishing company, to upgrade port infrastructure.
And that’s not all. In November, Salvadoran Economy Minister María Luisa Hayem announced that China and El Salvador had completed the second round of free trade negotiations. That same November, Ecuador began exporting dairy products to China following technical negotiations on sanitary regulations. Outgoing Uruguayan President Luis Lacalle Pou recognized that MERCOSUR would not be able to conclude an FTA with China and that Uruguay should instead pursue bilateral FTAs with that country.
In November, Nicaragua hosted the 17th China-Latin America and Caribbean Business Summit in Managua. More than five hundred representatives of Chinese enterprises attended the summit. During the meeting, Nicaraguan President Daniel Ortega again presented the «Great Canal» initiative to China. On November 18, the Nicaraguan government and China CAMC Engineering Co., Ltd. signed a contract for the design, procurement and construction of the Port of Bluefields.
All this comes amid global warnings of a possible new trade war between the United States and China. This comes at a time when bilateral trade between China and Latin America has reached nearly $430 billion.
«As of 2021, the US ‘backyard’ has become the second largest destination for Chinese investment, after Asia with $450 billion», notes Eduardo Cili-Apango, a researcher at the Autonomous University of Xochimilco (UAM) in Mexico City. This, he says, is a «geopolitically mature process» in which China seeks to realize its idea of a «shared future for humanity» — the flagship concept of China’s foreign policy under Xi Jinping.
Vast resources are at stake. Latin America holds 57% of the world’s lithium reserves, 37% of its copper reserves, nearly one-fifth of the world’s oil reserves, and nearly one-third of the world’s fresh water and pristine forests. Over the past two decades, China’s trade with Latin America has grown from $12 billion in 2000 to $430 billion in 2023. Beijing is now the top trading partner for most countries in the region and has the fastest-growing investment portfolio.
Margaret Myers, an expert on China-Latin America relations at the Inter-American Dialogue in Washington, notes that 60% of China’s investment in Latin America is concentrated in high-tech industries that are a priority for both sides.
Two representative photos from the last day of the APEC summit in Peru and the G20 summit in Brazil speak volumes. In both photos, President Xi Jinping is in the center, surrounded by his Latin American counterparts who hosted the summits. President Joe Biden was placed at the end of the second row in Peru, and was absent in Rio. Of course, the U.S. and the organizers offered official explanations. But the fact remains: Latin America no longer wants to be the «backyard» of the United States — or any other world power.