Competition Strategies in Latin America and the Caribbean: How China Utilizes Multilateral Organizations to Gain Influence within Forums

In recent years, China has been actively engaging with various multilateral political, economic, and other institutions in Latin America. This engagement, primarily economic in character but strategically significant, has not yet received the level of detailed analysis it warrants.

The People's Republic of China (PRC) has been an active observer in the Organization of American States (OAS) since 2004. Similarly, the PRC has established a "co-financing fund" with the Inter-American Development Bank (IADB) in 2013. The PRC's objectives in its multilateral engagement in the region include preventing institutions from taking positions or actions adverse to its interests.

One notable example of this co-financing is the memorandum of understanding signed in 2017 between the Export-Import Bank of China and the China Development Bank (CDB), aiming to collaborate on framing development projects in the region and co-financing them.

The PRC's multilateral engagement in Latin America extends beyond the OAS and the IADB. It has engaged with a range of institutions, including the United Nations, the International Monetary Fund, the World Bank, the Asia Infrastructure Investment Bank (AIIB), the Organization of American States, CELAC, and others.

The AIIB, which supports the Belt and Road Initiative, has five Latin American members, with three more prospective members. However, these eight represent less than half of the nineteen Latin American states that have signed onto BRI. Only one of 206 projects contemplated by the AIIB has involved Latin America as of 2022.

China's role in CARICOM, where five of the eight Western Hemisphere countries that continue to recognize Taiwan are found, gives it opportunities to promote its commercial projects and presence in a region of strategic significance. CELAC (Community of Latin American and Caribbean States) is a regional forum that the PRC has engaged with to support Chinese national objectives and those of Chinese companies in the region.

The Summit of the Americas in Los Angeles was a push by Washington to showcase the importance of multilateral forums in Latin America and the Caribbean. The recent summit was primarily focused on crafting a coordinated agenda for the region and showcasing the numerous points of weakness in Washington's regional engagement.

Dr. Evan Ellis, a Latin America research professor at the US Army War College Strategic Studies Institute, calls for the United States to recognize China's engagement with multilateral institutions in Latin America and the Caribbean as one element of its multidimensional efforts to advance its strategic position in the region.

The utility of the BRICS forum could expand again if Luiz Inácio Lula da Silva is elected to return to the Presidency in October 2022. As of January 2022, $5.2 billion in loans had been approved by the New Development Bank for projects in Brazil.

However, the United States must play an active role in these multilateral institutions where it has membership, working to identify and push back against inappropriate attempts by the PRC to exert influence over the positions of those institutions and their analytical products, or to co-opt those institutions for the benefit of PRC-based banks and companies, and the Chinese state.

US Ambassador to Mexico Ken Salazar stated that it's better for the US to have a supply chain in the Americas rather than being dependent on a supply chain that comes from China. This sentiment underscores the need for the United States to maintain a strong presence and influence in multilateral institutions in the region.

Competition Strategies in Latin America and the Caribbean: How China Utilizes Multilateral Organizations to Gain Influence within Forums