Heads and tails of China in Latin America

China offers Latin America a two-sided trade relationship: it is a rich ally with stable demand, but also a factor in deforestation and social conflict, according to a Florida International University report. For the author, Mónica Núñez Salas, there are two “apparently opposite truths” in this relationship.

Latin American countries “have greatly benefited from their partnership with China” to “access financial resources, fill their transport and energy infrastructure gaps, and ensure constant demand for their products” and, more recently, to fight the COVID-19 pandemic. Covid-19 through the so-called “mask diplomacy”. But China is also “a determining factor in the landscape of Latin America, and the substantial deterioration can be attributed, directly or indirectly, to the goods it consumes”, with “an impact on food, deforestation and water scarcity”.

However, Núñez clarifies that “there is no evidence that China can be held responsible for Latin America’s failure to diversify the region’s export markets.”

The author expressed concern that the region is not adopting “practices to sustain this relationship at a time when the world is approaching its tipping point, a threshold beyond which an ecosystem reorganizes itself, often abruptly or irreversibly”.

In this relationship “with nuances” it is still “a challenge” to achieve the mutual benefit that Beijing presumes, according to the report.

Latin America has always been a provider of natural resources to sustain Chinese growth, albeit at “a high cost.” The growing Chinese demand for minerals and agricultural products made Latin American countries “highly dependent on a single partner and transformed local landscapes” with an intensive carbon and water footprint.

“The socio-environmental practices of Chinese companies are not inherently different or worse than those of their Western counterparts,” clarifies the text, which insists on analyzing each case.

The growing need for energy storage devices (batteries, telephones, electric vehicles, etc.) has multiplied the demand for lithium, which Chile, Bolivia and Argentina have in large quantities (approximately half of world reserves).

Its lithium is often in underground brine, which makes extraction cheaper, but causes conflicts with local communities, who suffer from a decline in agricultural activity that affects their livelihoods.

The soy

In soybean production, China has been accused of grabbing land but, according to the report, “the actual amount of land controlled by Chinese investors is unclear.”

This is due to the diversity of strategies adopted (purchase of land, leasing, company-community contracts), which are not exclusive to Chinese companies.

China imports more than 80% of the soy consumed worldwide and Latin America provides approximately 60%.

Despite the impact of the crops in Argentina, “there were few efforts to build a comprehensive sustainable strategy and much interest in persevering with the commercial relationship,” accuses the report, which criticizes the fact that sustainability is left at the mercy of private sector initiatives.

Deforestation

China is the largest foreign consumer of Brazilian beef, “a product that expands at the expense of the forested areas of the Cerrado and Amazon regions,” he warns.

Today, “agriculture and the change in land use (which changed to grazing) account for more than half of the greenhouse gases in Brazil”, where some producers pretend not to raise cattle on recently deforested land.

The link between international demand and deforestation is not direct.

Brazilian ranchers “are not clearing new areas to raise cattle sold on the international market,” says Núñez. “It is more likely that foreign demand is sourcing beef raised in low environmental impact areas and displacing the local cattle market towards high impact areas.”

If trade relations between Latin America and China do not take climate change into account, it is likely that the region’s forests “will disappear and reach the point of irreversibly converting the largest tropical forest from a carbon sink to a carbon emitter.”

The report highlights, as a positive point, China’s contribution to the adoption of clean energy.

With the lithium it imports, China manufactures, among other things, batteries for renewable energy technologies, becoming a source of green energy for Latin America, not only through solar panels, but also with electric vehicles that have helped countries like Colombia and Chile to reduce urban emissions. AFP

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