What kind of web is China weaving around America, will the dragon swallow South America like Sri Lanka-Pakistan?

New Delhi: Unlike the rest of the world, China is quietly expanding its presence in South and Latin America these days. Recently, China’s presence was seen in Peru, Brazil, Venezuela and Ecuador when it came to light about China’s huge investments in these countries. South and Latin America are located on the world map, very close to America. It is believed that China is trying to surround America from all sides under the pretext of investment. This move of China is called debt trap diplomacy. America itself is in tension regarding this. Let us understand this entire illusion of China.

Dragon in the Pacific Ocean off Chancay port, Peru

Chinese President Xi Jinping inaugurated Peru’s Chancay port on November 14 and described it as a new beginning for a new ‘land-sea corridor’ between China and Latin America. This project is being funded under China’s Belt and Road Initiative (BRI). This project is worth 3.6 billion dollars, which has increased the concern of America, because China’s arrival in Peru means that China’s presence in the Pacific Ocean will become easier.

China has 60 percent share of the port

Chancay, located 78 km north of the Peruvian capital Lima, is a small fishing town with a population of about 60,000. It is a natural deep water port. China began construction in 2019, with China Ocean Shipping Co., or COSCO, now owning 60 percent of the port, while the rest is owned by a local company.

China takes possession of Sri Lankan port

In fact, China’s dominance in South America is called debt trap diplomacy i.e. give loan and take the trap policy. This term was coined by Indian expert Brahma Chellaney in 2017 as a neologism. Who does not know about Hambantota Port of Sri Lanka? Everyone knows that when Sri Lanka could not repay the Chinese loan for the Hambantota project, it was forced to lease it to a Chinese company for 99 years. China has done this in many countries including Pakistan and Bangladesh, which is the result of its debt trap diplomacy.

This is how China’s dominance increased in South America

The US is Latin America’s largest trading partner, while China remains South America’s top trading partner. Trade between China and Latin America grew 26-fold between 2000-2020 (from $12 billion to $315 billion) and is expected to double to more than $700 billion by 2035, based on data from the World Economic Forum.

Chinese banks distributed loans in Brazil and Venezuela

Since 2005, China’s state-owned banks, including the China Development Bank and the Export-Import Bank of China, have extended 117 loans to the region, totaling $138 billion. The biggest borrowers among these were Brazil, Ecuador and Venezuela. These loans have been given to them on the conditions that China can use the natural resources of that country. The region’s exports to China were only 1.6% of total exports in 2001. By 2020 this figure increased to 26%.

China’s foreign investment in South America is very high

By May 2022, 7 countries of South America have become participants in the China Belt and Road Initiative (BRI), which are Venezuela, Ecuador, Peru, Bolivia, Chile, Argentina and Uruguay. As of 2021, energy contributed about $94 billion (about 34%), infrastructure contributed $26 billion (about 42%) and mining contributed $2.1 billion (about 3%).

Highest investment in railways and communication in 2021

In 2021 alone, Chinese state-owned companies including China Railway Construction, China Communications Construction and China National Off-Shore Oil (CNOOC) funded $11.3 billion worth of projects in South American countries.

Investing in South America’s Mining and Energy

Chinese-owned companies are heavily involved in energy development. PowerChina has more than 50 projects underway in 5 Latin American countries, including Argentina, Brazil, Bolivia, Chile and Peru. From 2018 to 2020, China invested $16 billion in overseas mining, including investments in South America’s Lithium Triangle, which includes parts of Argentina, Bolivia and Chile. These countries contain 56% of the world’s lithium resources.

China captured 7 big mines of Peru

China represents the largest investor in Peru’s mining sector, controlling seven of Peru’s largest mines, 100% of Peru’s iron production, and 25% of their copper production. Meanwhile, the $1.4 billion Mirador mining project in Ecuador has led to displacement of local populations, land grabs and environmental damage.

China also took the responsibility of security of South America

China has sold its own defense equipment to the governments of Venezuela, Ecuador, Bolivia and Argentina. It has cooperated with these countries in military exercises and engaged in educational exchanges and training for military personnel. China is focusing on increasing Huawei’s presence in the region. Whereas America has repeatedly warned about this. Many countries, including Venezuela, Brazil, Ecuador, and Argentina, have adopted dangerous PRC digital authoritarianism tactics like facial recognition technology to combat crime.

China’s arms are exported to South America

From 2009-2019, China has provided major military hardware worth a total of $634 million to 5 South American countries Argentina, Bolivia, Ecuador, Peru and Venezuela. According to the Council on Foreign Relations, Beijing reportedly sold more than $615 million worth of arms to Venezuela between 2009 and 2019. At the same time, on June 24, 2022, Argentina has expressed its interest in purchasing China-made JF-17 fighter jets.

China’s soft power in South America

China is also setting up a Confucius Center to spread its religion in South America. As of October 2021, China has established 28 Confucius Institutes in South America. Of these, 11 are located in Brazil, while the rest are located in Peru, Colombia, Ecuador, Argentina, Bolivia, Chile and Venezuela.