It’s no secret that China’s influence has rapidly grown in Latin America and the Caribbean. Since 2005, both the China Development Bank and China Export-Import Bank have provided more than $141 billion in loan commitments to the region—with most of the money going to countries like Venezuela ($67.2 billion), Brazil ($28.9 billion) and Ecuador ($18.4 billion).
China has taken advantage of the decline in U.S. leadership and through economic incentives has managed to establish diplomatic relations with countries who had formerly recognized Taiwan as an independent country. But even as the Trump administration calls on Latin America to end their relations with China to escape its “predatory lending” and “debt-trap diplomacy,” as pointed out by Benjamin Gedan and Emma Sarfity, countries in the region—like Argentina—aren’t listening. In fact, in several countries across the region, such as Peru, China is now more popular than the United States.
But even with these big investments and dreams of exponential economic growth, China has not entirely fulfilled its promises, most notably, its track record of unfinished expensive infrastructure projects in the region. Additionally, the topic of Sino-American relations remains understudied. As Jessica Ludwig points out, China’s interests in the region remain principally considered economic. Often overshadowed by prospective benefits, the overall effect of these partnerships on the region’s development prospects is often mixed. There’s evidence that China relies on opacity, controlled access, and manipulative discourse to limit the space for discussion about China in the region—posing a serious risk to the integrity of the information environment in Latin America.
The anticipation by Latin American and Caribbean countries of potential economic benefits has led to a troubling degree of opacity in the negotiation and signing of many agreements between China and Latin America, a practice known as “corrosive capital,” a term used to describe the effect on democratic institutions and private enterprise that capital received from authoritarian countries has on recipient nations.
Examples of this can be seen in agreements signed by Argentina and El Salvador. In 2012, Argentina signed an agreement to allow the Chinese People’s Liberation Army to operate a satellite station without any formal mechanism for government oversight, and in 2018, after El Salvador formally recognized China, it set aside 14 percent of the country’s territory for a special economic zone that would essentially provide Chinese companies preferential tax exemption benefits.