The US-China Race to Domination: Latin American Harbingers

China has leapt ahead of the US in the race to global domination. Many statistics support this conclusion, but four Latin American countries offer very recent, specific examples. They serve as harbingers and also as warnings that the US needs to change its policies. 

Brazil

Brazilian President Luiz Inácio Lula da Silva and Chinese President Xi Jinping signed 15 trade and partnership agreements on May 14, 2023. 

Significantly, the agreements include the development of CBERS-6. This sixth of a line of satellites built by the bilateral partnership is especially important during this time of environmental concerns because it measures the destruction of the Amazonian rain forests. Other agreements involve cooperation in research and innovation, the digital economy, communications, and the fight against hunger.

During Lula’s visit, Brazilian businesses reached an additional 20 new agreements with China in areas such as renewable energy, automotive industry, agribusiness, green credit lines, information technology, health, and infrastructure.

Lithium Triangle: Bolivia, Chile, and Argentina

Following intense negotiations with six international companies (including two US corporations), Bolivia signed a contract to partner with the Chinese consortium CATL, the largest lithium ion battery producer in the world. This contract went beyond mining; it included a commitment for China to build lithium extraction processing plants and accompanying infrastructure in Bolivia.

Much of the world’s lithium, essential for the rechargeable batteries that fuel the energy transition and the life economy is found in what is known as the Lithium Triangle: Argentina, Bolivia, and Chile. These countries are determined to gain value-added through processing and marketing operations. 

Chilean President Gabriel Boric announced on April 21, 2023 that he will nationalize the country’s lithium industry.  As reported by Foreign Policy:

Boric argued that the country’s lithium reserves represent “an opportunity for economic development that will likely not be repeated in the short term” and that nationalizing the industry will enable the country to build “a Chile that distributes wealth we all generate in a more just way.”. . .

“This is the best chance we have at transitioning to a sustainable and developed economy,” Boric said. “We can’t afford to waste it.

The countries of the Lithium Triangle want to control their own resources and derive as much value-added as possible from them. At the same time, they recognize that they need to partner with nations that have the technology and capital to make this possible. All three share a mutual resentment of the US. A few of the many examples of more than a century of U.S. intervention in their policies: the overthrow of Chile’s democratically elected president Salvador Allende and US support of the dictator Augusto Pinochet who replaced him, the blacklisting of and role in the coup in Bolivia during the presidency of Evo Morales, support of a brutal Argentine dictatorship, the CIA’s Operation Condor that impacted all three and most of Latin America. China, on the other hand, has no history of meddling in the region’s politics and is considered a more accommodating partner. 

China already dominates global lithium markets, producing 75 percent of the world’s lithium-ion batteries, compared to the US’s 8 percent. China accounted for half of the 2021 growth in the global electric vehicle market, while the US’s share was a mere 10 percent.

What is happening in Latin America is symbolic of the changing dynamics in geopolitics. The US will be well advised to recognize that it is no longer the world’s only superpower – as it was for more than two decades after the Soviet Union’s collapse in 1991. If it wants to end its fossil fuel dependency, it needs to gain the trust of countries that have suffered the punitive policies of past administrations.  

No One Wins on a Dead Planet

During this season of US presidential campaigning, we may expect to see candidates vying to look tough on China. Such positions only weaken the US and strengthen China. Most countries in the rest of the world, including our European allies, recognize that China is on the rise. They hope to increase trade with both the US and China. They want to see these two superpowers work together to end climate change, pandemics, malnutrition, and the many other crises that threaten them. 

Ever since World War II until recently, the US has been respected as the pre-eminent global leader. The nations of Latin America are representative of those on every continent that look to the US as an example of competitive market-based capitalism, not as one that imposes economic policies and sanctions grounded in a fear that China is out-competing it. Other countries expect the US to lead the world to a peaceful transition from a degenerative economic system that is consuming and polluting itself into extinction, a death economy, into a regenerative one that pays people to clean up pollution, rejuvenate destroyed environments, recycle, and develop technologies that enhance life, a life economy.   

Most importantly, Washington needs to stop treating the US-China relationship as a new Cold War and recognize that although the two countries can disagree on many issues, we must agree that no one wins on a dead planet. Ajay Banga, President Biden’s recent (and only) nominee to lead the World Bank, offers hope. When asked whether he sees the World Bank and its US-supported affiliates as competing with BRICS, AIIB, and the other China-supported international banks, he responded, “I don’t think we should view ourselves as competitors with any of the multilateral banks or countries.” He went on to explain, “We don’t have the time to play in silos. . . . The scale of these challenges requires trillions, not billions [of dollars].”

Written by John Perkins.
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