How China surpassed the US to become Latin America's largest trading partner

 How China surpassed the US to become Latin America's largest trading partner

Over the past two decades, as the US has been busy in the Middle East, China has become Latin America's largest trading partner by building a bottom-up relationship.

Located deep in mainland Argentina, Mario Pizarro's office looks like a Chinese temple. It is decorated with a photo of a Chinese farmer with Mr. Pizarro. The space also has a statue of Buddha with a green robe, a wind turbine model of a Chinese company with the words in English and Chinese: "Together to create our future".

Pizarro, 62, is the energy secretary of Jujuy, a province high in the Andes bordering Bolivia and Chile. Overlooking the river, his office building is ordinary, even shabby, but the projects he and his colleagues oversee are different.

Chinese technology and money helped build one of Latin America's largest solar plants in Jujuy. Here, hundreds of thousands of panels cover the desert like giant dominoes. Chinese security cameras guard government buildings across the provincial capital.

Noisy servers in a Chinese data storage factory. Beneath the remote hills and vast salt lakes lie veins of copper, lithium and zinc. They are the raw materials of 21st century technology, used by China to make electric vehicle batteries.

Total trade turnover of some Latin American countries with China (blue) and the US (orange) 2020. Graphics: Bloomberg

Total trade turnover of some Latin American countries with China (blue) and the US (orange) 2020. Graphics: Bloomberg

It's no secret that China has been pouring resources into South America this century, breaking America's historic dominance and becoming the number one trading partner there. In recent years, international attention has focused on Chinese business ventures in Africa and Asia. But an important shift in its approach to Latin America has gone unnoticed.

Instead of focusing on national leaders, China and its companies decided to build relationships here in a bottom-up manner. In 2019 alone, at least 8 governors and 4 provincial deputy governors in Brazil went to China.

In a speech in September 2019, Zou Xiaoli, China's Ambassador to Argentina, said his country's infrastructure promotion was helping to enhance Latin America's position in the global commodity market. "China will strongly support Argentina's economic and social development," he said.

Argentina's Jujuy province, for example, is nowhere near too far away from China's attention. Gabriel Márquez, CEO of a lithium research and development center in Jujuy, exaggerates this: "You have a poor governor from Argentina who has Xi Jinping's phone number."

Recently, the US has been trying to keep its footing, in part by emphasizing the risk of buying technology from state-controlled companies that could be used for civilian and even military purposes such as espionage. For example, in Patagonia, southern Argentina, a Chinese company built a space mission control center.

However, according to Cynthia Arnson, Latin America program director at the Wilson Center (Washington), that kind of anxiety has not discouraged local governments. In San Salvador, the provincial capital of Jujuy, officials told Mr. Pizarro that a 300-megawatt solar park was once a utopia, now a dream has come true. There seems to be no limit to increasing solar and lithium production through Chinese investment.

Latin America has long been home to great powers. In the 15th and 16th centuries, Spain and Portugal came here to exploit the colony. After the revolutions in the 19th century to form independent nations, Washington enacted the "Monroe Doctrine", which required European powers to consider the Western Hemisphere as America's sphere of influence. In the 1980s, Washington supported coups and sent troops to its southern neighbors. This intervention aroused anti-American anger, creating opportunities for China.

Over the past two decades, as the United States has focused on the wars in Afghanistan and Iraq, China has moved into the Western Hemisphere with remarkable speed. Much of Chinese investment began earlier this century during the so-called "pink tide," when leftist parties came to power in Argentina, Bolivia, Brazil, Ecuador and Venezuela.