By James McKenna

Major infrastructure projects initiated by the People’s Republic of China (PRC) in Latin America and the Caribbean (LAC) have quickly come to challenge US economic hegemony in a region that has often been deemed “America’s Backyard.” In order to combat this encroachment and protect American interests in its near-abroad, the US and its G7 partners should prioritize LAC countries over other regions in their new global infrastructure initiative, utilizing their relative economic, political, and even cultural advantage over the PRC.

In June of this year, the Biden Administration, in partnership with other members of the G7, announced plans to directly compete with China’s Belt and Road Initiative (BRI) through its own (albeit somewhat awkwardly named) infrastructure initiative named Build Back Better World (B3W).[1] Still in its early stages, B3W aims to narrow the more than $40 trillion of infrastructure demands in the developing world by mobilizing private and public sector capital in a variety of areas including climate, health and health security, digital technology, and gender equity and equality. 

Touting a more values-based and transparent approach to its projects compared to the BRI—which has had an estimated 35 percent of its infrastructure portfolio hampered by implementation issues including corruption and labor violations—B3W looks to quickly catch-up in a race for global economic influence that it has started nearly a decade behind.[2] Enjoying its head start, the People’s Republic of China would first initiate the BRI in 2013, looking to mimic ancient Silk Road trade routes throughout Eurasia by financing physical infrastructure projects that promote greater global interconnectivity and access to trade.[3] Since then, the scope of this initiative has grown considerably, expanding into other sectors and other regions throughout the world.

One of the BRI’s major expansions has been its foray into Latin America and the Caribbean in late 2017. In what would first come as a bit of a surprise, Panama, one of the US’s greatest regional partners, would (without making the US aware of their intensions) change its diplomatic ties from Taiwan to Beijing in June of 2017.3 Five months later, the country would be the first in the region to officially join the BRI. Now, just four years later, participation in the BRI has grown to include 18 other LAC countries.[4]

Predating and coinciding with the PRC’s new infrastructure ventures, has been its general rise of economic involvement in the LAC over the last two decades. Between the years 2002 and 2019, bilateral trade between the PRC and LAC countries have seen a more than 18-fold increase, growing from only $17 billion to $315 billion, with plans to reach $500 billion by 2025.[5]

Compared to US, however, these numbers are still relatively small. Total bilateral trade with LAC countries would be estimated at $1.3 trillion in 2019, making the US the region’s leading trade partner.[6] Also seeing substantial growth, these numbers would come to represent an estimated 60 percent increase in bilateral trade in the region since 2009.

Relative advantages exist, however, in the PRC’s ability to surpass the US as a leading trade partner in select countries. These include Brazil, Chile, Peru, and Uruguay, while also having created free trade agreements with Chile, Peru, and Costa Rica.[7] Much of this can be attributed to the agricultural production and vast mineral resources found within these countries—both representing major Chinese foreign imports.

In terms of politics, recognition of Beijing as China’s one true government has become a prerequisite for participation in the BRI. Apart from Panama, this has led the Dominican Republic and El Salvador to also switch recognition from Taiwan to Beijing . With the PRC’s greater number of economic commitments in recent years, more countries are likely to follow suit in a region that continues to represent Taiwan’s greatest holdout.[8]

Beyond its attempts at growing Beijing’s recognition, the PRC’s political aspirations in the region ostensibly work to supplement their economic aspirations by participating and urging LAC countries toward regional and international cooperation (Myers, 2020).[9] Additionally, rising concerns regarding the PRC’s current engagements in the region acting as a foundation for future military expansion have until now appeared relatively baseless, though nevertheless a possibility.[10]

On the other hand, the US maintains a more complex and multifaceted political relationship with the region, one which goes back more than a century. Currently, American primary political engagements include working to combat drug trafficking and corruption, strengthening military cooperation, managing migration, and observing foreign regional engagements.

A major advantage the US holds over the PRC in LAC countries is soft power. Built upon longstanding exchanges both political and cultural in nature, the American presence represents something much more familiar when compared to the PRC—one without major language and cultural barriers. With this familiarity, however, comes suspicion. Epitomized by American backed regime changes of the past and current immigration policies, regional trust in the US has at times been shaky.[11]

All in all, as to be expected, the governments of LAC countries are acting out of their own self-interests. Aligning with these interests, mostly through economic ventures, the PRC has seen its influence within the region grow exponentially in the last two decades—much to the dismay of the US.

In order to check Chinese influence within its near abroad, and maintain its own, the US should steer B3W toward an initial focus on the region. Doing so provides B3W an opportunity to compete with BRI in a region that it holds relative advantage. B3W will have its best chance at being successful if efforts are made to ensure the core values of the program are maintained and other political and economic commitments stay out of the way.

James McKenna is a graduating senior from George Mason University majoring in global affairs with a concentration in Governance and a minor in History.

[1] FACT SHEET: President Biden and G7 Leaders Launch Build Back Better World (B3W) Partnership. (2021, June 16). Retrieved from https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/12/fact-sheet-president-biden-and-g7-leaders-launch-build-back-better-world-b3w-partnership/

[2] Osborn, C. (2021, October 01). Can the United States Rival China in Latin America? Retrieved from https://foreignpolicy.com/2021/10/01/china-belt-road-initiative-latin-america-united-states-g-7-build-back-better-world-investment/

[3] Zhang, P. (2019, October 17). Belt and Road in Latin America: A regional game changer? Retrieved from https://www.atlanticcouncil.org/in-depth-research-reports/issue-brief/belt-and-road-in-latin-america-a-regional-game-changer/

[4]Nedopil, C. (2021). Countries of the Belt and Road Initiative (BRI). Retrieved from https://greenfdc.org/countries-of-the-belt-and-road-initiative-bri/

[5] U.S. Southern Command 2021 Posture Statement. (2021, March 16). Retrieved from https://www.southcom.mil/Portals/7/Documents/Posture Statements/SOUTHCOM 2021 Posture Statement_FINAL.pdf

[6] Western Hemisphere. (n.d.). Retrieved from https://ustr.gov/countries-regions/americas

[7] Sullivan, M. P., & Lum, T. (2021, July 1). China’s Engagement with Latin America and the Caribbean. Retrieved from https://sgp.fas.org/crs/row/IF10982.pdf

[8] Countries That Recognize Taiwan 2021. (2021). Retrieved from https://worldpopulationreview.com/country-rankings/countries-that-recognize-taiwan

[9] Myers, M. (2020, May 07). China's Regional Engagement Goals in Latin America. Retrieved from https://carnegieendowment.org/2020/05/07/china-s-regional-engagement-goals-in-latin-america-pub-81723

[10] Ellis, R. (2021, January 27). Retrieved from https://www.nationaldefensemagazine.org/articles/2021/1/27/viewpoint-why-chinas-advance-in-latin-america-matters

[11] Morgenstern, S., & Bohigues, A. (2021). Battling for the Hearts and Minds of Latin Americans: Covariance of Attitudes toward the United States and China. Latin American Research Review, 56(2), 280. doi:10.25222/larr.656