Author: Laura Neves
The first China-CELAC ministerial meeting took place in Beijing in the beginning of 2015, materializing the creation of a new regional development cooperation bloc. During the preparation of the China-CELAC Cooperation Plan 2015-2019, the main bilateral cooperation measures were defined, and the most relevant investment areas were outlined, such as infrastructure, energy and transport. In addition to the determination of priority areas for strengthening interregional relations, the sixth point of the Santiago Declaration, drafted in early 2018, decided on a mutual agreement to expand the themes addressed by the Joint Plan of Action. This aspect included the following themes: politics and security, corruption, drugs and cybercrime. Such agendas have become increasingly important because they cause domestic political instability in Latin American countries, thereby undermining development cooperation relations between the region and China.
In addition to the new modalities of cooperation, Beijing has formalized the inclusion of CELAC in the Belt and Road Initiative (BRI) through the special declaration “One Belt, One Road”. This measure is perceived by the Latin American countries as an opportunity to close technology and infrastructure gaps that remain key challenges for development in Latin America and the Caribbean. However, such perspective promotes a bandwagoning strategy that reinforces an uneven bilateral relationship between the countries of the region and China, rather than fostering multilateralism that in fact provides a greater biregional balance of power.
Although China’s foreign direct investment (FDI) in Latin America has increased as envisaged in the 2015-2019 Cooperation Plan, a great deal of questioning arises as to whether such transactions actually boosts development in Latin America due to the concentration of resources in certain sectors, such as soybeans, iron and oil, and certain countries, such as Brazil, Peru and Argentina. In response to these concerns, point 5.9 of the accord signed during the II China-CELAC Forum aims to diversify the regions which receive FDI, focusing on Least Developed Countries, Small Island Developing States and Landlocked Developing Countries. Another criticism that can be identified regards the type of development is being implemented as a consequence of China-CELAC cooperation policies, since much of Chinese investment is currently focused on the extraction of commodities, neglecting more sustainable development models.
Despite the criticisms made by the Latin American countries, there were no statements about the diversification of the types of Chinese direct investments during the ministerial meeting. This leads to the conclusion that the cooperation proposed by China is always to the advantage of the Chinese State and offers only specific benefits to CELAC countries. It is of utmost importance, therefore, that China diversifies its sectorial investment targets if it really wants to be coherent with the discourse of win-win development cooperation. In addition, it is of paramount importance to consider how the new policies and the consequent bandwagoning may be facilitating a polarization of power in the international system, causing a determined subjugation of the region to an emergent nation that is motivated by national interests the same way other traditional powers have previously been.
Published in December 2018