The China Signal - February 19
Hospital diplomacy in Argentina, China's soft power, and the troubled history of the China-Venezuela relationship
G’day, and welcome to The China Signal! This week is lighter on breaking news, but heavy on broad and ongoing trends between China and the region. On the former, this week Argentina’s military received a mobile hospital from China. On the latter, you have analysis on recently published reports on China’s soft power in the region; a broad overview of the China-Argentina relationship; the failure of the Brazil-China Fund to finance a single deal since inception; an overview of the Lithium Triangle; and a blow-by-blow account of Venezuela’s fraught dealings with China a decade ago, that still colour the relationship today.
Please continue sharing your observations from your own vantage points - it has been very valuable engaging with many of you over the past few weeks.
Defense
Argentina 🇦🇷
~Paraphrased Translation~
First mentioned in TCS January 22, Argentina’s armed forces received a relocatable hospital donated by China as part of covid relief efforts. This is the second mobile hospital the army has received from China. The first was donated in 2017 as part of the two nations’ “comprehensive strategic partnership”, negotiated under former president Mauricio Macri.
The mobile hospital consists of 13 parts, transported by trucks, and includes an operating room, laboratories, radiology facilities, a water plant, four patient rooms, 90 portable radios and 15 backpack radios.
La Embajada de la República Popular de China en Argentina informó de la llegada del segundo hospital reubicable donado por el país asiático a las Fuerzas Armadas Argentinas, que tendrá como destino la dotación de Sanidad del Ejército Argentino.
Este centro de salud móvil, Kangfei modelo BLAT30EX14V, está integrado por 13 módulos con sus respectivos camiones de transporte. El equipamiento consiste en quirófano, laboratorio, radiología, planta de agua propia y otros servicios médicos. A su vez, se recibieron cuatro carpas para sala de pacientes, 90 radios portátiles VHF y 15 radios de mochila VHF.
Este el segundo hospital donado por China que recibe la fuerza, el anterior fue donado en 2017. Esta donación se da en el marco de un proyecto de asociación estratégica integral entre Beijing y Buenos Aires. Las tratativas para la cesión comenzaron durante la gestión del expresidente Mauricio Macri.
Diplomacy
New Reports
“The art of making friends - How the Chinese Communist Party seduces political parties in Latin America” - Dialogo Politico (written by Juan Pablo Cardenal) - February 12, 2021
Thanks to Inga von der Stein of the Konrad-Adenauer-Stiftung (KAS) foundation in Germany for sharing.
The paper explores how the Chinese Communist Party influences political leaders and political parties in Latin America. These methods are similar to the CCP’s party-level engagement in other regions, however Cardenal makes the good point that Latin America could be particularly receptive to the CCP narrative of China’s “economic miracle” of rapid development, and their ability to do so under an authoritarian political system.
Cardenal and other recent reports (mentioned below) have done an excellent job at introducing this topic to the region. I’d like to see further analysis of measurable outcomes of the CCP’s strategy. Yes, the number of CCP engagements has increased with certain Latin American countries in recent years, against the base line of what other countries? Has their increased engagement actually influenced policy outcomes? I appreciate that it’s difficult to show causality, however a cross-examination of changes in pro or anti-China statements from political leaders, legislation, media coverage, BRI activity, or investment decisions could add further weight to assess the contribution of China’s regional engagement.
This is a much deeper question, but ultimately one that could provide a deeper understanding of how China’s growing political engagement interacts with Latin America’s own state interests, how third countries should position their own regional engagement accordingly, and how private firms can adjust and tailor their own “corporate diplomacy” in Latin America, where Chinese firms are often a major competitor.
On the CCP’s main forms of engagement with the region:
The CCP’s institutional relations with its Latin American counterparts are mainly channeled through delegations of political party members making visits to both sides of the Pacific, as well as by invitations to travel to China with expenses paid. It was also a Chinese initiative to organize conferences and seminars on priority issues on Beijing’s agenda, reciprocally attend each other’s party congresses and promote the training of young Latin American leaders and cadres in China, also with Chinese funding. In the context of COVID-19, most of these initiatives have been replaced by virtual bilateral or multilateral meetings, which have increased in frequency and in the number of participants. [p. 5]
That is why the Asian giant is perceived by the Latin American economic and political elites not only as unavoidable but also as a source of opportunities that others cannot offer. [p. 6]
Cardenal rightly notes the shallow understanding of China of many of the region’s elites:
The Latin American political class’ honeymoon with its Communist counterparts is not unrelated to the ignorance of the regional elites, with a few exceptions, regarding China, its history, its State capitalism and development model and the nature of the CCP’s modus operandi. This knowledge gap provides the CCP with the opportunity to monopolize the narrative of today’s China with little interference. They disseminate it through an ambitious program of visits so that the regional political leaders receive training in China. [p. 8]
In Latin America and the developing world, and even in certain areas of the West, there is no shortage of elites who see clear evidence in the modernization of China over the last 40 years that development without democracy is possible. Added to this idea is the perception that democracies are not proving able to provide answers to the challenges of our time. [p. 11]
Conclusions
It has been mentioned previously that public opinion in Latin America has a far less friendly view of China than the regional elites do. However, this has not prevented China from having achieved certain success in its strategy of seducing regional elites. These elites have been convinced not only of the positive effects of the strength and attributes of the Asian giant without paying due attention to the side effects, but also of the core idea - elevated to the category of dogma - that the political climate must be optimal for Beijing for the business relationships to bear fruit.
In order to persuade the political class, the CCP leaders have been especially adept at adopting attractive positions both on the left and on the right of the ideological arc, thereby building their influence in the region without much resistance. All of this occurs in a context of political parties’ crisis of representation and loss of relevance in Latin America, where the so-called new politics is increasingly linked to specific actors and individuals rather than to party platforms.
This piece should be read in conjunction with Claudia Trevisan’s report for CFR that I covered in TCS January 22, featured in a podcast this week, and Margaret Myers’ report on China’s diplomatic engagement at the sub-national level throughout the region, analysed in TCS December 11. At a deeper level, the West’s growing awareness of China and the CCP’s diplomatic strategy in recent years traces to Professor Anne-Marie Brady’s analysis of China’s political influence activities in New Zealand and Australia, published in 2017. Brady’s analysis caused a stir in Australian political circles, and came at a turning point in the Australian public and business elite’s awareness that China’s deepening economic relationship with Australia was accompanied by a diplomatic strategy often at odds with Australian values and interests.
Yet a country’s “soft power” success or lack thereof is only one of many factors driving a bilateral relationship. A negative perception may sour public and political attitudes towards a country, but economic reality often overrides this. Look at the Australia-China and U.S.-China economic relationships through 2019-2020, which on a number of levels deepened, despite the soured diplomatic relationship. The Brazil-China economic relationship is another example to the region, which, despite Bolsonaro’s bellicose rhetoric, has also deepened, complimented by a growing reliance on Chinese vaccines to stem the toll of the pandemic.
Finally, I’d note that not all soft power engagement is equal. Some of China’s soft power engagement globally and in Latin America in 2020 was defensive, actively countering its reputational fall out as the covid-19 pandemic spread globally. At its most aggressive this took the form of “wolf warrior diplomacy”. This form of engagement is damage control, and not necessarily reputation building.
This briefing also covers the CCP’s International Liaison Department, which the above report details in section 5 of its own report (referring to it as the International Department).
Although the ILD’s contacts with LAC countries are less frequent than its contacts with other regions of the world, the LAC is a target for China’s long-term global strategy to cultivate relationships with current and emerging local leaders.[5] Between 2002 and 2017, the ILD held nearly 300 meetings with 74 different political parties in 26 countries in LAC.[3] In some cases, the ILD provided a channel through which the CCP could engage indirectly with LAC governments before they had granted diplomatic recognition to the PRC.
The ILD’s work to “tell the China story well” appears to resonate among at least some leaders in LAC. For instance, Venezuelan Foreign Minister Jorge Arreaza said that “the role that China plays in diplomacy, in the geopolitics of peace, is fundamental” after a January 2020 meeting with the ILD in China (Latin American Herald-Tribune, January 16, 2020). Because the ILD’s meetings with foreign diplomats are relatively infrequent and discrete, they draw little attention in local press and rarely attract criticism. Thus, the ILD allows the CCP a relatively unchecked means for engaging with and influencing LAC politics.
What is perhaps most striking about the ILD’s activities in LAC is the variety and range of political parties with which it engages. ILD meetings have included mainstream political parties in countries considered strong U.S. allies, such as Colombia’s Democratic Center Party (Partido Centro Democrático), as well as staunch critics, such as members of Nicolas Maduro’s United Socialist Party in Venezuela (Partido Socialista Unido de Venezuela). It appears the role of the ILD is to facilitate relationship building and maintain strong party ties for the PRC to achieve a broad set of strategic and geopolitical goals in LAC. Such goals range from winning contracts for development projects to cultivating support for the PRC’s propaganda, as well as intelligence gathering and outright support of authoritarian regimes.
In Colombia, a traditional U.S. ally in LAC, the PRC had long failed to break into the country’s business climate in a meaningful way compared to its robust presence in Brazil or Chile (Xinhua, October 18, 2019). ILD Vice Minister Li Jun (李军) met with Nubia Martinez, the national director of current President Iván Duque’s Democratic Center Party, in 2018 to discuss the “complementary” nature of the Chinese and Colombian economies. A meeting readout focused on forging greater development ties between the two countries (ILD, November 19, 2018). During his first year in office, President Duque visited Beijing seeking increased Chinese investments and pledging to “further step up bilateral ties” (Xinhua, August 1, 2019).
Less than one year later, Bogotá awarded the contract for its metro—a project nearly 80 years in the making—to a consortium of Chinese state-owned enterprises led by China Harbor Engineering Company (CHEC) (China Daily, October 22, 2019; Metro de Bogotá, October 21, 2020).[6] In February 2020, the state-owned Zijin Mining Group Company began production at the Buriticá gold mine after purchasing it from the previous owner in December—and following a decade of stopped work due to local delays (Zijin Mining, October 25, 2020). While it is unlikely that the ILD played a part in local and provincial-level contract negotiations, its meetings with the ruling party no doubt lubricated such agreements and helped Chinese companies to quadruple their presence in Colombia in just four years.
Argentina 🇦🇷
On the political, economic, and geopolitical advantages of Chines-Argentine engagement:
For China, Argentina offers a combination of benefits and access that no other populist (or non-populist, for that matter) regime in the hemisphere can match. On one hand, the nation possesses substantial natural resources, including strategic minerals such as lithium (plus traditional ones such as iron and copper). Similarly, the pampas are an important supplier of soy, pork, and other agricultural inputs important to feeding China’s 1.4 billion people. Reciprocally, Argentina offers a substantial middle-class market to purchase high value-added Chinese goods and services, and access to even larger markets through its membership in the regional trade organization MERCOSUR. Argentina’s diversified economy includes sophisticated manufacturing, services, and technology sectors, with which PRC-based firms can partner to absorb technologies and refine their product and service offerings.
Argentina’s geographic position is close enough to the United States to be strategically relevant to it, yet far enough away for PRC commercial and other activities there to appear only moderately threatening.
Diplomatic signalling:
The PRC is one of only three foreign governments (along with Russia and Cuba) with respect to which Vice President Fernández de Kirchner has manoeuvred to install a personally-loyal ambassador to manage the relationship. In the case of China, she selected Sabino Vaca Narvaja,son of one of the founders of the leftist Montoneros guerilla movement of the 1970s, and the uncle of her grandchild. The Argentine government also assigned an officer with the rank of general to serve as its defense attaché in the PRC, a level of seniority previously reserved exclusively for its defense attaché to Washington, D.C.
The second half of the article is an extensive overview of the breadth of the relationship over the last ten years. It’s well worth reading for some deeper background in your areas of interest.
Deals and Investments
Brazil 🇧🇷
Announced with great fanfare six years ago, the Brazil-China Fund has not yet financed a single project with the $20 billion it has available. Fluctuating exchange rates, a high degree of bureaucracy and scant interest from the Brazilian government prevented the fund from attracting market interest, analysts say.
The fund was only officially incorporated two years after its announcement [2015] and foresaw a contribution of US$15 billion by the Chinese fund for financing in Latin America (Claifund), which was established at the same time, and another $5 billion from Brazil’s Federal Savings Bank or national development bank BNDES.
Venezuela 🇻🇪
Dialogo Chino, Armando.info, and the Latin American Centre for Investigative Journalism (CLIP) have collaborated to publish a series of articles on the China-Venezuela relationship, after the latter two organisations received and analysed hundreds of documents covering the relationship from 2007 to 2012.
Official government spokespersons have always presented the relationship as advantageous for Venezuela, but these documents, which include project reports, memos between ministries, correspondence and payment orders, portray a Venezuelan administration that was enthusiastic but inefficient and disorganised. It was seemingly incapable of channelling Chinese financial support that was pragmatic but not always advantageous for Venezuela.
The progress of many of these projects has been underwhelming at best. With the partial exception of the launch of the Simón Bolívar, Francisco de Miranda and Antonio José de Sucre satellites (the first of which lost communication last year), cooperation between China and Venezuela left millions of dollars worth of disappointments. They include an abandoned railway system, the convoluted purchases of military aircraft and household appliances, and even an office that cost more to build than many of the projects put together.
The first article details China’s USD $1 billion loan to Venezuela in 2009, repayable via the sale of almost 43 million tones of Venezuelan iron ore to China’s Wuhan Iron and Steel Corporation (Wisco). At the time the deal was inked, this iron ore had a market value of approximately USD $4.2 billion.
The second article recounts China’s sale of eight military transport planes in 2011, which was beset by exchange rate manipulation and a cushy margin for “secret expenses”.
Venezuela bought Chinese planes at a price no one understood - Dialogo Chino - February 17, 2021
Argentina 🇦🇷
In TCS February 5 I highlighted the MOU signed between the Argentine Government and Jiangsu Jiankang Automobile to boost the country’s electric vehicle industry. Argentina intends to industrialise its lithium reserves, with Jiangsu Jiankang Automobile promising to build lithium battery and urban bus factories to supply electric vehicles to Argentina and neighbouring countries.
The Americas Society published a useful “explainer” of the so-called Lithium Triangle between Argentina, Bolivia, and Chile, which together hold over 50% of the planet’s lithium deposits.
