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If You Can’t Beat Them, Join Them: The U.S. and China in Latin America

While U.S. relations with Latin America have been stagnant—and slightly strained—in recent decades, China has made significant inroads in the Western Hemisphere. China is now the largest creditor to Latin America and the region’s second-largest trading partner, only behind the United States. Since the turn of the century, China has aggressively approached Latin America with trade, investments, infrastructure development, and other commercial activities. Today, China is filling the void that the United States has left behind and now stands as an alternative to the United States. With its almost 400 state-owned companies, China has made itself a much-needed economic partner to Latin America—for better or for worse.

China’s growing economic involvement in “America’s Backyard” deserves attention from U.S. policymakers. China’s economic endeavors in Latin America are not only harmful to the environment, locals, and the development of Latin America as a whole, but also will increase China’s geopolitical influence on the region, prolong corruption, and weaken democracy—which all threaten U.S. interests. China is challenging U.S. influence in the region and gaining a strategic foothold in Latin America through economic means. To adequately address this issue and halt the negative implications on U.S. national interest and Latin American development, the United States needs to take a new approach to its policy towards a rising China in Latin America.

Indeed, the United States needs to deepen its economic ties with Latin America to reassert its influence in the region. However, gone are the days of the United States being the uncontested global leader. And just as unattainable is the United States succeeding in pushing China out of Latin America, as it is already deeply entrenched in the region’s economy and shows no sign of scaling back its involvement. Addressing this issue in an antagonistic or aggressive manner would only exacerbate tensions between the two superpowers. Accordingly, a more cooperative—not competitive—relationship would improve outcomes for the United States.

Rather than trying to convince Latin American states to reject their new partner, the United States needs to accept China’s right to participate in the region. The United States should identify its strengths and weaknesses before deciding to challenge China with unilateral business projects. It would be unwise for the United States to follow in China’s footsteps and undertake large infrastructure projects in Latin America because Western investors have historically struggled to successfully conduct megaprojects. China is the principal developer of technology and infrastructure in the region and it is unlikely that the United States could ever out-dominate China in these sectors on its own. As the common American saying goes, if you can’t beat them, join them.

Although the United States is not accustomed to being accommodating towards China, the United States needs to reconsider its policies regarding Latin America to hold on to the remaining influence it has left in the region. The United States should explore collaborating with China to regain its lost influence and take advantage of untapped economic prospects within the region. With the help of China, a world leader in technology and infrastructure, the United States should take on new business opportunities in Latin America. First, the United States should participate in social infrastructure development projects by building much-needed hospitals, schools, and housing—infrastructure that China has yet to build.

Second, U.S. firms should partner with Chinese firms to develop additional types of green technology—particularly wind turbines and solar panels—to provide energy to the region. China has been busy constructing dams throughout Latin America, but this has contributed to the region’s over-reliance on hydropower, a source of energy that may prove to be unreliable in the future due to climate change and fluctuating rainfall patterns. The region needs a more diverse set of environmentally-friendly power sources. Wind and solar power are less developed technologies in this region but, if further explored, may provide Latin America with more sustainable sources of energy.

In addition to engaging in joint infrastructure projects with China, the United States needs to swallow its pride and join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the revised deal of the TPP. In doing so, the United States will not only become trading partners with some vital Latin American countries (Mexico, Peru, and Chile) but also show other states in the region that it is willing to renew connections. The United States needs to make an effort to strengthen its ties to Latin America because, as can be seen in the case of China, deeper economic integration and cooperation often translates into fostering more positive diplomatic relations.

Additionally, if the United States is involved in a trade partnership with China, the United States can monitor China and keep it relatively accountable to the terms of the agreement in its economic practices.

It would be beneficial to both Latin America and the United States if the two superpowers unite in economic matters within the region. Economic growth will be more sustainable if Latin American states are not overly dependent on one particular country. In addition, with a reinvigorated American presence in the region, China will be less inclined to freely act in corrupt or malign ways. The United States can monitor Chinese projects and help Latin American states enforce their own environmental and labor standards. Finally, the United States is more likely to have an influence on China’s behavior with a cooperative relationship.

The United States will not be able to outright beat the Chinese in Latin America, so it should join them. U.S.-China economic cooperation in Latin America will assist the United States in realizing the State Department’s three-pronged regional objective of promoting prosperity, strengthening governance, and improving security. This new political-economic strategy will advance U.S. interests and mitigate the risks of negative Chinese influence, while also helping Latin America further develop in a more sustainable and responsible way.