Viewpoints on Energy, Geopolitics, and Civilization
Mac Margolis/Bloomberg: China Laps the U.S.
in Latin America with Covid Diplomacy
Elbow bumps and face masks.
Empty embassies and shipments of discredited drugs are no match
for vaccine partnerships and investment promises.
Long before the novel coronavirus hit Latin America, the United States was losing ground in its own hemisphere to Chinese lenders and deal-makers. The pandemic has only highlighted China's advantage, as Beijing extends its reach in the Americas through a mix of market grabs and medical diplomacy.
Timing has helped. China confronted and largely contained the spread of Covid-19 weeks before the virus made landfall in the U.S. That gave China precious time to study the outbreak and deploy experts and equipment abroad. Shipments of masks, respirators and epidemiological counsel arrived as nations in Central and South America and the Caribbean were slammed by their own gathering crises.
The goodwill also helped Beijing redeem its international reputation, which sank after Chinese authorities were accused of suppressing and then mishandling the initial outbreak. Yet it's hard to escape the conclusion that the U.S.'s wan response to the global crisis was at least partly self inflicted.
The U.S. has no ambassadors in Bolivia, Chile, Guatemala, Honduras, Panama, Peru and Venezuela, all countries where the health-driven economic collapse has worsened hardship and threatened lives. The empty U.S. chair at the Organization of American States and atop the State Department's Americas bureau are telling metaphors for the fading U.S. brand in the hemisphere, where the Trump administration's priorities have been locking down borders against undocumented migrants and narcotics. U.S. foreign aid in the region has plunged , further eroding U.S. standing .
Washington is not indifferent, and has sent cash and supplies south as the pandemic widens. Those gestures are welcome but seem timid before China's opportunistic disease diplomacy. (For those keeping score, the Wilson Center has a running comparative tally .)
If anything, China is doubling down on its decade-old play for regional assets and allies by pushing the Belt and Road investment strategy deep into the Americas. Its Latin American diplomats have become more visible on social media . Back home, demand for Spanish and Portuguese classes is booming . A conference celebrating 45 years of Chinese-Brazilian engagement, held in Rio de Janeiro last year, was crawling with so many Chinese executives and diplomats that I couldn't find a seat in the main auditorium. “China knows exactly what it wants from Latin America. It's about time Brazil and its neighbors returned the favor,” said Luiz Augusto de Castro Neves, Brazil's former ambassador to Beijing and chairman of the China-Brazil Business Council.
Such bonhomie might seem out of synch in Brazil. Since he took office in January 2019, Brazilian President Jair Bolsonaro, Latin America's leading Trump booster, has rarely missed an opportunity to diss China. His handlers have had to work hard to contain outbreaks of Sinophobia among top Brazilian officials — decrying the “Communavirus” or mocking oriental accents — even as ships ferrying Brazil's bounteous grain harvests steam east toward its largest trading partner.
China has bristled at such slights but stopped short of retaliation. Indeed, if anything it has leaned in as the outbreak worsens . It quickly shipped protective equipment, respirators and test kits to Brazil and the region, including sending dozens more mechanical ventilators than the U.S. to Mexico.
Even more emblematic of the lopsided hemispheric strategy is China's cross-border bet on a vaccine. On June 11, the state of Sao Paulo announced a partnership between Chinese pharmaceutical company Sinovac Biotech Ltd. and Brazil's Butantan Institute, a biomedical research center, to roll out a final, phase 3 trial of a Covid-19 vaccine.
This wasn't an angel investment. The Chinese drug maker needs an active infection to run the inoculation trial and win the global sweepstakes for a potentially game changing — and market-beating — medical breakthrough. With its unabated contagion but also a track record in vaccine research, Brazil makes an ideal proving ground. (For the same reason, Oxford University also picked Brazil for its own vaccine trial .) What makes China's initiative all the more appealing is the prospect of transferring its vaccine technology to Brazilian researchers, a qualitative policy leap beyond mask diplomacy.
Compare the vaccine pact with Washington's headline Brazil initiative: a donation of 2 million doses of hydroxychloroquine , the anti-malaria and lupus medication which early research touted briefly, and Trump loudly, as a breakthrough drug. Never mind that the U.S. Food and Drug Administration recently revoked its authorization for emergency use of HCQ for treating Covid-19 and the National Institutes of Health on June 19 shut down clinical trials for the drug, citing “no benefit” to hospitalized patients.
Beijing is pushing its medical advantage beyond Brazil. If Latin Americans once bought into Washington's script of China as an economic predator and public health villain, the spreading virus and its attendant economic ruin appear to have changed the narrative.
Chinese President Xi Jinping recently reached out to Ecuador's President Lenin Moreno, whose nation is doubled over by debt and Covid-19. Better terms for Ecuador's outstanding loans and new money were on the table. Chile, Colombia, Panama and Peru have consulted Chinese health officials on how to contain coronavirus. In mid-April, China sent back an Aerolineas Argentina flight packed with medical equipment as Argentina faced the pandemic and angry foreign creditors. Private donors including Alibaba, Huawei, Lenovo and ZTE, unaccustomed to western-style corporate philanthropy, have also stepped up .
No doubt Beijing is trying to strengthen its own geopolitical agenda. Since 2017, Panama, El Salvador and the Dominican Republic have all forsaken relations with Taiwan, presumably for the sugarplums of China's heralded Belt and Road portfolio. Even Taipei stalwart Paraguay is wavering before Beijing's advances. Between 2005 and 2019, China poured more than $140 billion into state-sponsored finance to Latin America, according to the U.S. Congressional Research Service.
Keeping that largesse flowing will be more difficult as China's economy slows and its global investors turn inward to tend domestic needs. “China has made it clear though its medical diplomacy that it is still very interested in pursuing the Belt and Road agenda in Latin America,” Margaret Myers, who tracks China's relations in the region for the Inter-American Dialogue, told me. “Whether or not those deals materialize is another matter. It's a question of finance, and finance may be scarce.”
Distressed nations need all the assistance they can muster, no matter what flag the benefactors fly. With the impending U.S. presidential election on top of the Trump's administration's chronic foreign policy attention deficit, China may be well placed to hone its diplomatic edge in the Americas.
Castro Neves, the former Brazilian diplomat, sees opportunity in the emergency, as long as national leaders undergo some self-healing. “China is in the process of shifting its development model, from investment and exports to consumer goods and the internal market,” he said. “That's an opportunity for our goods and services, but only if we improve competitiveness through tax reforms, fiscal consolidation and opening up one of the region's most closed economies.”
One day, the pandemic will pass. Without deep and disruptive reforms, however, the underlying conditions that chronically burden the lives and livelihoods of Brazilians and others in the hemisphere will not
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Mac Margolis is a Bloomberg Opinion columnist covering Latin and South America. He was a reporter for Newsweek and is the author of “The Last New World: The Conquest of the Amazon Frontier.” Petroleumworld reprint this article in the interest of our readers.
Editor's Note: This article was originally published by Bloomberg News, on June 24, 2020. All comments posted and published on Petroleumworld, do not reflect either for or against the opinion expressed in the comment as an endorsement of Petroleumworld.
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