Chinese President Xi Jinping urged Latin American leaders on Tuesday to stand with Beijing in the fight against Donald Trump’s campaign to upend the international system. Xi made the appeal at a ministerial gathering of leaders and senior officials from across Latin America and the Caribbean that’s taking place this week in Beijing.
The President’s appeal underscores the challenging position that Latin American states now find themselves in, caught between the escalating great power rivalry between the United States and China.
Alonso Illueca, CGSP’s non-resident fellow for Latin America and the Caribbean, joins Eric from Panama City to discuss how different countries across the region are trying to foster closer economic ties with China without provoking a harsh response from the U.S.
Show Notes:
- The China-Global South Project: China–Latin America Dialogue Collides With U.S. Trade Offensive by Alonso Illueca
- The China-Global South Project: U.S. Influence Tested as Colombia Embraces China’s BRI by Alonso Illueca
- The China-Global South Project: From Neutral Ground to Strategic Asset: The Shifting Politics of the Panama Canal by Alonso Illueca
About Alonso Illueca:
Alonso E. Illueca is an associate professor at Universidad Santa María La Antigua, where he teaches International Law and Human Rights. He has also served as adjunct faculty at Universidad del Istmo and Universidad de Panamá. He is a partner at Bufete Illueca, Attorneys at Law. Previously, he was an Op-Ed columnist for La Prensa newspaper and a member of the Board of Directors of Transparency International – Panama Chapter and of the Museum of Freedom and Human Rights.
Transcript:
ERIC OLANDER: Hello, and welcome to another edition of the China Global South podcast, a proud member of the Sinica Podcast Network. I’m Eric Olander. Today, we’re going to focus on a region that isn’t getting a lot of attention amid all of the dramatic events that are unfolding in South Asia.
Obviously, the trade talks between the United States and China that unfolded over the past weekend. And then there’s all of the prisoner releases in Israel. And so there’s so much going on today, it’s hard to keep track of everything.
But a very important gathering is taking place this week in Beijing, the fourth ministerial meeting of the China-CILAC Forum. Now, if you’re not familiar with CILAC, that is the Community of Latin American and Caribbean States. They are getting together in Beijing.
And it’s interesting because this began back in 2014. And while this forum hasn’t had the same level of consistency that, say, the Forum on China-Africa Cooperation, that’s the FOCAC Forum with Africa has had, where they meet every three years, I suspect that we’re going to see a lot more emphasis placed on these meetings between Latin American, Caribbean and South American leaders, just because the role that this region is now playing in China’s foreign and commercial policies.
Let me just bring you up to date on some of the numbers from last year. The region did $489 billion worth of trade with China. That is likely to expand considerably in 2025, in part because China is now shifting more of its agricultural buys away from the United States towards South America, particularly countries like Argentina and Brazil.
Just last week alone, a Chinese delegation in Buenos Aires signed a $900 million letter of intent to buy soybeans, vegetable oil, other commodities like that. And that is all part of the shift away from the United States. So even though the U.S. and China may have reached a tentative trade or tariff agreement and leading to possibly what will be a trade agreement, there is every indication coming from the Chinese that they do not want to rely on the United States for food anymore and energy. And that is going to shift probably a lot of that to South America. So we’ve also seen huge moves into the Brazilian market as well by the Chinese, buying a lot more meat and corn and soybean. And that might explain why for the first time in 10 years, Xi Jinping addressed the SELAC Forum in Beijing.
This is, again, a forum that started back in 2014. He has not been very actively engaged in the forum, but this year is different. We also saw Chinese Foreign Minister Wang Yi on Monday meet with nine Caribbean foreign ministers.
And now this is a ministerial gathering. It is not a heads of state leaders gathering. Nonetheless, three South American leaders are there.
The president of Brazil, Luiz Inácio Lula de Silva, Colombian president Gustavo Petro, and president of Chile, Gabriel Boric, are all there. So that makes it notable as well. And we’re going to find out what are on some of their agendas as well.
So again, all of this is happening in the backdrop of the U.S.-China competition, where the United States in the Trump administration has asserted a lot more desire to make the Western Hemisphere their sphere of influence, much like it was in the 19th century under what used to be called the Monroe Doctrine. Let’s get a perspective now on everything that’s going on from CGSP’s non-resident fellow for Latin America and the Caribbean, Alonso Illueca, who joins us from Panama City, Panama. A very good evening to you, Alonso.
ALONSO ILLUECA: Thank you very much, Eric. Happy to join you here and happy to talk about the CELAC Forum.
ERIC OLANDER: There’s a lot going on. We’re going to talk about the CELAC Forum, but we also want to talk about what’s going on with Colombia, who has signaled its intent to join the Belt and Road Initiative, and you’ve done some excellent writing for us on that, as well as the latest coming from Panama, where you are right now. Well, let’s talk about the CELAC Forum.
You wrote a fascinating article for us to kind of set it up in saying that this is all happening in the context of the U.S.-China competition, particularly in Central and South America. Tell us about some of the key themes that we expect this week at CELAC and what the ministers and the heads of state, what are they going to Beijing with their intent for?
ALONSO ILLUECA: So they go to Beijing in a very complex moment in Latin America and the Caribbean relations with both the U.S. and China. It is firstly important to note that CELAC, by definition, excludes only two states from the America’s hemisphere, which are Canada and the U.S. This, of course, makes CELAC a very valuable alternative for the Chinese foreign ministry and for the Chinese state as a whole, because it, by definition, excludes its most important geopolitical adversary. From the perspective of most states, what we currently have in this environment of geostrategic competition between China and the U.S. is the need not to take sides. So there are some states that are not willing to pick a side, that they are trying to maintain some type of neutrality in the context of an increasing rhetorical and practical competition and even confrontation, some people would say, between the U.S. and China. So this takes away most of the important developments that could end up happening in the CELAC meeting. And why is that?
Because most of the states are not sending high-level delegations to the China CELAC forum. Yes, we do have an important representation in the Caribbean, and we do have three heads of states. Most of those states, the states that send their heads of state to this forum, they are from the democratic left of the continent.
And the current pendulum in the region is tending to go to the right, is tending to go to a more Trump-aligned realm. And in that regard, this is going to be very interesting to see how it’s going to end up developing in the next couple of years. Because, for example, you have the President of Colombia there, you have President Petro, Gustavo Petro, and he’s facing elections in two years.
You also have President Lula da Silva, who’s facing elections next year. You also have President Boric, who’s also facing elections. And in all of these three states, you have high likeliness of a right-wing or a, let’s call it, Trump-oriented candidate winning the election.
So how significant are going to be any of the agreements acquired in the context of the China CELAC forum, that’s about to be seen. Because yes, indeed, Colombia is participating at a very high level. They have expressed their intent to join the Belt and Road Initiative.
But this could very quickly go south for Colombia if you get a right-wing-oriented candidate to win the next presidential elections.
ERIC OLANDER: So why would they go? So why would they go if there is political risk for them to do so? And I mean, obviously, Lula in Brazil, he is leaning very much into an anti-US bloc.
I mean, he was in Russia with Putin and really kind of in a very celebratory mood. He has also embraced China quite a bit. And he’s been very outspoken against Trump and the tariffs.
Lula makes sense in some respects because he’s speaking to his base. But in terms of Boric and in Colombia, why would they be doing that if there is political risk to align themselves more with China facing a backlash domestically from the right wing?
ALONSO ILLUECA: I would think that for Boric, it’s basically a very easy choice for him because you have with Chile what I would like to call strategic dependency with China, particularly in critical minerals, Rion. You have Chile, who is part of the lithium triangle in South America, which is the place where most of the lithium reserves of the world are located. So you have a very significant presence of Chinese companies involved in not only the extraction, but also the refinement of lithium.
The same applies for another critical mineral, copper. So you also have Chile as a very significant producer of copper and you have China as the main place where the refining of copper takes place. So you have like a natural alliance, a natural partnership.
You also have President Boric as a left wing oriented president. Yes, he’s not the type of left wing leader that is going to defend every single thing that authoritarian left tends to do around the world. He has taken very strong positions vis-a-vis the war in Ukraine, but he has also signaled his intent to abide by international law on the situation in Gaza.
So yes, he’s a different type of partner, but also a natural partner for China in this regard, particularly in the sectors of critical minerals, and being most particularly with lithium and copper. In the case of Gustavo Petro, then the situation gets more complex because Petro received some type of a warning from the Trump administration of what the Trump administration was willing to do in order to face any type of dissent within Latin America. When President Petro got in a discussion with President Trump on X on late January, this discussion lasted just for a few hours.
But the response of the U.S. was so overwhelming that I do think that President Petro and some sectors of the Colombia security establishment realized that they have strategic dependency on the U.S., particularly on the trade realm, because you have trade imbalance and you have significant partnership between the U.S. and Colombia on trade. So what was the strategic decision that the government of Petro is now taking? They want to diversify.
They want to acquire new relationships. And due to their political alignment or ideological alignment, they see China as a reasonable alternative. So they are proposing in a country that it is very conservative, that it is very U.S. oriented, and that has significant alignment with the U.S. They are strategic partners of NATO, the only country in Latin America that is a strategic partner of NATO. They are presenting this option to the general public in Colombia that can be misrepresented. It can be misrepresented because most of the people are going to understand this in a binary approach. They’re going to say this is either the U.S. or China. There is no strategic dependency. You are aligned with one or you align with the other. And I don’t see at this current moment President Petro having enough political leverage and enough political capital in order to sustain such a consequential and such a significant policy re-approachment, like taking China’s side in the current geopolitical competition with the U.S. That’s going to be very hard for most of the Colombians.
ERIC OLANDER: And again, because as you mentioned, Colombia was one of the first targets of Trump’s ire of any country in the world. Remember that the Colombian president said, Gustavo Petro said that he did not like the way that immigrants were being repatriated back in military planes. And he just requested that they be brought back in civilian planes.
And that generated a huge pushback from the White House and from Trump. So to join the Belt and Road feels in many ways, at least the optics of it, like a slap in the face to the Americans that you’re really provoking a very, very strong response, especially given what happened in Panama, where Secretary of State Marco Rubio was so proud in terms of forcing the hand of the Panamanians to withdraw from the Belt and Road. And so this feels like, I think in Washington, they’re going to consider this to be a considerable affront.
And I’m just again, I see the economic realities of it and diversification makes sense. But the political risk that he seems like to be taking to be able to draw the Americans in onto their focus doesn’t necessarily make a lot of sense to me. But maybe you can shed some light on that and what the calculation is.
ALONSO ILLUECA: Yeah, I agree 100 percent with you. And I do feel that there is some type of strategic misrepresentation from the Colombian security establishment and the foreign policy establishment, because I don’t think they do not fully understand the way in which the Belt and Road Initiative actually works. I think that the same happens whenever we talk about the China Select Forum, because this is something that is very idiosyncratic for Latin America.
Whenever you talk about Latin America and multilateral institutions, you tend to think about international law institutions. You tend to think about the OAS. You get a formal international organization with a treaty in force and with a permanent secretariat and different bodies that serve to promote values and principles such as human rights, transparency, anti-corruption and democracy.
In turn, you get Select or the China Select Forum and the Belt and Road Initiative as more of an informal multilateral security and commercial and democratic frameworks which lack formality. And this is very important because you have two different types of models in Latin America and the Caribbean and in Asia as a whole. In Asia, you have institutions such as ASEAN that tend to work more in the informal realm.
In Latin America and the Caribbean, we tend to create a lot of international organizations. You can have maybe as much international organization as you have the amount of states. Maybe in Latin America, if you conduct an adequate account, you have like around 20 and almost 30 international organizations depending on who counts.
And that’s very complex because we tend to be very formal in our approach to this type of situation. So that takes us to two things. One is related to the China Select Forum.
Right now, the China Select Forum, for the first time in its history, lacks a joint plan of action for cooperation. That’s the formal way or the most consequential way in which China and the Select conduct their mutual relationships. And the fact that they currently do not have an existing framework tends or should make the Colombians think, how are we going to conduct this new strategic partnership that we are developing with China?
The second part is, how do we understand the BRI, the Belt and Road Initiative? So the Belt and Road Initiative is not just a collection of roads, ports, airports, and railroads. No, it’s much more complex than that.
It also has the financings of different types of infrastructure works. It also has informal frameworks of chambers of commerce and commerce-oriented entities. And it also has partnerships regarding critical minerals and minerals extractions.
So it’s much more of a complex network that also includes civil society than it appears to the plain eye. And in that regard, I don’t see the Colombian security establishment taking the complexity of this decision into account, because it tends to be seen from a very simplistic point of view as a realignment of Colombia from Washington to Beijing.
ERIC OLANDER: I think, just so I hear you right, so the expectation might be that they sign on to the Belt and Road, and then the next day they’re waiting for their big development assistance checks to come. And that’s the expectation that they’re getting that, oh, we signed on, we’re going to get roads, we’re going to get bridges, but it’s not that simple.
ALONSO ILLUECA: And that’s what actually happened in Panama. The case of Panama is fascinating.
ERIC OLANDER: And Honduras as well, right? Yeah. But Honduras as well signed on to, I think, the Belt and Road, and has still yet to see any of the big benefits coming from it, if I recall.
ALONSO ILLUECA: Just to take a concrete example, the case of Panama is the most illustrative one, because Panama was the first country of Latin America to join the Belt and Road Initiative. And when Panama joined the Belt and Road Initiative, we haven’t seen up to this date, well, of course, now Panama withdrew from the Belt and Road Initiative, but we never saw any single project develop under the Belt and Road Initiative. Then this is because the connections between different infrastructure projects and different financing of infrastructure projects is very informal.
You can have a network of ports in Panama, as we currently have with Hutchins, and you have the Cristobal and the Balboa ports, and they are not formally part of the Belt and Road Initiative, but in practice, whenever China presents the Belt and Road Initiative as a network in Latin America, they tend to include both Balboa and Cristobal. Although they are not formally, in practice, they tend to be very correlated to the Belt and Road Initiative. The same happens with Honduras, because when Honduras established diplomatic ties with China on 2023, the expectation was, again, as you just mentioned, just to have a very, very significant influx of foreign direct investment to build ports, to build railways, to build roads, and that has not been the case.
ERIC OLANDER: We haven’t seen any of that yet, right? Yeah, that hasn’t happened yet.
ALONSO ILLUECA: But also, we do need to take into account that we are currently witnessing a realignment of Latin America and the Caribbean as a whole, as a wider region, because you have the U.S. push to get out Hutchinson ports out of the entire hemisphere. It’s not only just related to Panama and to the Balboa and Cristobal ports, but it also includes different operations they currently have in Mexico and in the Bahamas, if I recall properly. And in that context, it is very important to see what is going to be the counterpoint of Beijing.
The counterpoint of Beijing, basically, is if you’re taking us out of the Panama Canal, then we’re going to build our own canal. And we’re going to do this with the Chancay port in Peru and with the Brazilian port, the Santos port in Brazil. And we’re going to make a huge railway, and we are going to provide a valuable alternative.
This, of course, carries some complexities inherent to that, because the cost per container transiting through the Panama Canal or through the Panamanian Dry Canal, which is the railway that connects Balboa to Cristobal, is significantly lower than any close competitor in the region. So basically, there is no way in which you can compete with Panama.
ERIC OLANDER: Yeah. So that what you’re talking about is this. They’re talking about a trans-oceanic link from Brazil all the way to Peru.
By the way, Peru and the Chancay port, which just opened last year, is also on the radar of the United States. There is talk about pressuring Peru somehow to give it up. It’s a very difficult thing to do.
There’s a Chinese space station in Chile, as well, that is on their agenda. The US special envoy for South America, I think it was the special envoy, spoke out very aggressively against Argentina’s currency swap agreement and denounced the Chinese role in that currency swap agreement. And then more recently, the new US ambassador to Panama really highlighted the importance of ejecting China from Panama as a main priority of his when he came into town.
So you can see that the US is keeping the pressure up in the Western Hemisphere. It really sees it as its sphere, back to where we were, again, in the 19th century. We thought this might have been a bygone time, but it’s definitely not.
But when the United States talks like this, and they talk about ejecting the Chinese from the Western Hemisphere, they see it as a much bigger priority for them than Chinese engagement, say, in Africa or in other parts of the world. What is the feasibility of that actually happening in reality? I mean, even Javier Mele, the most pro-Trump, most pro-Elon Musk president, has made it very clear that the Chinese are not leaving Argentina under any circumstances.
And the billion-dollar letter of intent that was signed last week is yet more evidence that economic engagement can happen even in Trump-leaning right-wing governments. So if that happens in Chile, it’s unlikely that Qingshan and some of the mining companies are going to be ejected. So what is the feasibility of this actually happening, of the Americans getting their desire to eject the Chinese from the Western Hemisphere?
ALONSO ILLUECA: There is a reality right now that we have to live up to. China is a reality. China’s presence in the American hemisphere is also a reality.
And in that current situation, we do need to find ways in which we can directly engage with China without compromising in any way our relationship with the United States of America. If we are going back to a war where you have spheres of influence, what logic will dictate for the Trump administration is that the American hemisphere is for the United States of America and that any and all influence coming from China, from Russia, or from any other part of the world should be completely expelled. But in practice, that is conducive to close to zero results.
You just draw a very important example, the example of Xavier Millet. Because President Millet, during his campaign, he said that he was not going to conduct any type of business with communist China. And I’m quoting him here, communist China.
When he got into office, he rapidly changed his narrative. He basically acquired a narrative towards engagement with China. The same could be said about the different fellow travelers of President Trump.
And I’m using the words of Brian Winter, the editor-in-chief of America’s Quarterly. He refers to this group of countries or group of presidents that are more aligned in their foreign policy towards the U.S. than towards China. These fellow travelers might include President Bukele in El Salvador, President Chavez in Costa Rica, President Arevalo in Guatemala, President Mulino in Panama, President Millet in Argentina, and also President Peña in Paraguay.
All of these presidents, they do see themselves as fellow travelers of the U.S. and they understand or try to make sense out of the U.S. position vis-a-vis China. But in reality, although Costa Rica is trying to expel 5G technology out of San Jose and out of the entire country, in reality, they have to conduct engagement. Because they do have free trade negotiation talks, they do have different type of strategic dependencies with China.
And this, an all-out blackout of the relationship between these countries and China will lead to incremental costs for these countries, to incremental and significant costs. So they need to acquire some type of pragmatic approach. They need to rebalance their relationship with Beijing because they do have some significant alignment with the U.S., but they cannot cut that relationship out 100%, as some people will think. It is easier said than done. And I think that the perfect example for this is the trade war between the U.S. and China. After incremental rhetoric and incremental tariffs, they have reached an agreement in basically scaling down the tariffs, establishing 30% from the U.S. and 10% for the Chinese. And that’s the ideal modus vivendi that they have reached. I think that the same is likely to happen with most of the states in Latin America and the Caribbean. But I don’t see that this is going to happen, for example, in the China Select Forum.
This is not the ideal forum for this, because in the China Select Forum, you’re going to see the alignment of the autocratic left of Latin America and the Caribbean, that is Cuba, Venezuela and Nicaragua, with the democratic left of the Americas, which will include, as you just mentioned, the BRICS partner Brazil, Chile and Colombia. But what is going to happen with the other countries, where you can get this modus vivendi, where you can get this re-approaching with both sides? That’s not going to happen in the China Select Forum.
ERIC OLANDER: The U.S. has lots of leverage in some countries, like Panama. Panama is a dollar economy. If the U.S. wanted to cut off the dollars, that would basically extinguish the Panamanian economy overnight. Colombia, it has a lot of leverage as well, lots of security relationships, and it goes very deep. In Brazil, not so much. And so in the 19th century, the United States asserted its control for this sphere of influence with the deployment of actual military forces into the region that would topple governments.
And we did this right through the Cold War as well. It’s, again, I don’t want to say never, because we’re in such uncharted territory, unlikely that the United States is going to deploy military forces to overthrow governments because they’re too close to China. So what kind of leverage does the U.S. have with a country like Brazil, that is so big and so powerful, and is so tightly aligned with China now, both politically and economically, so, I mean, Trump can scream and yell all he wants, but at the end of the day, even under Bolsonaro, there was a very tight economic relationship between China and Brazil. So at the end of the day, can the United States change the realities on the ground in terms of CELAC countries’ relationship with China? Again, certain ones, yes, but not all.
ALONSO ILLUECA: Yes, of course they can, if they are willing to invest and conduct significant trade engagement. Again, if you can get different options for different countries that are ideologically aligned with the U.S., you could basically make significant changes.
ERIC OLANDER: But let me just stop you there, because this has been the complaint of South American leaders, is that there has been no investment and engagement economically. They’ve talked about this for decades, saying, yes, we are open to business from the United States. Where is the investment?
Where is the comparable type of trade that they’re doing with the Chinese? It just doesn’t seem to be there.
ALONSO ILLUECA: Yeah, it’s all steak and non-carrot. So I think that’s the main problem. If you’re going to conduct a re-engagement with Latin America as a whole, right now what everybody tends to think is that you can get very pro-Trump oriented governments in the region, and you will have very important results vis-a-vis the China-U.S. competition. You’re going to get more U.S. alignment. But as you just mentioned, for example, if you get in Brazil, which is a very likely scenario, the right-wing candidate from the Bolsonaro clan winning the elections, that’s not going to happen automatically. You need to provide further alternatives.
The best example, again, is Javier Milley. The U.S. and Donald Trump, particularly, has never had such a closer ally, rhetorically speaking, and also politically speaking, in the Americas than Javier Milley. And even Javier Milley had to step down his rhetoric against China.
He had to reach some type of agreement in order to continue working because his economic situation is a very dire one, and he has dependency on Chinese financing. And in that regard, the only way in which the U.S. can fully take Argentina to U.S. camp is by engaging significantly economically and commercially. And that’s also very difficult because, again, for the case of Brazil, the dependency that Brazil has for its agriculture, for its agri-industrial complex, is very much drawn upon to China.
ERIC OLANDER: And that’s only intensifying now as more buying goes to China and less to the United States and other places.
ALONSO ILLUECA: Exactly. But that also shows how flawed, basically, the current strategy of the U.S. is, because how do you conduct further engagement with a significant bloc such as Mercosur, which is the bloc that includes Brazil, Argentina, and Atlantic-oriented South American countries? Basically, you need the EU there.
You need the European Union as a key partner of the U.S. because the EU together with the U.S. can provide a significant alternative that could balance the China relationship of this bloc. But again, the EU, which has close ties with Mercosur, they are currently negotiating a free trade agreement with the Mercosur, is in no way closer to competing with China if it doesn’t have the participation and the partnership of the U.S. And this is very, very consequential because Mercosur, as I just said, is Atlantic-oriented, so it should naturally go everything to the U.S. and the European Union. But all of these countries as a bloc, or individually in this case, are more willing to engage with China if they get some different benefits out of that relationship. And this is something the Chinese foreign policy establishment is and remains very effective in doing so because they are very agile in identifying the key sectors in which they can create strategic dependency and also draw all these countries closer to their fears of influence. And in that regard, we, as a very Western-oriented society, and I’m not talking about me as a Panamanian, but Latin American and Caribbean countries as a whole, we just tend to think about commerce, trade and economic relationship with superpowers in whole terms instead of individual and cluster terms.
ERIC OLANDER: Two other topics I want to get to before we let you go, because it is getting late for you. Taiwan is probably going to be on the agenda in Beijing this week, in part because Taiwan, although its diplomatic representations around the world are shrinking, more are concentrated in the Caribbean and Latin America still today than any other part of the world. Do you expect Xi and Wang Yi to really push these countries on the question of the one China policy and lobbying them to abandon Taiwan, to follow what Honduras did and to abandon Taiwan and to switch their diplomatic recognition to China?
Is that going to be on the agenda this week?
ALONSO ILLUECA: I do believe there is a high likeliness that that’s going to be in the agenda in two countries to be very specific. Number one in Guatemala, because in Guatemala, a very significant event happened in 2023. In 2023, the Central American Parliament took a vote and decided to expel Taiwan and include the People’s Republic of China as an observer state.
And why is this significant? Because in Central America, you only have two countries which maintain diplomatic ties with Taiwan, with the Republic of China. These are Belize and Guatemala.
And the permanent seat of the parliament is located in Guatemala. So what did China gain out of this very consequential decision? They gained diplomatic and strategic presence in Guatemala in order to further curtail the ties between Taipei and Guatemala.
The other important partner is Paraguay. So Paraguay, there is some interesting push being carried out by the People’s Republic of China in order to push the last remaining ally of Taiwan in South America to good ties with Taipei. So I do see that in the context of CELAC having an inclusive dialogue of 33 states in Beijing, I don’t see President Xi or Foreign Minister Wang missing the opportunity to tackle the Taiwan agenda and try to take away two of the most important allies they currently have.
ERIC OLANDER: And you recall last December, there was an incident in Paraguay where a Chinese diplomat who came under the auspices, I think under a UN auspice, I think of some kind, started speaking out about Taiwan and criticizing Paraguay for its position on it. And they expelled him. And then on their ex-feed, they put a picture of the Chinese diplomat at the outgoing immigration and getting pushed out.
I mean, it was a very strong expression of support for Taiwan when they did that. So it’s unlikely, I think, that Paraguay is in play for this. But maybe you think there’s possibility of movement on the Central American countries that they’re open to being flipped?
ALONSO ILLUECA: I do see Guatemala because the current president is a Democrat from the left wing of the ideological sides. So he will be more willing to conduct any switch than any other previous president that Guatemala has ever had. And one important thing in that regard is that this is one of the strategic importances for China of the CELAC.
Because the CELAC, as an organization or as an informal gathering of states, is not a values-oriented entity. It is not oriented on preserving the importance of democracy, transparency, and human rights. Basically, it’s very prone to including autocracies.
It includes in a very significant leadership position Venezuela, Cuba, Nicaragua. So in that regard, it’s the ideal place for China to increment its presence in the region. If you go to another institution in Central America, for example, just to be very clear, for example, the CICA, the Central American Integration System, there you have the values of democracy, transparency, and human rights as the cornerstone of the integration system.
Logic will dictate that that will make very, very unlikely that Taiwan will be expelled. But as the Parlasen case shows, Chinese diplomats are finding very interesting ways in finding some sort of avenue to making certain countries of Central America to cut ties with Taipei and establish them with Beijing. But I would like to reemphasize on the importance of the Taiwanese foreign policy.
After Taiwan democratized itself, it changed its dollar diplomacy to a more values-oriented foreign policy. And that value-oriented foreign policy, I think, remains very significant if it is proven to be effective to the other side. The problem we currently have in Central America and the Caribbean is the countries where you’re to implement a values-oriented strategy, foreign policy, are countries that they have a very weak democratic system, very poor record on corruption, and also a very, very weak history in human rights.
So that makes the values-oriented diplomacy, although something that I fully share, maybe not as effective as other types of engagement will make Beijing, I don’t know, prosper in the region.
ERIC OLANDER: I guess that’s what surprised me a little bit about what happened in Honduras, because I thought, and I just made the assumption that when Honduras made the switch that China was going to use it as an example and bestow huge amounts of cash onto Honduras as an enticement to those last remaining countries to say, see what happens if you join us, you will benefit. And the investment from the Chinese to make a big impact in these countries is relatively small, given the size of Honduras and Guatemala, for example. You wouldn’t have to, I mean, we’re not talking about $10 billion projects in order to make that kind of impact and to justify the switch.
Honduras, though, is a little bit of a cautionary tale right now, because as you pointed out, not a lot of money has come, there hasn’t been a lot of benefit for it, and this is another vector of US pressure, because the United States does not want countries, these last remaining countries, to switch their allegiance to China. So by switching, you also provoke the United States for more pressure, which is the last thing a lot of these countries want to do. So the financial rewards, you would think, would have to be so sizable in order to take the jump.
And the Chinese don’t seem to be rolling out the red carpet and bringing out the checkbook to do that. I guess that’s just a surprise on my part.
ALONSO ILLUECA: Yeah. And also, if you take into consideration, for example, the domino effect that Panama created in 2017 by switching sides, after Panama changed sides, it came Dominican Republic, El Salvador, Nicaragua, and then Honduras. So most of the countries of Central America up until 2017 did recognize Taiwan.
What was the incentive? Again, you have the Democratic Progressive Party in power in Taiwan at that time, and you have a very values-oriented foreign policy. From its part, you get China’s rise and you get the discursive impact of the Belt and Road Initiative reaching the foreign ministries of most of the countries in Central America.
So there was an incentive. But in practice, that incentive was not based on factual realities. Because the other example was Costa Rica that switched sides on 2008, if I recall, 2007, 2008.
When Costa Rica switched sides, the only significant reward they got was a new soccer stadium in the middle of San Jose. For the other countries that have switched sides, for Panama, basically people are still trying to get what was the significant benefit. There are some sectors saying that basically there was a bribe that was paid to the president.
I don’t see that as a reality. I think that there were some non-reimbursable cooperation agreements, but that didn’t translate into significant benefits. But also you get El Salvador, they got a library that was a donation from the Chinese.
You get Dominican Republic, also no significant advances there or no significant tradeoffs. So you get a mixed bag of results. And most of the countries that are kind of delusion from this wave of decisions that took place since 2017 are now looking back at the U.S. camp and saying, hey, you were right. You were saying that this was an empty bag of promises. Now we want to re-engage with you, but also rebalance our relationships with Beijing. So this is the delicate place in which Central America currently is in.
And I don’t see a way in which countries with the current rhetoric between Washington and Beijing can conduct a factual and honest rebalancing exercise. Right now, what we currently have is just requirements of expelling Chinese influence. But also you get the necessity of most states of maintaining relationships, because as the examples of both Guatemala and Honduras show, if you have strategic dependency with China and you do not conduct amicable relations, basically what you can get is a stick also.
And they can basically take to bankruptcy the shrimp industry in Honduras or in Guatemala.
ERIC OLANDER: Well, let’s close our discussion back on the China CELAC forum that’s taking place this week in Beijing. As you pointed out, three heads of state are there, at least nine foreign ministers are there, but a lot of senior officials. Now, in the African context, at the end of these forums, there’s always a big number.
So last FOCAC, it was 51 billion dollars of development assistance. My recollection is that the China CELAC forums don’t always have these numbers tied to the final communiques and the final statements that come out of this. What should we expect at the end of all of this?
What comes out of a China CELAC forum like this?
ALONSO ILLUECA: So only in the first China CELAC forum there was an actual commitment. The first joint plan of action for cooperation basically promised that China will invest 250 billion dollars in the next decade in Latin America and the Caribbean, and that they will strive for achieving inter-trade volume of around 50, sorry, 500 billion dollars.
ERIC OLANDER: Which they’ve gotten close to, by the way. They’re at 489 now. So that part they’ve achieved.
ALONSO ILLUECA: Exactly. So maybe we could see a big announcement because, again, we’re already closing into the 10-year gap. So maybe they’re going to propose a new cap, a new bounty to be achieved.
And in that regard, that’s going to be very significant. But again, we have currently a way in which the China CELAC forum has operated. We have joint plans of action for cooperation.
But currently we do not have a joint plan of action for cooperation. In that regard, if we don’t get this type of document, what that will indicate is that the relationship between the CELAC and China is transforming. So maybe these objectives that they will join these set forward, that’s going to be the most significant and reliable outcome we could get from the China CELAC forum.
On the other side, there is also an interesting thing, the side meetings. So we might not get significant announcement, but what we are currently getting, all the juices or all the beef right now is on the side meetings. Because you get President Petro there.
You get Colombia joining the Belt and Road Initiative. You get Chile’s president there. You get lithium and copper cooperation.
You also get President Lula there. And maybe you get the Bioceanic Corridor, this dry canal connecting Pacific and Atlantic from Peru to Brazil getting done there. So yes, it is an important framework.
But as part of an informal multilateral framework, it tends to be informal in its own nature. So most of the agreements we could get or most of the announcement we could get can be very narrow in their scope. And maybe for some observers, non-consequential at all.
But also we need to pay close attention to other bilateral developments that are being currently taking place. That’s also very, very important. And also the ideological response, because all of these countries are closing in with Beijing.
And what is going to be the response from the U.S.? Is the U.S. going to provide for an alternative? Is the U.S. going to provide for some type of reinvigorating process for the most significant competitor to the CELAC, which is the Organization of the American States? That’s about to be seen.
So in this context, I see an environment plagued with uncertainty.
ERIC OLANDER: The article is China-Latin America Dialogue Collides with U.S. Trade Offensive. It was written as a preview to CELAC, but at the same time, I think it’s very much relevant because the issues are not going to go away even after this week’s meeting in the China-CELAC forum that’s taking place in Beijing. Alonzo, thank you so much for your time today and all of your insights.
Alonso Illueca is our CGSP Non-Resident Fellow for Latin America and the Caribbean and doing some excellent work. By the way, all of Alonzo’s writing on our site is open to everybody. It’s not behind the paywall.
So I really encourage you to come check it out. I’m going to put a bunch of his articles in the show notes as well. And so everybody can see the amazing work that you’re doing.
So thank you again, Alonzo. I appreciate it. And we’re looking forward to having you back on the show.
ALONSO ILLUECA: Thank you for the fascinating talk, Eric. Happy to be here.
ERIC OLANDER: We’ll be back next week, Cobus and I, with another edition of the China Global South podcast. Until then, I’m Eric Olander. Thank you so much for listening and for watching.
