While China Builds Infrastructure in the Americas, the US is Disconcerted
by John Lawrence
How dare they, the Chinese that is, build infrastructure in South America! Why, that's our back yard, our sphere of influence. China is building an elaborate $3 billion port in Chancay, Peru. It wasn't that long ago that the US was complicit in a plot to overthrow the democratically elected President of Chile, Salvador Allende who was a socialist. Be that as it may, many countries are turning to China preferring the building of infrastructure to the building of military bases of which the US has constructed about 750 in some 80 countries throughout the world. China is even bailing out Argentina financially. According to Reuters, Argentina's central bank said on [October 18, 2023] that China has cleared a currency swap line totaling a freely accessible $6.5 billion, part of a broader deal the South American country has been using to help it defend the embattled local peso. Many countries throughout the world are effectively saying to the US, "What have you done for us lately?" So the question is how can the US compete with a country who is building economic assets in other countries while all the US has to offer is the construction of military bases? Is it the world's policeman versus the world's builder, and which role will be more appealing?
"In the district of Chancay, Huaral province, approximately 80 kilometers from the Peruvian capital, Lima, a major private investment project is being developed that promises to change the logistics landscape in Latin America. It is the New Multipurpose Port Terminal of Chancay, a joint project by the Chinese company COSCO Shipping Ports Limited (CSPL), which owns a 60 percent share, and the Peruvian company Volcan Compañía Minera, with the remaining 40 percent.
"With an investment budget of over $3 billion, this ambitious project is in the development stage, over 40 percent complete. Construction began in 2011, and the terminal is expected to start operations in the last quarter of 2024."
Back to Argentina: "China has increased the amount and instead of $5 billion we are getting $6.5 billion," Argentine President Alberto Fernandez told Radio 10 from the Asian country, where he is for an official trip.
"Every time we went through difficult times, Xi Jinping's government gave us its support," Fernandez added. "This is an important step so that production (in Argentina) does not stop."
This is the second swap line with China activated during Fernandez's presidency. According to an official bank source, the total amount of the swap line stood at 47 billion yuans .
The move comes as Argentines head to the ballots on Sunday for a presidential election. Libertarian Javier Milei, who has vowed to dollarize the economy and shut down the central bank, is seen as the front-runner.
Well, Javier Milei won the election. It's unclear whether Milei's tough talk regarding China will mean that he will not let China bail them out! " According to Reuters, "Argentinian president-elect Javier Milei has criticised China and Brazil, which are among his country's most important trading partners. A few months ago, Milei even likened the Chinese government to an "assassin" and said the people of China were "not free". Milei's tough talk on China stands in sharp contrast with a vow of cooperation by the outgoing president, Alberto Fernandez, who visited Beijing last month and hailed China as a "true friend" of Argentina."
China is South America’s top trading partner and a major source of both foreign direct investment and lending in energy and infrastructure, including through its massive Belt and Road Initiative. Can the US compete? China has surpassed the United States as South America’s largest trading partner. Beijing has also expanded its diplomatic, cultural, and military presence throughout the region. Most recently, it leveraged its support amid the COVID-19 pandemic, supplying the region with medical equipment, loans, and hundreds of millions of vaccine doses. U.S. President Joe Biden, who sees China as a “strategic competitor” in the region, has pledged greater economic cooperation with Latin America, but some analysts argue the United States should be doing more.
But will the US do more? It can't even get modest amounts of aid for Israel and Ukraine passed by the Republican controlled House of Representatives. The Trumpist American Firsters don't want to spend money on other countries. However, they don't mind the trillion dollar military-industrial complex budgets. They are baked in the cake especially because all the financial and economic incentives align for the various interests. Lobbyists will make sure there is no reduction in that budget.
But China’s push comes as American wars overseas, unstable foreign policy election-to-election, and deep political polarization have intensified questions about US global leadership. Meanwhile, pressing issues like climate change, Russia’s war in Ukraine and Israel’s assault on Gaza have sharpened discussion over whether the West is taking the right approach to respond.
All this coincides with longstanding calls from countries across the developing world for an international system where they have more say.
Many of those countries have substantially enhanced their economic ties with Beijing during Xi’s rule, including under a decade of his up to $1 trillion global infrastructure building drive, which leaders gathered to celebrate last month in the Chinese capital.
Economics tends to transcend politics in international relations. Up to now the economic success of the west and in particular the United States has exerted a pull on countries around the world. However, it can't be ignored that currently China is outpacing the US with its investments in other countries particularly with its Belt and Road initiative. Its alternative vision for economic development is very appealing. Its live and let live policy regarding lecturing other nations on their internal political systems also is seen by many as a refreshing alternative to the US' insistence that other countries should structure their political systems similarly to the US'.
