China in US sphere of influence: South America and shaping Chinese engagement

Unfortunately, low-energy prices have exasperated entrenched socioeconomic issues that plague the narrow, natural resource-based economies of South America.  Sadly, the United States has been particularly negligent over the past few decades when it comes to addressing serious issues in its own hemisphere.  

In fact, political squabbling over US immigration reform and President Obama's attempt to reengage Cuba currently represent the most significant policy debates related to countries south of the border.  Meanwhile Argentina’s debt troubles and President Cristina Fernández de Kirchner’s lack of professionalism are the only major South American stories receiving any significant attention in the United States, aside from sports.  

Where the United States is actively reengaging Asia in order to address growing Chinese influence, as well as some of its more aggressive behavior, the Chinese are unchallenged in their efforts to influence South America.  Coming to the rescue of South American economies, China is planning to invest, at least, 250 billion dollars in Latin America over the next 10 years.  It is also ramping up trade.

In many respects, South America’s economic and governance issues can be understood in terms of a lack of social training.  That is, Europeans and Americans, despite our poor saving, spending, and investing habits, are educated enough to accept the benefits of rational economic policies, even when they hurt us.  Looking at Argentina as a prime example, the government’s views on economic policy are reminiscent of small business owners who are thoroughly ignorant of basic accounting principles and conventional businesses practices. 

A large part of this poor economic intuition likely stems from the socialist history of many South American countries and the ease by which they have been able to earn money with natural resources.  In turn, easy money has fuel unchecked government spending in times of abundance.  In other words, Argentina has never had to engineer a real economy.  Instead of understanding how the mechanisms of the economy actually work and manipulating them to create a broad, sustainable economy, the Argentinean government is trying to dictate the economy  to work the way it wants it to work.

Given China is a Communist country that acts extremely capitalistic in the global economy, South Americans countries, where poverty is largely addressed through socialism instead of broad base economic development, likely find China to a far more compatible economic partner than the capitalist countries of North America and Europe.  Where capitalist Westerners see investments in South America as a guaranteed financial loss, the Chinese see South America and its rich natural resources as a means of providing for its massive populations needs, even if they lose money that can easily be replaced by cheap-labor driven exports.

That said, China’s growing influence is not necessarily something to be combated.  As the Hong Kong Umbrella Revolution protests boldly demonstrate, the greatest threat from China to the Peoples of the world is its suppression of political freedom as well as its domineering treatment of neighbors like Japan and Vietnam.  China’s financial support of distressed and/or underdeveloped countries is, however, beneficial to the entire world, including the West. 

The same is true of China’s role in checking Russian and North Korean misbehavior.  China’s potential involvement in the fight against terrorist groups like the Islamic State is clearly beneficial as well.  The task for the United States and the rest of the world is, therefore, to shape how China engages the world. 


Economically, this means tackling Chinese misbehavior, particularly when it comes to intellectual property, by becoming less dependent on Chinese exports and capital.  It also means learning to frame global issues in a way that the Chinese see their interests are threatened when Western interests are threatened.