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1 1 (May 4, 2022)

handle is hein.crs/govehvk0001 and id is 1 raw text is: Con gressionaI Research Serv/ce informing Ih egsaive( deate sne 1914 Updated May 4, 2022 China's Engagement with Latin America and the Caribbean As the People's Republic of China (PRC) has increased its engagement with Latin America and the Caribbean (LAC) over the past 20 years, U.S. policymakers have raised questions regarding potential implications for U.S. interests in the region. China's engagement with the region has grown significantly since 2001, particularly in terms of diplomatic and economic ties. This growth reflects China's global soft power efforts and influence operations worldwide. A succession of Chinese leaders and other officials have visited the region to court governments. In turn, regional leaders and officials have frequently visited China. The PRC has signed various bilateral partnership agreements with countries throughout LAC, including comprehensive strategic partnerships with Argentina, Brazil, Chile, Ecuador, Mexico, Peru, and Venezuela. Diplomacy Beijing's diplomatic overtures in LAC underpin China's economic activities and help institutionalize China's engagement in the region and garner support in international fora. Some analysts argue that China's activities in LAC reflect a global strategy to reduce U.S. dominance, although the activities do not aim to challenge the United States directly or militarily. China's diplomatic efforts include being an observer at the Organization of American States, a member of the Inter-American Development Bank (IDB) and the Caribbean Development Bank, and a participant in the Asia Pacific Economic Cooperation forum. China has been a large supplier of Coronavirus Disease 2019 vaccines to the region, although most have been sold rather than donated. Since 2015, PRC President Xi Jinping has participated in three summits with leaders and foreign ministers of the Community of Latin American and Caribbean States (CELAC), a region-wide organization that excludes the United States and Canada. Xi addressed the Third China- CELAC Ministerial in December 2021 via video message. The meetings have promulgated cooperation plans covering politics, security, trade, investment, finance, infrastructure, energy, resources, industry, agriculture, science, and people-to-people exchanges. At the 2018 summit, China invited countries in LAC to participate in its Belt and Road Initiative (BRI), which focuses on PRC- backed infrastructure development around the world. To date, 21 countries in LAC participate in the BRI; Argentina joined in February 2022, which could pave the way for increased Chinese investment in the country. In 2016, the PRC government released its second policy paper on LAC. The paper stated China seeks to strengthen cooperation on the basis of equality and mutual benefit in several key areas, including exchanges and dialogues, trade and investment, agriculture, energy, infrastructure, manufacturing, and technological innovation. It noted that China will actively carry out military exchanges and cooperation with countries in LAC but emphasizes that China does not target or exclude any third party. Another of Beijing's apparent goals is to isolate Taiwan by attempting to lure away LAC countries that maintain diplomatic relations with Taiwan, also known as the Republic of China. Currently, 8 countries in LAC (out of 14 countries worldwide, including the Vatican) recognize Taiwan; the remaining 25 countries recognize the PRC. Panama, the Dominican Republic, and El Salvador switched recognition to the PRC in 2017-2018, and Nicaragua switched in December 2021. Honduran President Xiomara Castro stated her government would maintain relations with Taiwan for now, despite an electoral campaign pledge to establish relations with the PRC. Economic Reat'ons China's economic goals in LAC include securing access to raw materials (such as oil, ores, and minerals) and agricultural goods (especially soybeans); establishing new markets for Chinese goods, including high-value-added products; and partnering with LAC firms to access and jointly develop technology. China also has sought investment opportunities in Latin America for its infrastructure firms. Total China-LAC trade increased from almost $18 billion in 2002 to nearly $449 billion in 2021. China's imports from LAC amounted to $221 billion in 2021, consisting primarily of natural resources, including ores (42%), soybeans (16%), mineral fuels and oils (10%), meat (6%), and copper (5%). China's exports to the region in 2021 amounted to $228 billion, with major exports including electrical machinery and equipment (21%), machinery and mechanical appliances (15%), and motor vehicles and parts (7%). China has become the top trading partner of Brazil, Chile, Peru, and Uruguay and the second-largest trading partner for many other countries. China has free-trade agreements with Chile, Costa Rica, and Peru and, in February 2022, launched talks with Ecuador. According to the China Global Investment Tracker database maintained by the American Enterprise Institute and the Heritage Foundation (https://www.aei.org/china-global- investment-tracker/), which tracks transactions of $100 million or more, China's investments in LAC from 2005 to 2021 amounted to $140 billion, with Brazil accounting for $64 billion and Peru $25 billion. Energy projects accounted for 59% of investments and metals/mining accounted for 24%. The database also shows that PRC construction projects in LAC from 2005 to 2021 were valued at $66

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