Brazil has opted out of China’s Silk Road initiative, a decision that reflects its desire to avoid being seen merely as a raw material supplier. This move underscores a broader trend in Latin America, where major economies like Mexico and Argentina are also distancing themselves from the project. Despite this shift, China’s influence in the region remains strong, with significant trade ties and military concerns for the U.S., particularly in countries like Panama and Peru.
Brazil’s Decision Shakes the Silk Road Initiative
It must have been a harsh blow for Xi Jinping, China’s leader, as he recently celebrated the Brics community alongside Brazilian President Lula da Silva in Kazan, Russia. However, just days later, Celso Amorim, Lula’s chief foreign policy advisor, declared that Brazil would not participate in Xi’s ambitious Silk Road project.
Plans were in motion for a ceremonial signing of Brazil’s membership in this vast intercontinental trade and infrastructure network, set to take place in Brasília in mid-November, marking 50 years of diplomatic relations between the two nations. Yet, Brazil seemingly assessed that the potential benefits of joining the initiative were insufficient. Amorim led a delegation to Beijing, returning “not convinced and unimpressed” by what was on offer.
Brazil’s Strategic Positioning
Brazil is keen to avoid being relegated to the role of a mere raw material provider. While China seeks to secure raw materials from Latin America, Brazil aims to expand its exports to include semi-finished and finished goods. President Lula recognizes that the best approach for Brazil is to maintain a balanced stance between the West and China, enabling him to negotiate effectively for loans and foreign investments.
This withdrawal from the Silk Road initiative highlights a broader trend of diminishing interest in the project across Latin America. The three largest nations in the region continue to remain outside this framework. Mexico, aligned economically with the U.S., has also opted not to join, and Argentina, although a member since 2022, has paused its cooperation under President Milei.
The Silk Road initiative faces challenges beyond Latin America as well. India, a founding member of Brics, has also expressed reluctance to engage with the initiative, citing inadequate competitive conditions for its businesses. Italy, the only G-7 country that joined, exited last year, with Giorgia Meloni citing a lack of benefits for her nation. Smaller countries are also struggling to repay Chinese loans, and the prospect of being saved from insolvency could further entrench their dependence on China.
Nevertheless, it would be a mistake to underestimate China’s influence in Latin America solely based on Brazil’s decision. Currently, 22 countries in Latin America and the Caribbean are part of the Silk Road initiative, with trade between the region and China skyrocketing from $12 billion in 2000 to an impressive $489 billion today. China has established itself as a key trading partner and a significant lender for many countries in the region.
Furthermore, China’s growing presence poses military security concerns for the United States, as highlighted by General Laura Richardson, the outgoing head of U.S. Southern Command. This is especially evident in Panama and Peru, where China’s influence is palpable. In Panama, the ports at both ends of the canal are effectively under Chinese control, managed by a Hong Kong company that operates under a long-term concession with the Chinese government.
In Peru, the newly opened mega deep-sea port of Chancay, built by Chinese interests, is set to be managed by them as well, presenting potential civilian and military uses for the Chinese navy. Peru has further complicated its situation by allowing the entirety of Lima’s power supply to fall into Chinese hands. In response to China’s escalating influence, Richardson has proposed a Marshall Plan for Latin America to counterbalance this growing power.