The People’s Republic of China has become a major investor, lender and actor across the energy sector in Latin America and the Caribbean. Indeed, loans and investments from China have financed an impressive array of projects in infrastructure, energy and mining.
With more than $58 billion invested between 2000 and 2019, China has clearly staked a claim in Latin America’s energy sector. In 2020, Chinese M&A deals in Latin America and the Caribbean energy reached $7.7 billion, according to Bloomberg, or 25% of Chinese acquisitions worldwide.
With the contours of the global energy transition and increased attention on reducing emissions and climate action spurring huge growth in renewable energy, China has flexed its muscles in that segment of the global energy sector and in Latin America and the Caribbean. China’s growing presence in Latin America presents challenges to the United States, which the new Biden administration must address. A new administration together with Democratic majorities in both houses of Congress provides an opportune moment to reset. Indeed, the new administration has an opportunity to counter China and strengthen US-Latin America relations by encouraging private investment, particularly in mining, clean energy and infrastructure projects.
Cecilia Aguillon, Energy Transition Initiative Director and Jeremy Martin, Vice President, Energy & Sustainability at the Institute of the Americas present an overview of the latest Energy & Sustainability program’s report followed by a discussion panel with Matt Ferchen, Head of Global China Research at Mercator Institute for China Studies and Michael Davidson, Assistant Professor at the School of Global Policy and Strategy at UCSD.
Watch China Stakes its Claim in Latin American Energy: What it Means for the Region, the US and Beijing.
As the former Pacific Fleet Commander for the US Navy, Admiral Scott Swift has spent many years evaluating the United States’ strategy with China. In his view, the US has more in common with China than we have in competition, and competition is not always a bad thing. What does concern him is the erosion of the rules-based global order. Swift defines this global order as a set of rules established at multiple international conferences following WWII, and the institutions created to defend and update those rules, such as international courts.
Swift points to the Scarborough Shoal Standoff as an example of China defying the rules-based global order. In 2012, China and the Philippines got into a dispute over the rights to the Scarborough Shoal, a chain of reefs in the South China Sea. The dispute landed in an international court, which sided with the Philippines. However, China refused to recognize the court’s authority. Swift says China’s defiance sets a dangerous precedent.
As China continues to take its place on the global stage, Swift says one key to maintaining the global order is for the Unites States to develop a grand strategy. He says the key is starting with a broad vision of ourselves and our place in the world. Swift suggests taking inspiration from documents like the Constitution, the Bill of Rights, and the Declaration of Independence and using language as broad as “we hold these truths to be self-evident.” From there, we can develop regional strategies, and ultimately policy to implement those strategies. But, Swift says before we do that, we have to fix the way we currently do things.
Watch U.S. and Chinese Grand Strategy and the Remaking of the Rules-Based Global Order – Herb York Memorial Lecture