China has become a growing focus of U.S. scrutiny, whether it’s the Communist nation’s role in the Covid pandemic, its spying on the U.S. and theft of intellectual property, its control of the supply chain, medicine, and rare earth minerals, or its dominance of the computer chip market. Now, Scott Thuman reports from South America on China’s major power play in America’s backyard.
There is a new tune filling the air across Latin America. A little bit of rock and roll, and a lot of this. The rattle and hum of heavy machinery. In Colombia's capital Bogota, they are digging deep to create the city's first metro system and doing so in just five years' time.
A project this massive, of this scale and size, currently the largest underway in the entire country, goes a long way in a place like Colombia, where they say it'll create about 17,000 jobs.
An economic boost, to be certain, in a country where unemployment hovers around 14%. But take a closer look at those shiny new rail cars, and you'll see who is helping with all that hiring. The train is Chinese, and so are the companies that won the bids on the $4.5 billion deal to build the metro's first line.
On a hill overlooking the city, it's the same story: an impressive fleet of electric buses is already in service. Again, it is China behind the wheel, winning the bid to supply and maintain them.
From transportation to telecommunications, Chinese phones, car dealerships, food delivery — Chinese investment is everywhere here. And a critical injection of cash, according to Ingrid Chaves, executive director of the Colombian-Chinese Chamber of Commerce.
Ingrid Chaves: I think China has always had interest in our geographical position, in our economic and political stability. So it makes Colombia the point of attraction to China.
Scott: China has a lot of money.
Scott: What do you think is their motivation?
Chaves: Like China wants to come and help and invest here in those, because they know maybe there are not other countries that can do as much as they can do.
Chinese investment, though, isn't altruism; it's part of a plan called the Belt and Road Initiative, spending trillions of dollars across more than 100 nations to expand China's footprint and trade links with the world. While Colombia has yet to join, the majority of Latin American nations have, like Brazil, Ecuador, Argentina, and others, leading to new roads, dams, power stations, and ports.
Scott: Is it just the tip of the iceberg? Is this just the beginning?
Chaves: I think yeah. If they do good, I think there are a lot of opportunities for them to keep growing here in our country.
Scott: Do you have any concerns?
Chaves: I don't. Really, I don't. I think if China is doing good things, why not? We have to welcome them.
Between 1990 and 2009, investment from China to all of Latin America was about $7 billion. But since 2005, it has soared to more than $130 billion. And China's gain is America's loss. In the year 2000, the U.S. dominated trade here. Less than 20 years later, China responsible for a staggering switch.
Sergio Guzman: If the United States doesn't take advantage of that opportunity, others will come to the table and eat its lunch.
International relations expert Sergio Guzman says China's state-backed companies can take more risks than their western counterparts.
Guzman: I think American companies are looking at many investment opportunities and saying, "That's a little risky for me."
Scott: And China can be more bold.
Guzman: Oh, absolutely. They can afford to have a bad quarter. They can afford to have a bad year. Hell, in Venezuela, they've had bad decades, and they're still there. I think America is not necessarily taking advantage of the opportunities that Latin America offers, but also, they've sort of taken us for granted in a way.
He says America took its eye off the prize, so to speak, spending money and focusing on the Middle East instead, sparked by wars in Iraq and Afghanistan.
Closer to the U.S., another growing concern at the Panama Canal, that critical artery for trade connecting the Atlantic and Pacific oceans. Busy as ever, it has become another strategic target of China's, investing heavily in recent years.
Scott: Here in Panama, you can really see it. On one side of the water, you've got the Panamanian port. Directly across and competing with it, the Chinese port. The concern is that the larger presence China has here, the more control it also has.
Chinese companies now manage ports at both ends of the canal. They've also built bridges and rail lines.
Scott: There are always these worries that if China has a footprint, it may also eventually have a military footprint, or it may have control over transit, it may have control over communications. Is that a legitimate worry?
Guzman: I think it's a legitimate worry decades from now. Geopolitically speaking, they're making moves, and they're giving signs of growing importance to Latin America. And the U.S. is not.
One American leader who is already focused on China's moves here is General Laura Richardson, the head of the U.S. Southern Command, overseeing Latin America and the Caribbean.
Last March, in a briefing before the U.S. Senate, she didn't hold back.
Laura Richardson: The People's Republic of China, our long-term strategic competitor, continues its relentless march to expand economic, diplomatic, technological, informational, and military influence.
For Richardson and many U.S. Senators, the Panama Canal is a particular worry, and where we spotted what appeared to be Chinese naval vessels.
Richardson: Senator, what I would like to mention are my two greatest concerns, strategically, and that's with the Panama Canal, the projects that the Chinese have around the Panama Canal, and that we want to keep free and open for the global economy but also for our global war plans.
The fear is that perhaps one day, China could try to control access to the canal or station military forces locally, as has happened in Africa, where China also started with investments.
Scott: So if you're advising Washington, you're saying now's the time to step up.
Guzman: Absolutely step up, but also pay up. Because I think if Latin American countries don't materialize these investments, they're not going to sit and cross their arms and wait for roads to appear. They're not going to wait for infrastructure and telecommunications investments to just materialize out of thin air.
Scott: And if China says, hey guys, we'll help.
Guzman: Absolutely, that's what they're going to do.
The question now: Will China's deep pockets and ravenous reach go unmatched, or serve as a wake-up call for America?
Sharyl: So is there something you can point to that the U.S. is doing to recognize and counter this?
Scott: Sure. U.S. diplomats, including Secretary of State Antony Blinken, have increased trips to Latin America. And there are more offers for financial help and investment. But we heard over and over again from people in Colombia — and keep in mind, it's one of our closest allies in the region — that if the U.S. and Europe don't step up and help these nations progress, China will, and they will choose — China, keep in mind, part of that is because China is often the lowest bidder, which is a critical part of that decision-making process.
Sharyl: So infrastructure they're taking part in, as opposed to we're giving a lot of cash and foreign aid, which is different.
Scott: It's a whole process.
Sharyl: Thanks a lot, Scott.