How China should understand and manage political risk in Venezuela has become one of the most important, if too often ignored, questions not just in China’s relationship with Latin America, but in its broader efforts to be seen as an agent and leader of development on the world stage.
The Forum on China-Africa Cooperation (FOCAC) was established far earlier than the BRI, and it has become a sophisticated framework for China’s partnerships with African countries. Thus, FOCAC can be a mini-version of multilateral cooperation that aids the implementation of BRI projects.
China has often been accused of practicing “debt-trap diplomacy”—miring supposed partners, particularly developing countries, in unsustainable debt-based relationships. But this is a misreading of the issue, and nowhere is this more apparent than in China’s dealings with Venezuela.
China and Latin America must confront the legacy of past deals gone wrong and attempt to move beyond commodity-based trade, investment and financing ties to forge more infrastructure cooperation.
Concerns about China’s mercantilist trade and investment policies have been at the forefront of growing frictions between China, the EU and the United States, but the Belt and Road Initiative has also highlighted worries about the lending of billions of dollars for infrastructure projects by its “policy banks”.
Since its announcement in 2013, the Belt and Road Initiative has grown from an idea centered on connectivity and infrastructure development into a global strategy bolstering China’s influence and economic diplomacy.
Since its unveiling in 2013, the Belt and Road Initiative (BRI) has developed into a sweeping global project with profound implications for the international financial system, China’s own growth model, and governance in China and in countries along the Belt.
While the Trump administration has proposed to slash foreign aid by more than one-third, China is increasingly interacting with, and providing aid to, developing countries under the umbrella of South-South cooperation.
China and its keenest Latin American borrowers are left with the challenge of managing the legacy of past deals, including those that have gone awry.
It is Trump administration policies and attitudes that have provided China a rhetorical opening in Latin America at a time when China’s economic and political relations with the region face serious challenges.