China Power

China’s Foreign Minister Tours Latin America

Wang Yi stopped in Cuba, Venezuela, Argentina, and Brazil to pave the way for Xi Jinping’s July visit.

China’s Foreign Minister Tours Latin America
Credit: Wikimedia Commons

Even while U.S. President Barack Obama was touring Asia last week, Chinese Foreign Minister Wang Yi was making the rounds in the Americas — South America and the Caribbean, to be exact. On April 18, Wang left for Cuba, and also visited Venezuela, Argentina, and Brazil before heading back to China on April 27.

One of Wang’s major goals was to pave to way for Chinese President Xi Jinping’s own visit to Latin America, planned for July, when Xi will be attending the sixth annual BRICS (Brazil, Russia, India, China, and South Africa) summit in Brazil. That visit will be Xi’s second to the region, following a tour through Trinidad and Tobago, Costa Rica, and Mexico last year.

Under Xi Jinping, China has upped its diplomatic engagement with many regions of the world, and South America and the Caribbean are no exception. Earlier this year, China officially announced a new dialogue mechanism between it and the community of Latin American and Caribbean States (CELAC), called the China-CELAC forum. Wang’s visit was an attempt to continue that momentum through to Xi’s visit.

Wang’s tour was an interesting mix of old and new partnerships. Cuba and Venezuela have long enjoyed solid relationships with China — Cuba due to its inclusion in the dwindling club of communist regimes, and Venezuela because of its oil supplies (and, until Hugo Chavez’s death last year, a charismatic and anti-American leader).

China’s relations with Argentina and Brazil are newer, but still not exactly young. China established a strategic partnership with Argentina in 2004 and with Brazil in 1993. Still, ties with these countries have expanded more rapidly in recent years. China and Brazil established a “comprehensive strategic dialogue” in 2012, with Wang’s visit to Brazil representing the first meeting under this framework. Wang also expressed his hope that China and Argentina could work together to implement more high-level dialogues.

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Because Wang’s trip was seen as laying the groundwork for a visit by Xi this summer, there were few deliverables from this round of visits. Instead, Wang was attempting to make progress on various economic deals that can be signed during Xi’s tour of the region. Xinhua specifically mentioned upping China’s investment in Cuba, including the possible construction of a car plant, as well as increasing Chinese investments in Venezuela’s oil industry. Wang also called for increased Chinese investment in Argentina and Brazil.

China’s investment in Latin America, although it goes largely unnoticed in the West, is already significant. According to the China-Latin America Finance Database, China has offered the region over $100 billion in loans since 2005. Venezuela is by far the largest recipient, with China committing over $50 billion in loans to Caracas (many of them to be repaid through oil shipments). In terms of Chinese loans, Argentina and Brazil come in second and third, at $14 billion and $13 billion respectively.  Slightly over half of those loans ($54.4 billion) went to infrastructure projects, exactly the field that Wang highlighted for further investment in his visits. It’s clear that China is not changing its game plan for Latin America, merely expanding on an existing blueprint for relations.

Beyond the economic realm, however, there are important political ramifications to China’s increased engagement with Latin America. At each of his stops, Wang made a reference to the need to “safeguard the interests of the developing countries.” China, which still considers itself a developing country, often portrays itself as the leader of the developing world. Generally, this also involves either an implicit or explicit comparison to the current, U.S.-led world order, where developing countries are underrepresented in global decision-making bodies (like the United Nations Security Council). Wang also promised to work with his Latin American counterparts “for a more just and equitable international order,” which would naturally involve changing the current status quo. China’s relationship with Brazil is especially important in this regard, as both countries are counted among the BRICS group, which has its own aspirations for global leadership.