China’s presence in the Western Hemisphere continues to be a hot topic. First, China is a growing trade partner for the majority of countries in the region, and for large number of countries their first or second trade partner. Second, the specter of China as global super power is becoming a growing concern, augmented now by President Trump’s “America First” rhetoric, which threatens a global vacuum.
But in Latin America and the Caribbean, flashy, expensive infrastructure projects —one of the major hallmarks of growing Chinese soft power around the world—have, despite many promises and some successes in Africa and Eurasia, universally failed to come to fruition. The Chinese financed trans-isthmus canal cutting through Nicaragua is dead in the water. The housing projects to be developed jointly by the Chinese and the Venezuelan government—then under President Hugo Chávez—are half built and largely uninhabitable. The train line running across South America from Peru’s Pacific coast to Brazil’s Atlantic coast is nowhere to be seen. And a less ambitious (though still daunting) rail project, bridging Colombia’s two coasts is, again, non-existent.
Indeed, China is a top five export partner for twelve Latin American countries (compared to only six in 2005) and a top five import partner for every Latin American country. Between 2007 and 2014, China loaned over $118 billion to Latin American countries. In isolation, this would seem to translate into a visible and influential presence in the Americas.
But comparatively, Latin America has received only a small fraction of the windfall from China’s growing global presence, even in terms of trade and loans. More, the empty Chinese infrastructure promises in Latin America are becoming real in other regions. In Africa and Eurasia, Chinese investment and loans dwarf Beijing’s economic activity in the Western Hemisphere. The Chinese government has lent Ethiopia over $380 billion (far surpassing the total loans for all of Latin America), and between 2010 and 2014 Chinese firms helped construct the first expressway in the country. A $3.2 billion, Beijing-backed railroad opened in Kenya in May. This summer, China opened its first military base in Africa—part of a major port construction project in Djibouti. In July, the Sri Lankan government signed a $1.2 billion deal with China to build a port in the south of the island nation. The list goes on. Across Eurasia and Africa, China continues to fund ambitious infrastructure projects with the ultimate goal of connecting the economies in these regions via land and sea.
In addition to the comparatively tiny economic attention China has given Latin America, Chinese-backed infrastructure projects in the hemisphere have universally failed to get off the ground. In 2013, Nicaraguan President Daniel Ortega announced a $40 billion canal funded by a Chinese firm. Four years later, construction has yet to begin. A combination of political turmoil in Brazil and lack of enthusiasm in Peru has stalled plans to build a coast-to-coast railway proposed by China. A “dry canal” linking Colombia’s two coasts—described as “quite advanced” by Colombian President Santos in 2011—is still in the planning phase.
Now, the region is finally catching on. The failure to deliver on these projects means that new projects, such as China’s agreement to invest $30 billion on infrastructure in Argentina (including $12.5 billion on two nuclear reactors) or Xi Jinping’s promise to invest $20 billion on Brazilian infrastructure, have started to be met with skepticism.
There’s no clear explanation why Chinese infrastructure projects have failed in the Americas when they’ve succeeded elsewhere. It’s possible that the United States’ dominance in the hemisphere has scared China off, but that doesn’t make sense given the retreat started by the Obama administration and accelerated by the Trump administration—and the clear need for new and updated infrastructure in the region. More likely is that Beijing has decided to focus its ambitions on Eurasia and Africa, especially as China’s growth slows.
There is little doubt about the long term ambitions in China. But in the Western Hemisphere, despite the handwringing and alarmism, those ambitions have led—so far at least—to comparatively small change and broken promises.
