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The Strategic Dimension of Chinese Engagement with Latin America

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The Strategic Dimension of Chinese Engagement with Latin America ISSN 2330-9296 Perry Paper Series, no. 1 The Strategic Dimension of Chinese Engagement with Latin America R. Evan Ellis William J. Perry Center for Hemispheric Defense Studies 2013 The opinions, conclusions, and recommendations expressed or implied in this paper do not necessarily reflect those of Dr. William J. Perry, the Perry Center, or the US Depart- ment of Defense. Book Design: Patricia Kehoe Cover Design: Vitmary (Vivian) Rodriguez CONTENTS FOREWORD V PREFACE VII CHAPTER ONE Introduction 1 CHAPTER TWO The Impact of China on the Region 11 CHAPTER THREE The Question of Chinese Soft Power 33 CHAPTER FOUR Chinese Commercial Activities in Strategic Sectors 51 CHAPTER FIVE The PRC–Latin America Military Relationship 85 CHAPTER SIX China–Latin America Organized Crime Ties 117 CHAPTER SEVEN A “Strategic Triangle” between the PRC, the US, and Latin America? 135 CHAPTER EIGHT The Way Forward 153 FOREWORD With the publication of this volume, the William J. Perry Center for Hemi- spheric Defense Studies presents the first of the Perry Papers, a series of stim- ulating thought pieces on timely security and defense topics of global propor- tions from a regional perspective. The Perry Papers honor the 19th Secretary of Defense, Dr. William J. Perry, whose vision serves as the foundation for the first three of the five current regional security studies centers. Dr. Perry has espoused the belief that education “provides the basis for partner nations’ establishing and building enhanced relations based on mutual re- spect and understanding, leading to confidence, collaboration, and cooperation.” The faculty and staff of the Perry Center believe strongly in the same princi- ples. “Mens et fides mutua,” the Latin phrase that means “understanding and mutual trust,” serves as the motto for the Perry Center and motivates all that we do. This paper series will form an important part of our effort to assist and strengthen the regional capacity for cooperation and collaboration on a global scale. The emergence of China as a prominent actor in the Western Hemi- sphere has given rise to many different interpretations and prescriptions. The Perry Center inaugurates this new series with an insightful and wide-reaching collection of studies by Dr. R. Evan Ellis, focusing on China’s growing influence and interaction in the Western Hemisphere and what it means for the future geo- politics of our region. In The Strategic Dimension of Chinese Engagement with Latin America, Dr. Ellis, one of the foremost experts on China and Latin America and a professor of National Security at the Perry Center, provides in-depth analyses of a variety of aspects of China’s ventures in the hemisphere. We welcome your comments and observations on this work. Kenneth LaPlante Perry Center Acting Director v PREFACE For almost a decade, my career has been defined by following, writing about, and speaking in public forums on the expanding engagement by the People’s Repub- lic of China with Latin America. While there has been a flowering of scholarly works on the economic and political dimensions of this engagement,1 its impact on the strategic environment of the region has remained an open question. There is certainly no shortage of works that assert that “Red China” is a threat2 or, alter- natively, that the PRC is merely pursuing “win-win” relationships in the region, guided by the five principles of peaceful coexistence,3 and of no threat to any- one. Whatever the merits of these individual works, there is almost no scholarly literature analyzing in detail the “strategic” dimension of PRC engagement with Latin America. Nor is there clarity regarding what the “strategic” dimension of that engagement actually is. The present work is designed to fill that void. It brings together in one place essays on those aspects of the expanding PRC engagement with the region relevant to scholars who study issues of defense and security in Latin America, including chapters on how engagement with the PRC is impacting political dy- namics within and between states in the region; the question of Chinese “soft power”; activities by Chinese companies and the Chinese government in strate- gic technology sectors; military-to-military engagement; emerging trans-Pacific organized crime ties; and the question of whether the web of relationships be- tween the US, the PRC, and the countries in the region should be characterized as a “strategic triangle.” Although versions of many of these works have been published previously, the present volume updates, extends, and integrates them, as well as provides new material. The objective of this work is not to argue whether PRC engagement with Latin America is, on balance, positive or negative, but rather to serve as a reference for scholars and practitioners interested in both the security and de- fense of Latin America and the impact of the “rise of China” on the global order more broadly. I would like to acknowledge and thank the William J. Perry Center for Hemispheric Defense Studies (CHDS) for providing the time and resources to bring this work to fruition. I would also like to thank Dr. Howard Wiarda for his mentorship in this process, and for encouraging me to find the time to complete this work. I would like to specially thank the CHDS interns who made import- vii viii The Strategic Dimension of Chinese Engagement with Latin America ant contributions to the research and editing of this volume—in particular, Eric Skidmore, Karinne Smolenyak, and Florian Decludt. The opinions expressed in this work are mine alone, and in no way re- flect the position of Dr. William J. Perry, the Perry Center, the National Defense University, or the US government. Notes 1 The first two comprehensive works on the topic came out in 2006: A. Catalinac, S. Cesarin, J. Corrales, J. Domínguez, S.R. Golob, A. Kennedy, A. Liebman, M. Musac- chio-Farias, J. Resende-Santos, and R. Russell, China’s Relations with Latin America: Shared Gains, Asymmetric Hopes, China Working Paper (Washington DC: Inter-American Dialogue, 2006). See also Florencia Jubany and Daniel Poon, “Recent Chinese Engagement in Latin America,” Canadian Foundation for the Americas, March 2006. Some of the most important works put out during this point in time were also studies done by the International Mon- etary Fund and the World Bank. See, for example, Daniel Lederman, Marcelo Olarrega, and Guillermo E. Perry, “China’s and India’s Challenge to Latin America: Opportunity or Threat?” World Bank, 2009. See also Caroline Freund and Caglar Ozden “The Effect of China’s Exports on Latin American Trade with the World,” World Bank. See also “Latin America and the Caribbean’s Response to the Growth of China and India: Overview of Research Findings and Policy Implications,” World Bank, August 2006. Important eco- nomic analyses also include Kevin Gallagher and Roberto Porzecanski, The Dragon in the Room (Stanford: Stanford University Press, 2010). See also Rhys Jenkins and Enrique Dussel Peters, China and Latin America: Economic Relations in the 21st Century (Bonn: German Development Institute, 2009). In addition, a number of compiled volumes have emerged on the topic since 2009 focused on a mixture of economic and political themes. See, for example, Cynthia J. Arnson, Mark Mohr, Riordan Roett, and Jessica Varat, eds., Enter the Dragon? China’s Presence in Latin America (Washington DC: Woodrow Wilson International Center for Scholars, 2007). See also Riordan Roett and Guadalupe Paz, China’s Expansion into the Western Hemisphere: Implications for Latin America and the United States (Washington, DC: The Brookings Institution, 2008). See also A. H. Hearn and José Luis León Marquez, eds., China Engages Latin America: Tracing the Trajectory (Boulder: Lynne Rienner Publishers, 2011). See also Gastón Fornés and Alan Butt Philip, The China-Latin America Axis: Emerging Markets and the Future of Globalisation (London: Palgrave Macmillan, 2012). See also Cai Tongchang, Liu Weiguang, and Wu Baiyi, China–Latin America Relations: Review and Analysis, vol.1 (Reading: Paths International, 2012). See also Julia C. Strauss and Ariel C. Armony, eds., From the Great Wall to the New World: China and Latin America in the 21st Century (Cam- bridge: Cambridge University Press, 2012). See also K.C. Fung and A. Garcia-Herrero, Sino-Latin American Economic Relations (New York: Routledge, 2012). 2 See, for example, Steven Mufson, “In Panama: Ports in a Storm; GOP Critics Decry Hong Kong Firm’s Role at Each End of Canal,” Washington Post. December 8, 1999. See also Manuel Cereijo, “Inside Bejucal Base in Cuba: A Real Threat,” The Americano, August 27, 2010. 3 “China’s Policy Paper on Latin America and the Caribbean (full text),” Government of the People’s Republic of China, November 2008. Chapter 1 INTRODUCTION Overview What are the strategic implications of China’s engagement with Latin America for the US and for the region? The question was perhaps first elevated to the attention of senior US govern- ment officials and political leaders with the January 1997 award to the Chinese firm Hutchison-Whampoa of a 25-year renewable concession to operate con- tainer shipping terminals on both the Atlantic and Pacific sides of the Panama Canal.1 Although this storm passed in terms of political and media attention, the issue again came to the forefront in 2004 with the five-nation trip of Chi- nese President Hu Jintao to Latin America in conjunction with the Asia Pacific Economic Cooperation (APEC) leaders’ summit in Santiago, Chile. President Hu’s trip
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