Global Power Game Shift: China Gaining Advantage Over Europe in Latin America
In the global arena, the landscape of relationships and trade is undergoing significant changes, particularly in Latin America.
Recently, President Lula da Silva of Brazil made a bold statement, expressing concerns about the world's increasing instability and fragmentation. He emphasised the need for China and Brazil to unite their voices against unilateralism and protectionism. This declaration comes amidst the White House's unexpected show of support for China in Latin America.
Meanwhile, the European Union (EU) finds itself in a challenging position. Despite being perceived as an attractive partner, the EU is under pressure to move beyond its outdated, bureaucratic, and slow image to remain relevant in Latin America. The EU has announced its "Global Gateway" program, aiming to counteract the influence of China's New Silk Road through strategic investments in the region. The EU plans to invest around 45 billion euros in Latin America by 2027.
One such investment is the expansion of the international airport in Lima, Peru, which is being funded with German loans and involves German companies. Another significant development is the construction of a modern port in Chancay, Peru, by the Chinese state-owned company Cosco, with plans to connect it to Brazil's freight rail network.
Notably, the EU-Mercosur free trade agreement ratification is still pending, despite its potential benefits for EU exports. This delay could potentially benefit China, whose trade volume with Latin American countries has increased exponentially and surpassed that of the EU.
The EU-CELAC summit in Colombia in November will serve as a platform to showcase the progress made by each party in the race for influence in Latin America. President Xi Jinping welcomed the guests, and Chinese Foreign Minister Wang Yi led the conference at the China National Convention Center, which boasts a 25-meter high and 18-meter wide LED screen, the largest of its kind in China.
However, the region is not without its challenges. There is growing skepticism towards China due to high debt from Chinese financing, cheap goods, poor sustainability standards, and continued resource dependence. Similarly, Brazil, a democratic and successful regional power, is experiencing estrangement from the USA, with President Trump's policies further tilting the Americas-skeptical mood in the region into the negative.
In the midst of these shifting alliances and trade relations, it remains to be seen which party will emerge as the dominant player in Latin America. The race is on, and the stakes are high.
