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2 Feb 2025 11:53
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  •   Home > News > International

    Top US diplomat seeks to counter China's growing influence in Latin America

    In his first visit to Panama and other Latin American countries as US secretary of state, Marco Rubio is seeking to counter Chinese influence in the region.


    In his first visit overseas as US secretary of state, Marco Rubio is seeking to send a message.

    Mr Rubio is travelling to Panama, Guatemala, El Salvador, Costa Rica and the Dominican Republic this week.

    "Part of this trip is about countering China," his spokesperson Tammy Bruce told Fox Business.

    It's an overt admission, and something that is usually thinly papered over with more diplomatic language about strengthening ties.

    But China's economic influence has steadily grown in resource-rich Latin America over the past two decades, and it is a cause for concern for the new Trump administration.

    So what does China's influence in Latin America look like, and are there any parallels to be drawn with Australia and the Pacific?

    Tensions swirl over Panama Canal

    Panama — the first stop on Mr Rubio's trip — has become a flashpoint since US President Donald Trump falsely claimed that China was effectively operating the Panama Canal.

    "We didn't give it to China, we gave it to Panama. And we're taking it back," Mr Trump said in his January 20 inaugural address.

    The canal, which links the Atlantic Ocean to the Pacific, was built and owned by the US until a 1977 treaty allowed for its handover and it came under the control of the Panama government in 1999.

    A Hong Kong-based company operates two of the five ports along the canal, but both the Panama government and Chinese foreign ministry deny China owns the waterway.

    But Mr Rubio, a long-time China hawk during his Senate career, said: "They have to do whatever the [Chinese] government tells them."

    "And if the government in China in a conflict tells them to shut down the Panama Canal, they will have to," Mr Rubio said on the eve of his trip.

    "And, in fact, I have zero doubt that they have contingency planning to do so. That is a direct threat."

    Concerns about risks were echoed by Mauricio Claver-Carone, the US special envoy for Latin America.

    "This increasingly creeping presence of Chinese companies and actors throughout the Canal Zone, in everything from ports and logistics to telecommunications infrastructure and otherwise, … is very concerning, not only frankly to the national security of the United States, but frankly to the national security of Panama and to the entire western hemisphere," he said.

    Euclides Tapia, professor of international relations at the University of Panama, said Mr Trump's real goal was "for Panama to reduce its relations with China to a minimum".

    Infrastructure and 'dollar diplomacy'

    While Panama is a focal point, China's presence in the region spreads far beyond it.

    Adrian Hearn, a professor at Melbourne University and the co-author of China Engages Latin America, said relations between the two nations reflected "deepening economic, educational and diplomatic ties".

    "In less than two decades, China has transformed from a minor player in the region to the first or second-largest trade partner for most its countries, as well as a leading investor," he said.

    "Political actors in DC hold a wide range of opinions toward China's activities in Latin America, from strategic competitor to potential collaborator, but over the past decade attitudes have edged toward rivalry."

    Panama cut ties with Taiwan in 2017 and established diplomatic relations with China, and the following year it became the first country in Latin America to sign up to the Belt and Road Initiative (BRI).

    The Dominican Republic and El Salvador also switched their diplomatic allegiance from Taipei to Beijing in 2018, followed by Nicaragua and Honduras in 2021 and 2023 respectively, and some 20 countries in Latin America and the Caribbean have signed up to the BRI.

    The significant investment and diplomatic switches have prompted Taipei to dub the process "dollar diplomacy".

    According to the World Economic Forum, Chinese trade with Latin American countries increased 26-fold from $US12 billion to $US315 billion ($19.3 billion to $507.3 billion) between 2000 and 2020, and there are predictions that number could more than double by 2035.

    "Chinese enterprises and banks have indicated their readiness to invest in projects that support Latin American manufacturers of cars, mobile phones, clean energy infrastructure, and other value-adding products," Professor Hearn said.

    A recent case in point was the $US3.5 billion megaport in Peru, inaugurated by Chinese President Xi Jinping last year and majority owned by a Chinese state company.

    Professor Hearn pointed out that while China's economic presence in the region was significant, that was not the case in the military space.

    "Chinese military cooperation with the region in particular lags far behind that of the US," he said, adding there were 76 US military bases across Latin America and the Caribbean, "while China has no such installations in the region".

    'Backyard' comparisons

    Professor Hearn said Chinese diplomats habitually referred to Latin America as the US "backyard" — a term Latin Americans were not fond of.

    But the strategic intent was clear, he said: "To signal to Washington that China recognises the US sphere of influence."

    But observers in recent years have reflected that the region has been somewhat "taken for granted" by the US.

    "The Latin America of today looks more like China's front garden than America's backyard," wrote Julio Armando Guzmán, a former Peruvian presidential candidate, in a piece for Time Magazine in 2023.

    While the contexts are different, there are some parallels to be drawn between Australia and its relationship with the Pacific.

    Pacific leaders too have taken issue with the concept of being "Australia's backyard" and have also accused Australia of taking the region for granted.

    And China's significant economic investment and security agreements in the Pacific have been a cause for concern among some in Canberra.

    Similarly to the Caribbean, a handful of Pacific countries have switched their allegiances away from Taipei to Beijing in recent years, with Solomon Islands and Kiribati in 2019, and Nauru in 2024.

    "Latin American efforts to balance relations with the US and China resemble those of Australia to do the same, and moreover, resemble the efforts of Pacific Island countries to balance the influences of Australia and China," Professor Hearn said.

    "The political calculus of developing nations often comes down to 'checkbook diplomacy', that is, which combination of alliances will attract the most economic aid and the best trade arrangements."

    Trump rhetoric 'unlikely to build trust'

    Like Mr Rubio, Penny Wong issued a statement during her first solo visit to Fiji as foreign minister, saying the 2022 trip showed "the importance we place on our relationship with Fiji and on our Pacific engagement".

    But unlike some of the rhetoric from the Trump administration, Senator Wong struck a different tone. "Australia will listen to our Pacific partners as we work together to face our shared challenges and achieve our shared goals — including tackling climate change, pandemic recovery, economic development and regional security," she said at the time.

    Professor Hearn said some of the statements from Mr Trump and his officials were "unlikely to build trust and may push Panama and its neighbours toward closer cooperation with China".

    Panamanian President Jose Raul Mulino has ruled out discussing control over the Panama Canal with Mr Rubio during the visit, and protesters in Panama City have burned effigies of Mr Rubio and Mr Trump.

    "Trump's comment about somehow needing to take back the canal really brings up old ghosts, the ghosts of US imperialism," said Leland Lazarus, an expert at Florida International University and the Atlantic Council.

    ABC/Reuters/AFP


    ABC




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