There’s growing anxiety in the United States over China’s expanding presence in the Latin America-Caribbean (LAC) region. Last week, a Congressional subcommittee held another breathless hearing that warned of the dangers of “Communism on our shores.”
That concern in Washington is based, in part, on surging Chinese trade with LAC countries, more investment, and a growing ideological alignment with Beijing’s worldview among many of the region’s largest countries.
LAC countries are also key destinations for Chinese-backed infrastructure projects as part of the Belt and Road Initiative.
But contrary to the simplistic narratives in Washington about Chinese engagement in Latin America, Bruno Binetti, a China Foresight Associate at LSE Ideas and a non-resident fellow at the Inter-American Dialogue, says the region’s ties with Beijing are undergoing profound change. Bruno joins Eric & Cobus from Beijing to explain how.
Show Notes:
- The China-Global South Project: Odd One Out: Argentina in BRICS? by Bruno Binetti
- Council on Foreign Relations: China’s Growing Influence in Latin America by Diana Roy
- Economist: What does China want from Latin America and the Caribbean?
About Bruno Binetti:
Bruno Binetti is a China Foresight Associate at LSE Ideas, a PhD candidate at the London School of Economics and a non-resident fellow at the Inter-American Dialogue. He was previously a research assistant at the Woodrow Wilson Center for International Scholars and has also worked as a legislative aide in the Argentine Congress. Binetti holds a BA in international studies from Torcuato Di Tella University and an MA in international affairs and development from George Washington University’s Elliott School of International Affairs, where he was a Fulbright Scholar. He writes on Latin American political and economic trends and China- Latin America relations and has taught courses at Torcuato Di Tella University and the Catholic University of Argentina.
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 in Ho Chi Minh City, Vietnam, and, as always, I’m joined by China Global South’s Managing Editor, Cobus van Staden, joining us from beautiful Berlin, Germany. A very good afternoon to you, Cobus.
Cobus van Staden: Good afternoon.
Eric: Cobus, we’re going to cover a lot of ground today, starting in Southeast Asia and then we’re going to make our way to the Americas. We’ve been talking a lot about the Belt & Road and we’re going to keep talking a lot about the Belt & Road over the next few weeks because we are coming up on the 10th anniversary of this very important initiative. And at the same time, the Belt & Road Forum is coming up sometime in October. I haven’t seen a date. Have you seen a date when this thing is actually going to happen? The Chinese seem to play these games where they keep the date secret and then like two days before we hear about it. Do you happen to know what the date is for the Belt & Road Forum?
Cobus: I read the press briefing from the foreign ministry spokesperson every day and they keep getting asked that every day, and they keep saying, “We’ll let you know.” So we will see.
Eric: Okay, good. So it’s not me. Okay. I was worried that I was like, “Am I missing something here?” But you know, they’re so cryptic on these kinds of things. They did that with FOCAC and they do it with all these big events where they keep it a mystery. It’s always surprising to me, though, that none of the invited governments ever leak the information because, you know, they must have a save-the-date card, right? That they send out to everybody. And yet, somehow, with something like 130 heads of state coming, I mean it’s something ridiculous that they said, it’s incredible that they’ve been able to keep the secret.
Nonetheless, the Belt & Road forum is coming up sometime later this month. But here in Southeast Asia, it has been a rather important week for the Belt & Road, in part because the Chinese are battling back the narratives from India, from Europe, and the U.S. and their critics elsewhere that says the Belt & Road is dead. But President Joko Widodo in Indonesia — well, he thinks otherwise. That right there, Cobus, is the sound of progress in Indonesia. That is the sound of the Whoosh high-speed railway that launched this week in Jakarta. It connects Jakarta and Bandung — two of the largest cities. Our correspondent, Antonia Timmerman, who’s CGSP’s Southeast Asia editor, she was lucky enough to be one of the first people to ride the new high-speed railway before it opened to the public last Friday. Let’s take a listen to some of her first impressions.
Antonia Timmerman: Indonesia has launched Southeast Asia’s first-ever bullet train. The high-speed rail line connects two of the country’s larger cities — Jakarta and Bandung. CGSP secured a spot in the trial run period before it was launched for commercial use this week. This high-profile project is part of China’s Belt & Road infrastructure initiative. At first, developers said it would cost about $6 billion U.S. dollars to build the train. But after the COVID-19 pandemic hit, the budget ballooned by $1.2 billion. Some have criticized the loan amount and its interest saying that it could have been avoided if Indonesian President Joko Widodo had chosen Japan instead of China for the project. Still, residents of Bandung and Jakarta are happy with how the train turned out. Many hope it will boost the economy in the two cities even further.
Eric: You should check out Antonia’s video that this audio was taken from. It’s over on our YouTube channel. We have a link in the show notes. It’s really cool to see. It’s super modern. There’s a lot of excitement about it. There’s a lot of griping right now about the cost overruns and the delays. I don’t know. I’m not entirely convinced by that because number one, everything that was built before the pandemic got delayed after the pandemic. Number two, find me a railway project anywhere in the world that is delivered on budget. That just doesn’t happen. So, those two things, I don’t know, are sour grapes in my view. And then this question of, “Should Joko have gone with the Japanese?” Well, Cobus, as I have mentioned to you many, many times on this show, the Japanese-built subway that’s here in Ho Chi Minh City ground broke in 2012. We are now approaching 2024 — still no subway.
So, doesn’t mean that just because the Japanese do something that it’s going to be delivered on time, but it does show that there’s some vibrancy to the Belt & Road. And Cobus, as we’ve been talking about in a number of different discussions, the Belt & Road has evolved considerably away from these large-scale infrastructure projects in most parts of the world, namely in Africa and Latin America. But here in Southeast Asia and parts of Central Asia, there’s still a lot of talk about building big infrastructure projects. There’s the China-Thai high-speed railway. The conversations between Vietnamese Prime Minister Chinh and Chinese President Xi Jinping was also about building new railways.
And then also in Myanmar, there’s discussions now about building large railways for the Myanmar-China Economic Corridor, and then, of course, Pakistan in the Pakistan-China Economic Corridor as well. So lots of discussion here in Asia, but a very different tone than what we’re seeing in Africa today.
Cobus: Yes. I mean, in Africa, it seems, for the moment at least, that this kind of big project is over. And it was interesting there was a lot of discussion happening in Kenya and Uganda at the moment around expanding the standard gauge railway. And some of the officials are still saying like, “Well, it’ll be great if China could fund it,” but it seems like even they are now kind of acknowledging that that’s probably not going to happen. And they’re mostly talking to Turkey and other potential investors. But who knows what will happen in the future? But it is really interesting to see a different kind of space in Southeast Asia where it’s still happening and then to also see the kind of political impact that it has.
Eric: Well, last year we saw some data coming out of Boston University’s Global Development Policy Center that showed that the Belt & Road has also gone through some profound changes in the Americas as well. A lot of this big infrastructure spending that took place in the early parts of the BRI, that too has gone much like it has in Africa. However, there was a little bit of lending that took place in 2022 according to some of those numbers. That kind of ticked up again, about a half a billion dollars, most of it going to Brazil. But where we’re seeing a lot more activity is in the broader economic relationship in mining, in trade, in consumer trades, and whatnot, particularly in the major economies in South America.
And that is spawning an enormous amount of anxiety in Washington, D.C. And last week, there was a number of discussions going on in the U.S. Capitol about the Chinese presence in Latin America. The House Foreign Affairs Subcommittee on the Western Hemisphere held a hearing last week, and, Cobus, you’re going to love the title of this one — Communism on Our Doorstep: The Threat of China’s Malign Influence in Latin America. Sounds like a mystery thriller almost, doesn’t it?
Cobus: Yes. One from the ’80s.
Eric: That’s right. And let’s take a listen to the opening comments from the committee chairperson, Maria Elvira Salazar, who is a Republican congressperson from Florida who really set the tone for the type of discussion that they had in their hour-and-a-half hearing.
Rep. Maria Elvira Salazar: Today, I am here to announce that great powered competition is back in the Americas. The hammer and the sickle has returned in full force, and the Chinese Communist Party’s first order of business is to own Latin America — our backyard. Their playbook is accomplished in three ways — economically, militarily, and ideologically. Let’s go to the economic front. In the last 20 years, China has secured a presence in Latin America through what we could call a Trojan horse strategy to become the number one trading partner in our region. We have seen their tactics — low-quality goods, slave labor, securing critical infrastructure in exchange for access, and destroying the environment at every opportunity with no remorse. Let me repeat it — our hemisphere has been invaded by China.
Eric: Okay, well there’s equal amount of concern over on the other side of Capitol Hill. In the Senate, Utah’s Mike Lee, he recently toured the region and visited Panama, Argentina, and Columbia, and said he was taken aback by the breadth of the Chinese presence on the continent. And I guess for those folks who don’t pay as much attention to this, when they actually go down there and they see what’s going on, well, it is quite extensive. Now, he posted a video on his YouTube channel where he was interviewed by his communications director. And he said that he heard from local stakeholders in the region on all three of the countries that he visited that despite China’s formidable presence in the region, a lot of people still aren’t very happy with what Beijing is doing.
Mike Lee: Almost everywhere we visit, we heard reports of a lot of the infrastructure projects that have been contracted out with Chinese Communist Party-backed firms. In many instances, the work they produce is shoddy and the customer is displeased with the end product. But it’s a mixed bag. In Argentina and in Brazil, I found a lot less skepticism toward China. It shows, it shows with the amount of trade they’re doing with them, with the fact that many of these countries are purchasing weapons and otherwise engaging in incremental steps toward solidifying a long-term broader relationship with China.
Eric: Cobus, it’s so interesting to listen to this rhetoric because 10 years ago, this is what they were saying about Africa — labor, environmental destruction, shoddy infrastructure. Nobody’s talking about Africa anymore with the Chinese, but now they’re focusing all their attention south to the Americas.
Cobus: I mean, I would argue that those talking points were taken directly from Africa that the China-Africa discussion essentially set up the discussion template that’s now being used in relation to other parts of global south.
Eric: It really is a carbon copy. Well, we wanted to get a perspective on what’s going on in Latin America. It’s been a while since we’ve had a chance to talk about the Americas. Lots is happening there. And a few weeks ago I had the chance to speak with Bruno Binetti, who is a China foresight associate at LSE Ideas, also a Ph.D. candidate at the London School of Economics where he’s doing his research on China-America’s trading relationships. And also he’s a non-resident fellow at the Inter-American Dialogue. And after I talked to him, I said, you have got to come on the show. And I’m thrilled that he’s joining us tonight from Beijing where he’s doing research. A very good evening to you, Bruno. Thank you for staying up late, and we’re really excited to have a chance to speak with you.
Bruno Binetti: Thank you, guys. I’ve been listening to the podcast for many years. It’s been an inspiration for my own work, so the pleasure is all mine.
Eric: Wow, it’s wonderful to have you on the show, and thank you for that. And we’re glad to hear that you’ve enjoyed the show. Let’s talk about, before we get into your research and some of the discussions you’re having in Beijing, I’d like to get your reaction to some of those comments that came from Washington. And again, you speak to a lot of stakeholders in the Americas. I get the sense that when Mike Lee goes down to a place like Columbia and says, “What do you think of the Chinese?” And they basically say, “Mike, I know that you hate the Chinese, so I’m going to tell you that I don’t like the Chinese either.” And basically, I think there’s a lot of telling people what they want to hear. I think the reverse is true as well. I think when the Chinese roll up into town, they will say pretty things and blow rainbows up their booties too.
And I think that goes both ways. But tell me a little bit about your reaction to those comments and the rhetoric that you’re seeing in Washington because we can’t separate the great power competition from what China’s doing in the Americas.
Bruno: Yeah, I think you’re absolutely right. And it comes to who they talk to and what their interlocutors in the region think they want to hear, right? And I think some of the clips we were listening to are pure narrative and we can’t take them at face value because they’re not an attempt to understand what’s going on. It’s an attempt to sell a political narrative. And this is true of the United States with this sort of Cold War 2.0 communist threat rhetoric. It’s certainly true of the most, perhaps rosy, win-win narrative that comes out of China sometimes. The problem is that sometimes these political narratives affect policy. And that I think is the danger here is when U.S. officials, for instance, go to Latin America and start believing their own narrative. That’s when we have a problem because this is certainly a narrative that is not shared by most people in the region.
And this is not an ideological, exclusively ideological issue. You’ve seen center-right pro-market governments in Latin America trying to improve their trade, for instance, ties with China or trying to get investment from China. So, I think we face these challenge that it’s very hard to ignore these political narratives and, at the same time, we can’t let them sort of obscure what’s really going on in the region.
Cobus: So, following up on that point, what are some of the aspects that’s really going on in the region that you feel is being left out of some of those narratives?
Bruno: I think the key is assuming that economic ties with China are ideological in nature. And you might say that of countries such as Venezuela, but they’re an exception rather than the rule. Assuming that trading with China or welcoming investment from China is an ideological project is a huge mistake, and it actually makes it harder to talk to the region, because when that’s the mindset and it doesn’t really reflect what’s going on the ground in Latin America, then you actually miss opportunities. This is about pragmatism. And the response to China’s increased presence in Latin America has also got to be pragmatic and address the interests of Latin American societies and Latin American governments rather than try to make this an ideological crusade.
Eric: Well, let’s now flip the switch a little bit, and we heard what’s going on in Washington. What are you hearing in Beijing from people? Do you hear the same type of Cold War rhetoric that’s coming out, the hostility to the United States? Or are you hearing something different?
Bruno: No, I think China, since the beginning, since the early 2000s has been much more cautious, at least regarding Latin America. I think because China understands that Latin America, historically, has been an area of influence of the United States because it started from a very weak position, let’s say because Latin America doesn’t have a long history of intense economic relations with China. We don’t see that rhetoric coming out of China when it comes to Latin America. We’re seeing the exclusive either with China or with the U.S. narrative mostly comes from Washington. I think Chinese actors are much more cautious in that regard.
Cobus: And is there a similar kind of framing of the U.S. opposition to China in terms of trying to decouple from China in the world or trying to encircle China that we see sometimes referenced in foreign ministry statements, for example?
Bruno: What I’ve seen here, it’s mostly defensive in nature. I haven’t seen indication of a plan from China to decouple from the U.S. or from Western countries in general. I’ve seen efforts, of course, to adapt to U.S. restrictions. I have seen a lot of interest in preserving good ties with Europe, and Germany in particular has been a country of interest in the last couple of weeks in China. So, I really think, smartly, Chinese officials understand that embracing this sort of Cold War rhetoric would only bring more problems for a China that already has significant domestic problems. So, I don’t think this is a symmetrical confrontation in that regard. Of course, Chinese officials, academics, society are worried about growing hostility, let’s say with the United States. And of course, there are areas of disagreement, but I don’t see a sustained effort to cut ties.
On the contrary, I think China wants to preserve as many ties as possible with Western countries and Western institutions because that provides leverage and that provides an opportunity for China to continue to push its own interest, its own narrative in countries that are much closer to the U.S.
Eric: They may not want to cut ties, but I think the decoupling hasn’t only happened on the U.S. side. I mean, certainly, when you look in the Chinese tech industry, the era that Facebook and Google were pushed out of China, we also see the difficulty that American journalists have. There’s a lot of areas where China’s been pulling back. And I think it’s probably questionable to say that only the U.S. wants to decouple when China itself has initiated a number of nationalist policies that may not be framed as decoupling, but have the same effect in that respect.
Bruno: That’s crucial, I think. That’s crucial because I was focusing more on the framing of these things, and I think on the political side, you’re absolutely right. What I don’t think is that they are an attempt to separate or to isolate the Chinese economy from Western actors. I think you have a point in the sense of we’re seeing less and less foreign journalists in China. We’re seeing less context on the civil society. That’s definitely, I think you’re absolutely right on that regard. I think I see an interest from Chinese actors, perhaps, to preserve some key ties that might prove useful in the future. I think that’s my main point.
Eric: Yeah, that’s a fair point. Let’s dive into your research that you’re doing and what brings you to Beijing and what you’re doing for your Ph.D. at LSC. You’re looking at Chinese infrastructure diplomacy in particular. Now, this is very important, especially for our listeners who look at other parts of the world, namely Africa or Asia, where Chinese infrastructure diplomacy has been very active over the years. And one of the reasons why this show is so important is so that we can compare and contrast what’s happening in different regions because there is a lot of differences. We said, at the beginning of the show, big things are still happening out here in Asia, less so in other parts of the world. Now, you’re looking at three countries in particular — Ecuador, Argentina, and Brazil, and three specific projects in particular.
What are the differences among the various countries and the projects that you’re looking at? Because it’s not all the same. We can’t just look at the Americas or South America as one entity and the Chinese are using a one-size-fits-all approach to the region. Tell us a little bit about what your research is revealing in terms of the different approaches that the Chinese are taking in different countries.
Bruno: That’s right. So, I saw basically that this narrative about the China model really didn’t fit what was happening in Latin America. So, I focus on the hydropower sector and I take a look at three emblematic projects in the region. My main finding I think is that Chinese actors adapt to conditions in host countries. Now, a lot of people have been saying this — this is not new — I think we’ve been focusing too much on institutions. You’ve seen this many times, right? Countries with strong institutions can get more benefits from Chinese investment and Chinese infrastructure projects, and countries with weaker institutions just basically let the Chinese do whatever they want. And what I’m trying to prove is that it’s not just about institutions; that we really need to look at the politics and the relationship between governments in host countries and local businesses because that’s going to determine what role Chinese actors are going to assume in these projects.
And we see great variation throughout the region and different countries that are able to incorporate Chinese actors in certain parts of these projects and not in others. Brazil is the emblematic case. We have the Belo Monte Dam in the Amazon region. That was 100% Brazilian project. No foreign actors were involved because Brazil has the capacity to finance such a project. But when it came to building the transmission lines connecting this dam to Rio de Janeiro, 2,000 kilometers south, then they needed technology — ultra-high-voltage technology that China had. And that’s when they opened the public bid. Chinese companies participated, State Grid won, and they actually partnered up with the Brazilian electricity company to build the first Belo Monte line.
Now, the interesting part is this first transmission line in which State Grid had to partner up with the Brazilian electric company was done with Siemens technology because Brazil already had agreed that. And State Grid said, “Okay, yeah sure we can accept that.” But then when the second line was open for public bid and State Grid won, then they used Chinese technology. So we’re seeing this kind of long-term view of Chinese actors and how they adapt to local conditions in host countries to pursue their long-term interests. Now, in Argentina, we have a different model because Chinese companies there, to build the Néstor Kirchner and Cepernic dams in Patagonia, they have to partner up, but rather than get the contracts through an open bid, they get it by creating partnerships with local companies that were closed to the incumbent government.
This is very typical in Argentina. So, you have a sort of hybrid model in which you have some local actors involved, but they are highly politically connected. And when the government changed in Argentina in 2015, you have all sorts of problems between this consortium and the new Argentine government. And in Ecuador, you have the most typical kind of state-to-state deal. You have a loan from the China Exim Bank, you got Sino Hydro building, basically, the entire dam, the case is the Coca Codo Dam, virtually no involvement from the Ecuadorians, and they built the dam on time, they delivered it. And then you’ve had significant construction problems, and now you see that China and Ecuador involved in negotiations about what to do about the repairs and who’s going to pay basically to get this fixed. So, you see different models depending, but the key issue is conditions, politics in host countries.
Cobus: I was wondering how that then maps to environmental and social implementation. If one listens to the comments from the U.S. at the beginning, they were literally saying that China essentially destroys the environment on purpose, which is kind of funny as if Western companies don’t destroy the environment. But I was wondering kind of whether you saw any kind of contrast between how the environmental and social implementation shook out in these different contexts.
Bruno: It’s interesting. I think, to start, not to say that Chinese actors in South America are perfect or amazing, a lot of these problems have to do with large-scale infrastructure projects in general. So, if you are building this, you are going to face both problems, environmental repercussions and problems with communities living where the dams or the transmission lines are being built. Right? And actually, I chose hydropower because it allowed me to compare what Chinese companies are doing now and what Western companies and Western financial institutions were doing in the 1970s and ’80s when Latin America developed their first hydropower dams. And you see very similar situations. You can read the reports of the World Bank that financed some of these large-scale dams in the ’70s and ’80s. And their assessment of what went wrong with some of these projects, you could take now and it would be almost the exact same thing you’re seeing in some of the China-built projects.
So, I think the first issue is to understand that large-scale infrastructure, almost unavoidably, leads to these problems. Then, of course, again, it comes to local politics and local institutional setups to determine whether environmental concerns, civil society mobilizations actually get to influence policy. In the case of Ecuador, going back to my own research, in the case of Ecuador, you really see that all institutional paths are sort of blocked. The government was in control, they pushed ahead with this project and there was nothing that could stop it. In Argentina, it’s a different situation. The Supreme Court, which is relatively independent, intervened, forced the government to do a public hearing to listen to environmental concerns. Ultimately, the government went back to the Chinese consortium and changed the project to minimize the potential environmental impact.
And in Brazil, you have a very strong independent environmental agency. And I’ve talked to some of the managers of these projects from State Grid, and they will tell me, “We spent months and months in Brasilia negotiating where these transmission lines would go to try to minimize environmental impact.” And this was mostly for the first transmission line. And then by the time State Grid won the contract to build the second one, they already knew what to do so the process was much smoother. So you see, it really depends on the host country.
Eric: And beyond the environmental considerations, other areas of risk, and the environmental considerations clearly are risk if it’s taking them months and months to negotiate some of these aspects of the deals, but risk is a very interesting consideration now because a lot of Chinese companies, not only in the Americas but in Africa and elsewhere, have a much lower tolerance for that kind of risk. Chinese lenders as well are saying, “You know what, we don’t want to be the only ones putting ourselves out there.” In the old days, they would put out what? These multi-billion-dollar loans, Sinosure would back them, and there you go. Now they’re saying they want either host companies or host governments to take on more of that risk and even more of their own companies to take on more of the risks so that the Chinese government, and the policy banks in particular, are not left holding the bag. Talk to us a little bit about the shifts that you’ve seen in your research related to risk sharing.
Bruno: That’s absolutely true. The typical model would be a loan from a Chinese development bank to the host country’s government, which means that the Chinese contractors would get paid either way, right? All the risk, if the host country defaults, would be on the Chinese banks. So what we’re seeing now, as you’ve mentioned in the podcast many times, is we’re seeing a shift towards more businesslike thinking by Chinese actors. These long-term, big politically driven projects are probably a thing of the past. And we’re seeing Chinese banks in particular telling Chinese corporations and contractors, “Hey, you see host countries with levels of sovereign debt that are already too high. And until now, you, contractors, have been paid either way.” I mean, many times the money doesn’t even leave China, right? It just moves bank accounts from the development bank to the contractor.
“Well, now it’s time for you to assume more of the risk.” So, maybe part of the loan would go to the sovereign country, to the host country, and part of the loan would be taken by the construction itself. That’s a new model that’s being discussed. Of course, you see broader changes in the BRI narrative. I’ve been following closely, actually, how Chinese television is covering the 10 years of the BRI. And it’s been very interesting to see that there’s been really a lot of shows and segments on how the BRI, of course, has improved lives in many countries in the global south, etc. But it’s been very interesting to see that the time they devote to infrastructure connectivity — railways, ports — is almost the same as to softer development initiatives such as wildlife conservation, education, culture.
So, you really see this sort of change in the narrative about what the BRI means. As you know, the BRI is a very flexible kind of umbrella concept that is not connected to a specific set of policies. It’s more of a foreign policy narrative than an actual policy. But it’s very interesting to see how the emphasis is shifting towards softer development issues closer to what we see actually what we’re used to seeing from the World Bank or traditionally Western-backed institutions.
Eric: Cobus, this is a really, really important point that is evident that a lot of people in Washington don’t understand. Clearly, those folks on the House Foreign Affairs Committee don’t get it. We also have been talking to a lot of stakeholders in Africa and they, too, have not understand this important shift that’s taken place that risk sharing is now in vogue. The small is beautiful is now the operating principle. ESG, those environmental sustainability goals are also very important. I don’t get the sense that people are keeping up with these changes, and it’s really one of my biggest frustrations. What are you seeing?
Cobus: I think, to a certain extent, yeah, I completely agree. And I think it’s been interesting to see how slow everyone has been around the world to pick up on the changes. Obviously, people don’t necessarily follow, they’re not necessarily so interested in these changes as we are, but it’s also, I think, to a large extent, they’re kind of shorter, and China equals infrastructure. That kind of thinking has been such a defining framing, I think, for everyone that I think a lot of people are kind of unwilling to move on from it because I think it serves a lot of local needs in different kinds of ways, including the local need to be able to scare everyone as one sees in Washington.
Eric: Well, I guess, and if it took 20 years to build up this narrative, it’s not going to unwind in 12 months.
Cobus: There’s that. I think it’s also, in Western societies particularly, I think they’re so used to thinking of themselves as the benevolent developmentalists that it’s very difficult for them to frame China in that space. Because A, it’s just not how they’re used to thinking about China. It certainly doesn’t serve Chinese and narratives about China for them at the moment. But also, that would have to then admit that there’s a different way or different, like a Chinese way of thinking about this — these kind of traditional developmental priorities, which is opening another set of issues that many of them probably are not particularly interested in opening. But now, I was wondering from your perspective in speaking to Latin American stakeholders, do you see greater awareness of these issues, and how is China’s role as a development partner both in terms of the classical infrastructure building, but also in these new more developmentalist ways, how is it framed when there aren’t Western stakeholders in the room, like when there isn’t the need to make one’s message fit into a Washington frame or a Beijing frame? When it is simply South American speaking among themselves, how does the framing shift then?
Bruno: That’s an interesting question. I think to summarize that I would point to a provincial governor in a Latin American country was talking about a solar project that they hired with a Chinese company. And he said something like, “If I had negotiated this with the Americans, I would still be negotiating. I talked to the Chinese and, in two years, there it is, and we cut the ribbon and the solar plant is right there.” And I think that’s the pragmatism that I emphasized when we were talking before. This is a provincial governor of a conservative province. This is not a guy that’s ideologically aligned with China, but this is the sort of thing that makes Latin American politicians go to China. Now, some of these large-scale projects seem to be over, but that doesn’t mean that China is completely out of the infrastructure sector in Latin America. We see massive interest in solar energy, wind farms.
We see that when the project makes sense economically, when it benefits other Chinese corporations, when it benefits China’s accessing critical natural resources, then Chinese actors are still willing to finance infrastructure. But what we’re seeing, I think, is a sort of learning process in which Chinese actors are no longer willing to finance white elephants. It’s funny because if you see it from the United States perspective, the rhetoric is that China actively sort of pushes these white elephants to generate debt and to control host countries when actually it’s the exact opposite. Chinese corporations usually went along with these to make host governments happy and get other concessions from them. So, definitely I would say these sort of large-scale infrastructure projects are over. And then one more thing, going back to the beginning of your conversation, I think, from the Chinese perspective, the global south is seen as sort of concentric circles.
At the core, of course, is China itself, then you have Southeast Asia. All of the projects you were mentioning that are still active in infrastructure connectivity actually connect neighboring countries to China, and that will continue. But then in the other rings, you have Africa and Latin America, which, of course, are too far away from China. And those are the regions I think in which Chinese stakeholders are going to be much stricter about which projects they pursue.
Eric: We’ve heard over and over again from global south countries, including those in the Americas, that they don’t want to be caught in the middle of a new great power competition, another cold war between the U.S. and China. However, when you look at the politics and the remarks of leaders in Ecuador, Brazil, and Argentina, it really doesn’t seem that way. I mean, President Alberto Fernandez in Argentina seems to have wholly embraced China in many ways and really become quite aggressive towards the United States in his rhetoric. Lula in Brazil is doing the same thing. It doesn’t feel like they’re being equal to both sides. They feel like they’re being much more partisan in favor of China. We saw this rhetoric coming after the Argentinians were accepted as the newest BRICS member. And that’s something I know you wrote about for us in a column.
And I’d like to get your take on this in terms of where they’re leaning in terms of the great power competition and, specifically for Argentina, what it means now to be a part of the BRICS, which is not a distinctly Chinese organization, but it’s certainly a heavily influenced organization by China and it very much aligns with a Chinese worldview in that respect. So, talk to us a little bit about Argentina, the BRICS, and the great power competition.
Bruno: So to start, I would first address the issue of the rhetoric of Latin American leaders because I think that’s a great point. Latin America has been polarized for decades. This is not new. If anything, the world has become more Latin American in recent times. And you see a sort of presidents taking over wanting to break from their predecessors’ foreign policy and sort of exaggerating either their pro-us or pro-China stance. Now, in the case of Lula in Brazil, I think Lula knows that he can afford to basically say whatever he wants about not using the U.S. dollar and align with China, etc. because he knows that when he goes to Washington the administration is still going to be interested in talking with him. And we saw this when Lula visited Washington and was welcomed by President Biden as a sort of friend.
In other countries in Latin America, I think these excessive rhetoric is actually hurting their own interests. And, as you point out, it sort of contradicts this idea that Latin America doesn’t want to be involved in a second Cold War. Now, going to the BRICS decision, it was certainly a surprise, even in Argentina to be invited. It was mostly due to Lula himself. There were, particularly China was pushing for the expansion of BRICS. China probably sees BRICS as a sort of platform to improve its standing on the global south, sort of alternative to the G7, and it wanted to expand and include countries, particularly in the Middle East, an area in which Chinese diplomacy, as you know, has been much more active in recent times. And Lula wanted an ally on the table, wanted to incorporate someone from South America, and he has good ties with the Argentine government.
So, he proposed Argentina and it was approved. Now, the issue for Argentina is Argentina is involved in very delicate debt discussions with the International Monetary Fund. So, Argentina needs the United States. We’ve actually seen, in recent weeks, members of the Biden administration urging the IMF to stop granting Argentina sort of waivers and to be tougher with Argentina when it comes to its economic policies. So, Argentina is in a very delicate situation, and also it’s going through a presidential campaign. There’s an election in late October. And two of the three main candidates say that they would reject entering the BRICS. So, it’s a very interesting place or a very interesting moment for Argentina to get this invitation. The economy is in ruins, inflation is over 140%, it’s in the middle of a presidential campaign. So, really it comes at a very bad time for Argentina, and we’ll see, depending on who wins, whether Argentina would actually accept this invitation or not in January 2024.
Cobus: We are seeing this very stark rhetoric coming out of the U.S. And at the same time, we are also seeing increasing rhetoric, particularly from Brazil, in support of non-alignment. Historically, a lot of thinking around nonalignment came out of Latin America, and there seems to be a kind of resurgence of that thinking around that movement again out of Latin America now. So, I was wondering how you see Latin America’s future in a kind of a new Cold War and in a conversation around global south nonalignment developing over the next while.
Bruno: That’s a very good question, and going back to your initial comment, Cobus, about how the rhetoric coming out of the U.S. seemed like from the 1980s, well, a lot of the leaders of the Latin American left were already active politicians during the last stages of the Cold War, including Lula, of course. And for the Latin American left, imperialism equals the United States. And I think what you see in younger generations in the left and the right is an understanding that excessive dependency on China or on the U.S. can be equally damaging for their country’s long-term interests. In fact, I think the political debate in Latin America about China is becoming much more tense. You see China, for the first time, being introduced as an issue in some political campaigns, including in Argentina with this libertarian candidate saying that he doesn’t do business with communists.
And he said that, well, if the private sector wants to do businesses with China, that’s fine, but if he becomes president, he won’t pursue that relationship. You are seeing a sort of politicization of Chinese presence that wasn’t there before. So, I think in the near future, you’re going to see much more debate around Chinese presence or you’re going to see that, as this old left retires, perhaps, you will get more balanced rhetoric regarding threats from both the United States and from China, hopefully, or you will get people using either the U.S. or Chinese presence to score political goals.
Eric: And I just want to make sure we don’t leave the impression that the shrill toxic discourse is only coming from the United States. Anybody who studies the discourse in China among scholars and in the nationalist media and online will also know that an enormous amount of bile is coming out of the Chinese as well. And so, this is really going in both directions. So, I just want to make sure that that this isn’t seen as just a one-sided type of discourse that’s going on there. I mean, it’s really quite discouraging when you actually read some of the academic discourse too, which you would think would be a little more sanguine. But oftentimes, and we do a lot of translations, it’s alarming to see how, again, hostile and toxic it is, and just shows you where we are today in this geopolitical relationship between the U.S. and China.
Bruno: Absolutely. And I think the issue here is that we are exposed to U.S. rhetoric and U.S. analysis all the time, while in the case of China, as you said, you had to translate it, we’re less exposed to that sort of nationalist rhetoric just because of the barriers and how hard it is sometimes to be in touch with Chinese sources. But that’s absolutely right. That’s a good point.
Eric: Another good reason to subscribe to the China Global South Project. Well, there you go. And so Bruno, thank you so much for taking the time to join us. Your research is fascinating. We really enjoyed the conversation. Bruno Binetti is a China Foresight Associate at LSC Ideas. He’s also a Ph.D. candidate at the London School of Economics and a non-resident fellow at the Inter-American Dialogue. Bruno, if people want to follow what you’re reading and writing in your adventures in China, where can they catch up with you on social media?
Bruno: So, when I’m not in China, they can follow me on Twitter, X, BinettiBruno, B-I-N-E-T-T-I-B-R-U-N-O — same handle on LinkedIn. Thank you guys. It’s been a pleasure.
Eric: Hey, it’s been our pleasure. Thank you. And we’ll put links to both Bruno’s X account as well as his LinkedIn in the show notes. Bruno Binetti, thank you so much for taking the time this evening to join us.
Bruno: Thank you so much.
Eric: Cobus, throughout our discussion with Bruno, I was really looking forward to asking you how much of what Bruno is saying resonated with you about what’s going on in Africa as well. And particularly that part where he said about Lula, that Lula can basically say whatever he wants because when he shows up in Washington, he still gets treated well. And I think about that with your president, Cyril Ramaphosa, who is constantly kind of berating the U.S., and then, at the same time, is welcomed in Washington with all the honors and everything like that. So, there really doesn’t seem to be any price that’s paid in all of this to crap on the U.S., and you can say nice things about China, and the U.S. is still kind of going to be there to greet you. I don’t know if that’s a good thing or a bad thing. It just seemed to resonate to me that a lot of what’s happening in Latin America, the dynamics of the politics, the way that countries are aligning and engaging China seem to mirror a lot of what’s happening in Africa as well.
Cobus: Well, I think it’s maybe not true for all African countries, but it is kind of true for South Africa, but I think less true than it is for Brazil. Brazil is just such a huge economy, such a huge regional factor that it’s essentially, everyone is always going to want to be friends with Brazil. I think South Africa kidded itself that it is in a similar position and then I think ran into the limits of that around the issues around engaging with Russia a little too much and the fights that then picked with the U.S. But I think, to a certain extent, it still is a little bit true for South Africa too, in the sense that South Africa is a pivotal power in southern Africa. It will be for a long time. It’s easier for the U.S. to deal with than other pivotal powers in southern Africa.
For that reason, the relationship can take a certain amount of vinegar from the South African side, and they tend to deploy it frequently in order to make themselves look good, in order to make themselves look as part of a global progressive movement or as kind of speaking truth to power, and so on. I think the other side of that is that A, it reveals, as you say, it reveals a certain flexibility in the U.S.-global south relationship, where you can say all these things about the U.S. and the U.S. will like be like, “Okay,” and then pull them back into the fold, which you can’t do with China. Once you say those things about China, it’s on your permanent record. There’s no going back unless there’s a change of government.
That’s one thing. But I think the other thing that it also reveals is that to such a large extent, and this is true particularly I think for, in the case of Lula, a lot of people in power in South Africa were similarly young leftists already politicians during the 1980s. But South Africa has a more radical version of that, which is that those people were also fully engaged in a full-on militarized liberation struggle. So, their positions were, I think, were even more, or their reality was even more extreme. And it was a moment when the Reagan administration was very much in league with apartheid South Africa. For as long as they could hold out, they were supporting apartheid.
In that sense, it still is a situation where this the rhetoric everyone feels comfortable in. So, it’s a comfort zone for them. And to a certain extent, it’s a comfort zone for the U.S. as well. It’s funny for me to see how U.S. stakeholders just flipped back into 1980s discourse just seamlessly. But I think what it also reveals on the side of the global south stakeholders is that to which extent the U.S. is still really shaping the kind of mental horizon within which they’re working in a way that China really isn’t. China is this kind of additional factors, kind of wild card that they have to deal with and they have to placate and they have to work with in certain ways. But China isn’t shaping their worldview in the way that the U.S. is, in the way that the U.S. provides this kind of neat left-right split that they can kind of organize themselves around. China, I think, is a much more disruptive factor, they know a lot less about it.
And in that sense, even though the rancor that is in the relationship with the U.S. is actually, in a weird way, cover for the comfort that’s in the relationship with the U.S. Everyone kind of knows each other and then knows each other’s limits roughly. I think in lots of ways what it actually reveals is that China probably makes these policymakers a lot more nervous.
Eric: I was talking to a Chinese journalist today and I was telling him that we were going to do this show, and he kind of came back, and he’s like, “Why is the U.S. so sensitive on Latin America?” And he said, “More than other regions,” he noticed this, which was very interesting. More than almost any other region in the world that the United States, you get that rhetoric we heard from the House Foreign Affairs Committee and from Senator Lee as well. Again, that’s a different type of rhetoric. Again, it’s drawn from Africa, but there’s an intensity to it in the Americas that’s different. And I tried to explain this concept of the Monroe Doctrine, and I think this is really important, even though the Monroe Doctrine is not policy anymore, but that says that no outside power should come into the Western hemisphere.
And it was born during the British imperial era and that the United States kicked out the Brits from the Western hemisphere, and the Caribbean in specific. And it’s a very important point that the Chinese understand. Now, I don’t know how much the Chinese understand about this, I don’t even know if they care about it, but they are going to trigger much more passionate responses from the Americans in the Americas than they are going to be anywhere else in the world. And it’s in part because the Americans still believe that Latin and South America and the Caribbean are their traditional sphere of influence. And somehow, I don’t know what the Americans are thinking they’re going to do about it because I don’t think they can do anything to affect Ecuador or Brazil’s or Argentina’s foreign policy, or any other country. But you at least see the anxiety in Washington about this, and I expect this to be a campaign issue coming up in the presidential election that’s going to take place starting next year, that they’re going to talk about this a lot.
Marco Rubio, the senator from Florida, has been talking about it a ton. And so it is going to be a fight. I mean, there’s no doubt about it. Now we get to the question of what can the Americans actually do. And I wrote earlier this week in our newsletter how there is this new, more sober reality that seems to be settling into North American and European governments about their options and their ability to affect the outcomes of the critical battery and the critical minerals race are now dawning on them that there’s not much they can do. They’re too far behind. They really can’t catch up. They may be able to catch up a little bit on the mining, but then they won’t be able to catch up on the processing. And then if they catch up on the processing, which they can’t, then they won’t be able to catch up on the manufacturing side.
And then if they do that, then the costs are just going to be so high that the Chinese are so competitive and the Chinese are moving so fast to spread their production around. And there’s this kind of sobering reality setting in that, “Damn, we can’t do anything about it.” Jose Fernandez, the Under Secretary of State for the United States, even said, “We’re going to have to get used to living with the Chinese when it comes to battery metals.” So I wonder now if, kind of pulling this whole rant full circle here, despite the anxiety in Washington, is there going to be that same type of realization that comes up and that says, “Really, there’s not much we can do. We can’t really compete with the Chinese. We don’t have the market to absorb the imports the way that the Chinese are doing. We’re not manufacturing the way the Chinese do. We don’t want to do regional free trade agreements or even bilateral free trade agreements.” Because free trade is not a politically popular topic in the United States. So, what are you going to do? So, I just wondered now if we’re getting into an era where it’s just rhetoric and they bloviate, and that’s about it.
Cobus: Well, that may be the situation. From the position of someone who grew up in the global south, whose world horizon or shaped in the global south, my reaction is, well, boo-hoo. Who cares? Because in the end, it’s like the much more fundamental thing for me is, is it still going to be a situation where the global south is just one big mining camp surrounded by a sea of poverty and a bunch of rich people in some other place. Whether that other place is China or the U.S. or both, right? As long as that’s the situation, I don’t care about who controls critical minerals in the world. But really, I don’t care. As long as that’s the base situation we’re talking about, as long as it still is a situation of just like wealth transfer from the south to the north, then I don’t care because then it’s just a perpetuation of the old thing.
I think the only place where this horse race around these issues become interesting for me is to the extent where global south countries can make it work for them and where they can extract leverage more. And it seems like that anxiety around these issues in the U.S. is useful in that respect. We covered a great new report by Carnegie Endowment for Global Peace today in which they were laying out the particular kinds of ways that the U.S. could engage with boosting battery manufacturing in Africa, for example, when the different investment mechanisms and laws and so on that already set up to enable that. If that is where it goes, great. And we can find a way in which these countries are not destroyed in the process, then that helps. If it’s just going to be a situation of like, “Oh, who can compete hardest to get the raw minerals out in the hypodermic needle extraction model in order to then build stuff elsewhere,” then it’s just the old thing over again.
Eric: Well, let’s not forget that the Biden administration’s first PGII Initiative is a mine-to-port railway in Angola. So, do with that as you will in terms of whether which direction that’s going.
Cobus: Yes. While the Chinese are already busy setting up lithium refining factories in Zimbabwe.
Eric: There you go. So, it’s one step ahead.
Cobus: Zimbabwe, who’s been under sanctions and remains under sanctions and sanction status, essentially keeping the entire sub-Saharan region back, that is still happening. So, let’s see how it goes. But I mean, the default idea of like, “Oh, they’re working with China i.e., bad, and oh they’re working with the U.S., i.e., good,” I mean that needs to be let go, I think. That’s too simplistic, I think.
Eric: Yeah, that’s kind of old thinking. We’ve said this before, and we’ll say it again, that the Americas is, in many ways, one of the sleeper regions for the Chinese. They’re doing almost three times as much trade with the Americas as they are with Africa today. It is not only a region where they extract, but it’s also a major destination for Chinese e-commerce companies, ByteDance, Alibaba, Tencent are all super active in Brazil. It’s a huge market for Chinese cars. And so a lot is happening in the China-Latin America-Caribbean relationship. It is one of the most dynamic and interesting parts of the China global south relationship. It’s one that we follow very closely and so excited that Bruno was able to join us. We’ve got some other interviews on the site. Pepe Zhang from the Atlantic Council, we did a show with him earlier this year, also Margaret Myers from the Inter-American Dialogue, we’ve spoken to her a number of times — those are all on the site.
And if you’d like full access to everything that we’re doing, including the transcript of today’s show; also we’ve got some fascinating new research reports that are coming out. And Cobus, next year, is going to be transitioning to doing more research. And that’s going to be only available to our subscribers. And if you want to get all of that great stuff, go to chinaglobalsouth.com/subscribe. You will be supporting the work that Cobus, and Njenga and Geraud, and Jony, and all of us are doing at the China Global South Project to bring you this information as an independent nonpartisan media organization. Not an easy space to be in this day and age. So, we do appreciate all of your support and all of the amazing support from our Patreon supporters who donate to us.
And we just, again, couldn’t do this without you, so thank you so much. Once again, chinaglobalsouth.com/subscribe. If you are a teacher or a student, send me an email, eric@chinaglobalsouth.com, E-R-I-C, and I will send you discount links for 50% off your subscription. So, that is an offer you don’t want to miss if you are a teacher or student. Make sure to send me using your academic email address. So, we’re going to leave it there. Cobus and I will be back again next week with another edition of the China Global South Podcast. For Cobus van Staden in Berlin, I’m Eric Olander in Ho Chi Minh City, we’ll be back again next week — thank you so much for listening.
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