Assessing China’s Economic Influence in Latin America

Assad Raza is an Active Component U.S. Army Civil Affairs Officer with deployment experience throughout the Middle East.  He holds an M.A. in Diplomacy with a concentration in International Conflict Management from Norwich University, and is a graduate of The Western Hemisphere Institute for Security Cooperation Command and General Staff Officer Course at Fort Benning, Georgia.  He can be found on Twitter @assadraza12.  Divergent Options’ content does not contain information of an official nature nor does the content represent the official position of any government, any organization, or any group.


Title:  Assessing China’s Economic Influence in Latin America

Date Originally Written:  April 12, 2020.

Date Originally Published:  May 25, 2020.

Summary:  Similar to the Soviet Union during Cold War, China is seeking victory without war.  In this Latin America case however, China is leveraging its economic instrument of power to achieve influence instead of supplying fellow communists with materiel like the Soviet Union did.  China’s efforts in this arena are a threat to U.S. interests in Latin America.

Author and / or Article Point of View:  The author believes China’s investments and financial deals throughout Latin America can threaten U.S. interests in the long-term.

Text:  In 2008, China published a White Paper expressing their long-term goals in Latin America. This White Paper highlighted several areas of cooperation to include trade, investment, and financing throughout the region[1]. Over a decade later, China almost built a canal in Nicaragua, negotiated several free trade agreements with countries like Brazil and El Salvador, and funded several infrastructure projects throughout Latin America. Unfortunately, China has successfully used its economic instrument of power to coerce countries and legally advance their global interests against competitors like the United States.

Over the past decade, China has become the largest trading partner to countries like Brazil and El Salvador. However, these trading dependencies have caused countries like Brazil to fall into recessions because of their reliance on China’s economy, as seen in 2015[2]. China’s approach has increased Latin American countries dependencies with them, which can be a risk to their economies and the region. A good example is China’s loans-for-oil deal with Venezuela, which contributed to Venezuela’s economic collapse due to falling oil prices and their inability to repay Chinese loans[3]. However, China’s trade is not limited to only natural resources; it also includes building infrastructure throughout the region as another means to trap countries into default, holding them hostage to more Chinese coercion.

China has taken on several infrastructure projects to consolidate its influence throughout Latin America. In December 2019, the President of El Salvador met with Chinese President Xi Jinping to finalize a deal on several infrastructure projects for the country[4]. These projects include a large sports stadium and a water treatment plant[5]. This deal came after El Salvador broke diplomatic ties with Taiwan and publicly announcing their support to the One-China Policy[6]. The agreement with El Salvador demonstrates China’s ability to undermine international support for Taiwan through investment opportunities in developing countries. These risky investments in Latin America are similar to China’s Belt and Road Initiative, in countries throughout Asia.

Throughout Asia and Africa, China has leveraged long-term leases of ports in vulnerable countries that have failed to pay off loans. For example, China was able to negotiate a 99-year lease over the port of Hambantota with Sri Lanka due to debt[7]. This long-term lease to pay off loans is not isolated to Asia but could be used to leverage territories in Central and South America with countries in debt to China. China’s investments are strategic, knowing that developing countries in Latin America that default on payments may feel pressured to lease out territories like their ports.

China has already attempted this approach in Central American countries like El Salvador. In 2018, China tried to purchase Isla Perico, an Island off the coast of El Salvador, and to relocate its population to the mainland[8]. China also requested a 100-year lease for areas near a port and tax exemptions for Chinese companies[9]. More importantly, these offers came at a time when the U.S. had suspended aid to El Salvador because of mass migration issues leaving a gap for China to exploit. Although the U.S. has temporarily stalled these negotiations, it demonstrates China’s ability to target vulnerable states to advance their agenda legally.

Chinese investment in Latin America also includes the technology sector. This technology consists of similar systems used in China to conduct surveillance on their people. In 2016, Chinese telecom company ZTE Corp assisted with Venezuela’s “fatherland card” that tracked citizens and linked it to government subsidized food and health programs[10]. The risk with this technology is that other governments may want to acquire it from China and use this to reward loyalists and oppress those perceived as not loyal, increasing instability, as seen in Venezuela. This pattern is worrying and without mitigation could be a harbinger of more Orwellian-type surveillance state behavior spreading throughout Latin America.

China’s interests throughout Latin America continue to increase, as seen with their recent attempt to lease port lying areas in El Salvador. Much like in Sri Lanka, China aggressively pursues developing countries to legally entrap them and coerce them into long-term commitments for compensation. Although their priority in Latin America is to gain an economic foothold, their actions also shape Latin American perceptions and buys political influence in the region. China’s economic advancement in Latin America has the potential to become a national security threat to the U.S. and its interests throughout the region.


Endnotes:

[1] Peters, E. (2015). China’s Evolving Role in Latin America: Can It Be a Win-Win? (pp. 5-11, Rep.). Atlantic Council. Retrieved April 12, 2020, from www.jstor.org/stable/resrep03629.5

[2] Patey, L. (2016, November 21). Trouble Down South: Xi Jinping’s Latin American Tour. Foreign Affairs. Retrieved April 12, 2020, from https://www.foreignaffairs.com/articles/south-america/2016-11-21/trouble-down-south

[3] Guevara, C. (2020, January 13). China’s support for the Maduro regime: Enduring or fleeting? Atlantic Council. Retrieved April 12, 2020, from https://www.atlanticcouncil.org/blogs/new-atlanticist/chinas-support-for-the-maduro-regime-enduring-or-fleeting

[4] Renteria, N. (2019, December 3). China signs on for ‘gigantic’ investment in El Salvador infrastructure. Reuters. Retrieved April 12, 2020, from https://www.reuters.com/article/us-el-salvador-china/china-signs-on-for-gigantic-investment-in-el-salvador-infrastructure-idUSKBN1Y7266

[5] Ibid.

[6] Ibid.

[7] Schultz, K. (2017, December 12). Sri Lanka, Struggling with Debt, Hands a Major Port to China. New York Times. Retrieved April 12, 2020, from https://www.nytimes.com/2017/12/12/world/asia/sri-lanka-china-port.html

[8] Londono, E. (2019, September 21). To Influence El Salvador, China Dangled Money. The U.S. Made Threats. New York Times. Retrieved April 12, 2020, from https://www.nytimes.com/2019/09/21/world/americas/china-el-salvador-trump-backlash.html

[9] Ibid.

[10] Berwick, A. (2018, November 14). How ZTE helps Venezuela create China-style social control. Reuters. Retrieved from https://www.reuters.com/investigates/special-report/venezuela-zte

Assad Raza Below Established Threshold Activities (BETA) China (People's Republic of China) Economic Factors

Assessing U.S. Use of Coercive Diplomacy

Assad Raza is an Active Component U.S. Army Civil Affairs Officer with deployment experience throughout the Middle East.  He holds a M.A. in Diplomacy with a concentration in International Conflict Management from Norwich University, and is a graduate of The Western Hemisphere Institute for Security Cooperation Command and General Staff Officer Course at Fort Benning, Georgia.  He can be found on Twitter @assadraza12.  Divergent Options’ content does not contain information of an official nature nor does the content represent the official position of any government, any organization, or any group.


Title:  Assessing U.S. Use of Coercive Diplomacy

Date Originally Written:  February 23, 2020.

Date Originally Published:  March 9, 2020.

Author and / or Article Point of View:  The author believes the U.S. should only use coercive diplomacy if the situation is vital to U.S. interests, and the U.S. is prepared to go to war if necessary.

Summary:  U.S. use of coercive diplomacy has conflicting results. The 2018 missile strikes to compel the Syrian regime to stop using chemical weapons on civilians succeeded. The 2020 killing of an Iranian general to compel Iran to stop its aggression in the Middle East failed. To date, North Korea has not abandoned its nuclear program despite U.S. military threats, sanctions, and diplomatic talks.  Coercive diplomacy’s success isn’t guaranteed and it risks escalation.

Text:  Throughout history, the United States has used coercive diplomacy as a diplomatic strategy to influence adversaries’ behaviors. However, the U.S. success rate on the use of this strategy has mixed results. One example is the failed U.S. attempts to persuade the government of Iraq to cease their weapons of mass destruction (WMD) program before the 2003 invasion[3]. A more recent example is the January 2020 U.S. drone strike that killed Iranian General Qassim Soleimani that failed to compel Iran to stop its aggression in the Middle East and provoked their retaliation, which could have quickly escalated to conflict[2]. These two examples highlight the importance of understanding the motives and perceptions of the adversary that can limit the effectiveness of coercive diplomacy.

Coercive diplomacy is the use of military and non-military threats to primarily persuade an adversary to cease a specific action. Former Stanford University political professor, Alexander L. George, defined coercive diplomacy as a “defensive strategy that is employed to deal with the efforts of an adversary to change a status quo situation in his own favor, by persuading the adversary to stop what it is doing or to undo what it had done[3].” A successful example of coercive diplomacy is the 2018 U.S. missile strikes against the Syrian regime to compel them to stop chemical attacks on civilians[4].

When employing coercive diplomacy, the coercing power must have a credible threat for non-compliance. According to Alexander George, “…the military weaker side may be strongly motivated by what is at stake and refuse to back down, in effect calling the bluff of the coercing power[5].” An excellent example of this “calling of bluff” is U.S. President Barack Obama’s threats to use military action on the Syrian regime if they crossed the “red line” by using chemical weapons on civilians. Once Syria crossed this red line, in August 2013, President Obama did not follow through on his threat, thus hurting U.S. credibility[6]. Failing to respond to non-compliance can cause the coercing power to lose credibility and negatively impact how it is perceived internationally as it did not follow through on its military promises.

Additionally, coercive diplomacy can include a mixture of military and non-military threats to influence an adversary’s behavior[7]. Yet, depending on what is at stake, not every actor will respond to these combinations of threats the same. For example, to date, North Korea has not abandoned its nuclear program and ballistic missile testing from the combination of U.S. military threats, sanctions, and diplomatic talks[8]. However, North Korea’s non-compliance may be due to their perceptions of the U.S. views on their nuclear program and the low risk of U.S. military actions based on U.S history towards them over the past 25 years.

One major risk of coercive diplomacy is the difficulty in calculating the adversary’s response. As Robert Art and Patrick Cronin wrote, “… mistakes are easy to make in situations where resolve is hard to estimate. …the coercer often underestimates the targets will to resist. Consequently, the coercer has to apply larger amounts of force, but then it entered the realm of war[9].” Two examples of this type of escalation are the 1999 North Atlantic Treaty Organization’s air campaign due to Serbian non-compliance to stop their persecution of Kosovo Albanians and the 2003 U.S. invasion of Iraq to halt their WMD program. Hence, there are no guarantees that the use of coercive diplomacy will persuade the adversary to stop an action or, worse, the adversary’s miscalculations could escalate the situation.

As mentioned earlier, before employing coercive diplomacy, it is crucial to understand the adversary’s motivations and what is at stake for them. The January 2020 drone strike that killed the Iranian general is an example of the need for understanding motivational factors to calculate an adversary’s response. Iran’s potential loss of credibility within their own country and the region may have driven their retaliatory missile attacks at the two bases in Iraq[10]. Although there were no U.S. fatalities, with the right miscalculations, this retaliation could have escalated past coercive diplomacy to full-on war. This example reveals the risk of employing coercive diplomacy and the difficulties with calculating adversaries’ countermeasures.

In summary, the recent use of U.S. coercive diplomacy has conflicting results. For example, the 2018 missile strikes to compel the Syrian regime to stop using chemical weapons civilians achieved its objectives, but the 2020 drone strike of the Iranian general to compel Iran to stop its aggression in the Middle East did not. Iran’s retaliation demonstrates that weaker states will respond back if they believe their credibility is at stake. Also, the use of coercive diplomacy against North Korea shows the difficulty of changing an adversary’s behavior when their most vital program for survival is at stake. Moreover, coercive diplomacy is only of value if the threat is credible, and the nation is prepared to go to war if necessary. Lastly, coercive diplomacy is a risky strategy as it depends on the adversary’s motivations, and any wrong calculation can escalate the situation to full-on war, as seen with the 2003 invasion of Iraq.


Endnotes:

[1] Jervis, R. (2013). Getting to Yes with Iran: The Challenges of Coercive Diplomacy. Foreign Affairs, 92(1), 105-115. Retrieved February 17, 2020, from www.jstor.org/stable/41721008

[2] Missy Ryan, J. D. (2020, January 4). How Trump decided to kill a top Iranian general. Retrieved February 23, 2020, from https://www.washingtonpost.com/national-security/how-trump-decided-to-kill-a-top-iranian-general/2020/01/03/77ce3cc4-2e62-11ea-bcd4-24597950008f_story.html

[3] Levy, J. (2008). Deterrence and Coercive Diplomacy: The Contributions of Alexander George. Political Psychology, 29(4), 537-552. Retrieved February 17, 2020, from www.jstor.org/stable/20447143

[4] Anne Gearan, M. R. (2018, April 14). U.S. and allies warn Syria of more missile strikes if chemical attacks used again. Retrieved February 2020, from https://www.washingtonpost.com/world/national-security/us-launches-missile-strikes-in-syria/2018/04/13/c68e89d0-3f4a-11e8-974f-aacd97698cef_story.html

[5] George, A. L. (1991). Forceful Persuasion: Coercive Diplomacy as an Alternative to War. Washington, D.C.: United States Institute of Peace Press.

[6] Chollet, D., Glover, J., Greenfield, J., & Glorioso, A. (2016, July 19). Obama’s Red Line, Revisited. Retrieved February 23, 2020, from https://www.politico.com/magazine/story/2016/07/obama-syria-foreign-policy-red-line-revisited-214059

[7] George, A. L. (1991). Forceful persuasion: Coercive Diplomacy as an Alternative to War. Washington, D.C.: United States Institute of Peace Press.

[8] North Korea. (2019, August). Retrieved February 23, 2020, from https://www.nti.org/learn/countries/north-korea

[9] Cronin, P. M., & Art, R. J. (2003). United States and Coercive Diplomacy. Washington, D.C.: United States Inst. of Peace Press.

[10] Bender, B., Zanona, M., Ferris, S., O’Brien, C., Starks, T., & Forgery, Q. (2020, January 7). Iran retaliates with missile attacks on U.S. troop locations in Iraq. Retrieved February 2020, from https://www.politico.com/news/2020/01/07/iran-retaliation-iraq-base-095869

 

Assad Raza Assessment Papers Coercive Diplomacy Diplomacy

Assessing a U.S. Policy of Détente with China

Assad Raza is an Active Component U.S. Army Civil Affairs Officer with deployment experience throughout the Middle East.  He holds a M.A. in Diplomacy with a concentration in International Conflict Management from Norwich University, and is a graduate of The Western Hemisphere Institute for Security Cooperation Command and General Staff Officer Course at Fort Benning, Georgia.  He can be found on Twitter @assadraza12.  Divergent Options’ content does not contain information of an official nature nor does the content represent the official position of any government, any organization, or any group.


Title:  Assessing a U.S. Policy of Détente with China

Date Originally Written:  December 23, 2019.

Date Originally Published:  January 27, 2020.

Author and / or Article Point of View:  The author believes a policy of Détente, easing tension, with China would benefit the U.S. to avoid a military confrontation and increase economic opportunities between major powers.

Summary:  Any U.S. confrontation with China, which is the world’s second-largest economy and an emerging major power, would impact the global economy. The U.S. and its allies and partners cannot sever ties with China due to economic interdependencies. For these reasons, a policy of Détente with China that balances cooperation and deterrence to avoid a military confrontation would not only benefit the U.S. but the entire world.

Text:  In 1971 the United States set the conditions to integrate China into the international community. That year U.S. Secretary of State Henry Kissinger visited Beijing twice, and the United States voted for China’s permanent seat on the United Nations Security Council[1]. Now, 48 years later, U.S. Secretary of State, Mike Pompeo is saying that “China is the greatest threat the U.S. faces[2].” As an emerging major power, China’s foreign policy and competitive economy can threaten U.S. interests in the long-term.

To secure U.S. interests, a U.S. policy of Détente would ease U.S. tensions with China thus avoiding a military confrontation that could expand on a global scale. According to author Fareed Zakaria, “The U.S. risks squandering the hard-won gains from four decades of engagement with China, encouraging Beijing to adopt confrontational policies of its own, and leading the world’s two largest economies into a treacherous conflict of unknown scale and scope that will inevitably cause decades of instability and insecurity[3].” In a globalized world, the U.S. and several allies are economically interdependent, and any confrontation with China would have a drastic effect on the global economy. For this reason, improved U.S. relations with China would increase economic opportunities and reduce the risk of confrontation.

China is the second-largest economy and the largest trading partner in the world. As a result of this, any confrontation, either economically or militarily, will drastically impact the entire world. China’s recent economic decline and current U.S. trade disputes demonstrate China’s impact on the global economy. For example, Japan, China’s second-largest trading partner, blames China’s economic downturn for its first global trade deficit (1.2 trillion yen) since 2015[4]. Understanding China’s economic ties will likely drive U.S. policy development towards China. A China policy taking into account economic cooperation in areas of mutual interest will reduce the risk of a global market crash.

Beyond economic concerns, a U.S. policy towards China could include an arms agreement to limit a potential arms race and identify areas of cooperative research between the two countries. A good example is the Strategic Arms Limitation Treaty (SALT) that was part of the 1972 Nixon-Kissinger strategy of Détente with the Soviet Union[5]. Although negotiations over various strategic delivery systems (nuclear) continued through several administrations, this treaty did establish the necessary groundwork to prevent an accidental escalation of a nuclear war. A similar model to SALT with China would avoid the risk of confrontation and promote peace between major powers. A treaty between both countries does not imply that deterrence is not an option to manage any military ambitions China may have, for example, with Taiwan and the South China Sea.

In addition to economic and arms concerns, a policy of cooperation in technology and space with China would benefit the U.S. diplomatically and economically. During the Cold War, the U.S. pursued cooperative space research with the former Soviet Union. Although tensions at the time limited the extent of the cooperation, Russia’s technological contributions, pre- and post-Cold War, did benefit with establishing the International Space Station[6]. Additionally, cooperation in space also promoted U.S. foreign policy objectives in areas such as nonproliferation and arms control with Russia. Involving China in selected areas of cooperation in technology and space can ease tensions and increase diplomatic engagements in areas of mutual interests for both countries. Moreover, this space involvement can provide opportunities for the U.S. to engage with China on their nuclear program as they continue to build out their military capabilities.

The U.S. cannot sever ties with China due to the economic interdependence between China, the U.S., and its allies and partners. Additionally, several U.S. based companies want access to the growing market in China. According to the Scholl Chair in International Business at the Center for Strategic and International Studies (CSIS), William Reinsch, “With 1.2 billion people, you can’t be a multinational company or a global company without some kind of presence there one way or the other[7].” Hence, U.S. companies would benefit from a U.S. policy that eases tension and increases economic ties with China. However, the topic of human rights abuses, censorship, and mass surveillance in China will continue to be debated between U.S. businesses, the U.S. government, and China.

China’s domestic behavior and foreign policy do threaten the liberal international order, for example, with human rights. However, severing ties with China would empower them to continue those repressive behaviors and influence other developing countries to follow suit. A U.S. policy that increases relations with China can provide the necessary leverage in the future to reinforce their commitment to human rights and promote peace within their borders.

For the U.S., a multi-faceted policy of Détente, compared to severing ties with from China, would better benefit the nation in the long-term. According to the chief economist at Enodo Economics, Diana Choyleva, severing ties with from China “…would mean cost-push inflation, it would mean the slowing down of innovation and technological progress, it would mean that each economy trying to solve the issues of increased inequality will find it that much harder to do so[8].” For this reason, a policy of Détente with China that balances cooperation and deterrence to avoid a military confrontation would not only benefit the U.S. but the entire world.


Endnotes:

[1] United States Department of State, Office of the Historian, Foreign Service Institute (n.d.). Rapprochement with China, 1972. Retrieved December 23, 2019, from https://history.state.gov/milestones/1969-1976/rapprochement-china

[2] Schwartz, I. (2018). Pompeo: China Is The Greatest Threat U.S. Faces. Retrieved December 23, 2019, from https://www.realclearpolitics.com/video/2018/12/10/pompeo_china_is_the_greatest_threat_us_faces.html

[3] Zakaria, F. (2019). The New China Scare. Foreign Affairs, 99(1), 52–69. DOI: https://www.foreignaffairs.com/articles/china/2019-12-06/new-china-scare

[4] Johnston, M. (2019). China’s Top Trading Partners. Retrieved December 23, 2019, from https://www.investopedia.com/articles/investing/092815/chinas-top-trading-partners.asp 

[5] United States Department of State, Office of the Historian, Foreign Service Institute (n.d.). Strategic Arms Limitations Talks/Treaty (SALT) I and II. Retrieved December 23, 2019, from https://history.state.gov/milestones/1969-1976/salt 

[6] U.S. Congress, Office of Technology Assessment (1995). U.S.-Russian Cooperation in Space, OTA-ISS-618. Retrieved December 23, 2019, from https://www.princeton.edu/~ota/disk1/1995/9546/9546.PDF 

[7] Disis, J. (2019). American companies are taking enormous risks to do business in China. Retrieved December 23, 2019, from https://www.cnn.com/2019/10/11/business/us-china-trade-war-business/index.html 

[8] Mistreanu, S. (2019). Beyond ‘Decoupling’: How China Will Reshape Global Trade In 2020 . Retrieved from https://www.forbes.com/sites/siminamistreanu/2019/12/03/beyond-decoupling-how-china-will-reshape-global-trade-in-2020/#44bda74065b7 

 

Assad Raza Assessment Papers China (People's Republic of China) Détente / Detente