2005-2015: From the burial of FTAA to the birth of Chinese soft power in Latin America and the Caribbean

The post-neoliberal horizon faces advances, tensions and challenges, as well as reversals, that challenge the processes of change in Latin America.

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Military power and economic power are both examples of hard command power that can be used to induce others to change their position. Hard power can rest on inducements (carrots) or threats (sticks). But there is also an indirect way to exercise power. A country may obtain the outcomes it wants in world politics because other countries want to follow it, admiring its values, emulating its example, aspiring to its level of prosperity and openness. In this sense, it is just as important to set the agenda in world politics and attract others as it is to force them to change through the threat or use of military or economic weapons. This aspect of power getting others to want what you want I call soft power. It co-opts people rather than coerces them.

Joseph Nye, The Paradox of American Power


1944. In a hotel in Bretton Woods (New Hampshire, United States), a year before the end of World War II, the principal powers of the Western World decided on the creation of a new order in the economic, financial and commercial planes, giving the impulse for the creation of the International Monetary Fund and the World Bank, as well as the utilization of the US dollar as the money of international reference.


1955. In Bandung (Indonesia), 23 Asian and 6 African States that had recently acquired independence through decolonization, held a meeting. They represented 1.500 million people who disposed only of 8% of the world income. These countries of the third world, in addition to condemning colonialism and apartheid that still existed in a good part of Africa and Asia, agreed on a series of principles based on the defense of sovereignty and equality among races and nations, in addition to the defense of the principles of non-aggression, non-interference and peaceful co-existence.


2005. In Mar del Plata (Argentina), the IV Summit of the Americas, where George W Bush and his proposal of a Free Trade Area of the Americas (ALCA) was defeated by the opposition of Argentina, Brazil, and Venezuela, with the support of Uruguay and Paraguay. In this defeat, the campaign of mobilization of the social movements and Latin American peoples was essential, as well as the role of Presidents Nestor Kirchner, Luíz Inácio Lula da Silva and Hugo Chávez.


2015. In Moscow, taking advantage of the 70th anniversary of the victory over fascism, the Russian President Vladimir Putin and the President of the Popular Republic of China Xi Jinping, signed 32 agreements of cooperation involving economics, trade, energy, infrastructure, science, technology and military affairs, including a high speed train between Moscow and Beijing, planned for 2023. A week later, Xi Jinping visited Brazil and signed trade agreements with President Dilma, for an amount of 50 billion dollars, the most important being a railway that crosses the Amazon and the Andes to join the Atlantic coast of Brazil with the Pacific via Peru, making a fast track of communication with China possible.


And just as ten years after the agreements of Bretton Woods a group of nations that defied the US hegemony was born that began to trace a new scenario that would lead to the bipolarity of the Cold War, now, ten years after the death and burial of the FTAA in Mar del Plata, we are seeing the birth of a multipolar world in which China, and by extension the BRICS with Brazil anchored in Latin America and the Caribbean, are challenging the declining hegemony of the United States.


As defined by Monica Bruckman and Theotonio Dos Santos [1], the close relations among the emerging powers involved in BRICS, in addition to the new thrust in relations between China and Latin America, have meant a new phase of South-South relations, inspired on principles similar to those of the Bandung Declaration. 


Soft power with a Chinese flavor


This multipolar scenario, that is partially responsible for the decline of US hegemony, cannot be understood without looking at the unrelenting ascent of Chinese civilization from the beginnings of the twenty-first century. This ascent began to develop in the second half of the twentieth century, above all when its economic reforms began in 1978. In 1982, the first special economic zones along the China coast were created, giving place to a mixed economy in special zones of the territory that would configure the Socialist Market Economic System (formally established in 1993); in 1984-1995 the Chinese Government established the Getihu, that promotes private property of small businesses; in 1990 the Stock Market was inaugurated and in 2001 China joined, albeit with conditions, the World Trade Organization (WTO); in 2004 there was a constitutional reform to allow private property and by 2006 China was the fourth economy in the world, only surpassed by the triad of the United States, Japan and Germany. Finally China also surpassed German and, in 2010, Japan.


At the present time, China is the second world economic power, only slightly behind the United States, and already exceeding them in their GDP adjusted by Purchasing Power Parity (PPP). To give an idea of the growth levels, in 2005 the Chinese GDP was at 72% of the US, in 2011 at 87%, and today they are at the point of reaching parity [2].  This has been possible due to extraordinary growth rates of 10% per annum, which means that in the past 30 years its real GDP has been multiplied by 13, its GDP per capita by nine and its real per capita consumption by six [33].


China has had five major leaders since its foundation, Mao Zedong (1893-1976), Deng Xiaoping (1904-1997), Jiang Zemin (1926), Hu Jintao (1942) and now Xi Jinping (1953), in two stages of approximately 30 years each. Between the foundation of the Popular Republic in 1949 and the death of Mao in 1976, agriculture and heavy industry were developed, which allowed, with a certain autarky, to guarantee the basic needs of the people based on equality. From 1978, and over the following 30 years of implementation of socialism with Chinese characteristics, or market socialism, China took off economically under the impulse of light industry and technology and at the cost of an increase of inequality between the countryside and the city, as well as between the coast and the interior, creating new social classes.


It is during the second half of the last 30 years that China adapted itself to the notion of soft power, worked out in 1990 by Joseph S. Nye in his book Bound to Lead. The Changing Nature of American Power and developed in The Paradox of American Power. Why the World's Only Superpower Can't Go It Alone (1992) and above all The Means to Success in World Politics (2004). Works translated to Chinese and adapted to Chinese characteristics. 


Nye contends that soft power has three pillars, culture, foreign relations and political values. From coercion in the military and economic context that exercises hard power; soft power is based on seduction and persuasion. If hard power concentrates on structure, we can say that soft power is something super structural that concentrates on the construction of ideology.


To understand soft power with Chinese characteristics, we must think of two key concepts in international relations of the Asian giant, peaceful development and a harmonious world.


The peaceful development theory was denominated in a first moment as a peaceful rise and consists of 5 points [4] enumerated by the Prime Minister Wen Jiabao: 


1. It would attempt to take advantage of world peace to promote the development of China and safeguard world peace through Chinese development


2. This would be based on the self-strengthening of China and its independent and arduous labor


3. This could only be done by continuing with the policy of openness and an active series of economic and commercial interchanges at the international level


4. This would take several generations


5. There would be no attempt to obstruct the route of any other country or to threaten any other country, nor would it be at the expense of any country in particular.


However, they soon substituted the notion of rise for development in order to not generate tensions with other powers of the new world which were being established and that might interpret it as a threat to the status quo. Development as a clear wager to consolidate its role of a power without threatening the role of any other, especially of the United States, in a logic of non-confrontation, although it would extend its influence in Africa, Asia and Latin America. This deepening of the doctrine can be found in the book of the Chinese government: China's Path to Peaceful Development.


At the same time, the policy of a harmonious world involves thinking of a peaceful and secure world, based on respect for international legality and the sovereignty of countries, where there will be peaceful co-existence of different civilizations and technical cooperation for development, especially for countries of the South.


These two elements, peaceful development and a harmonious world, mark the basis of Chinese soft power, which aims to exercise a sphere of influence with its foreign policy and international cooperation, above all South-South, and its economic success. Probably the only obstacle to be encountered will be the criminalization that the West imposes on anything that is not its model of liberal and bourgeois democracy; but the Chinese Communist Party (CCP) adopts a model of consultative democracy in which a technical-meritocracy administers power in the name of the people and in permanent consultation with them, maintaining stability on the basis of economic growth which is not found in the greater part of the West.


The Sino-Indo-Russian Triangle


But the soft power with Chinese characteristics cannot be understood in the area of international relations without Russia and India, which are helping to establish the new multipolar order.


The alliance between the three nations is very solid, based on economic, political and military cooperation, which makes it possible to create enormous internal markets for the excess of production of each country.


Russia, with the nationalist government of Vladimir Putin, but with the Communist Party (CPRF) as the second force with about 20% of the votes, shares with China the leadership of the non-western world. The CPRF has a political horizon that looks both to the twenty-first century socialism present in Latin America, and to Chinese market-socialism [5]. The Russian Federation moves in the terrain of economic integration with the creation of the Eurasian Economic Union (EEU) established in January of 2015 and integrated by Russia, Belorussia, Kazakhstan, Armenia and Kirgizstan, with the objective of creating, in ten years, an internal common market similar to the European Union for the free circulation of capital, merchandise and workers.


For its part, India, since the coming to power of the nationalist Narendra Modi (to whom the United States refused a visa a few years ago), and in spite of some territorial conflicts that both parties maintain, has come closer to China, materialized in the visits of Xi Jinping to India in September 2014 and of Modi to China in May 2015. At the same time, they have reinforced their military cooperation with Russia, having recently purchased 200 multifunctional Ka226T helicopters, at a cost of 467 million dollars [6].


In addition, Russia and China have worked together on the design of the new Silk Road [7], a corridor of transportation, energy and commerce between Asia and Europe that will unite India, Bangladesh, Myanmar and China and another corridor between Russia and India through Central Asia which will connect China with Europe.


China, Russia and India will also take part in the Asian Infrastructure Investment Bank (AIIB), set up by China, with India as a founding member since 2014 and the incorporation of Russia in 2015. The Bank already has 57 members among whom are several countries that are members of NATO, with the incorporation of the United Kingdom, Germany and Italy, leaving out only the United States and Japan among the big powers of the G8. This is now becoming the principal reference of the new international financial architecture, a counterweight to the International Monetary Fund (IMF) and the World Bank (WB).




China, Russia and India, with South Africa and Brazil as gateways to Africa and South America, make up BRICS, a term created in 2001 by the head of Global Economic Research of Goldman Sachs, Jim O'Neill. A little later, in 2003, Goldman Sachs published a report [8] where a perspective to 2050 of this group of emerging powers was made.


BRICS, at the present time, represents 3 billion people, 46% of the world population, occupying 29% of its territory with 25% of world GDP and representing 20% of global investments. In addition, they possess huge reserves of fossil fuels (Russia) and minerals (Russia, China and Brazil), in addition to being large producers of food. They are also among the countries with major international reserves (China in first place, with more than 4 trillion dollars). 


BRICS began to function as a block in the year 2006 when, at the initiative of Putin, taking advantage of the General Assembly of the United Nations in New York, there was a first ministerial meeting of the Chancellors of Russia, China, India and Brazil, and a bit later, in May 2009, there was the first meeting of the block as such, in Russia with presidents Medvedev, Lula, Jintao and the First Minister of India, Manmohan Singh.


The area of military cooperation is one of the most advanced among the BRICS countries. Russia's advanced technological capacity is combined with the Chinese levels of production, above all in combat aircraft, warships and anti-aircraft defense systems. And while there are agreements in all the main areas of technical military cooperation, the Vice President of the Academy of Geopolitical Problems, the Russian Konstantin Sívkov, points out [9] that it is necessary to widen this through common projects for the development of weapons systems, advancing in strategic cooperation, joint exercises, common preparation of personnel and plans for military action in emergency situations, coalition bases in certain zones of responsibility, following the example of NATO or the Warsaw Pact.


In technology, BRICS are also moving in the development of BRICS Cable, a system of interconnection through a fiber optic ocean cable, with an extension of 34 thousand kilometers and a capacity of 12.8 terabits per second that will connect Russia and Brazil, passing through China, India and South Africa. BRICS Cable will guarantee sovereignty in communications, especially in internet, achieving technological sovereignty in communication and protection from US espionage.


In economic, trade and financial affairs BRICS have also moved forward. China has proposed to BRICS to create a trade and economic common market [10] with a mechanism of monetary agreements (genesis of a common currency in the long term?). The basis of this common economic and trade policy will be the New Development Bank BRICS (NDB BRICS), officially established in July 2014 at the Fortaleza Summit, with an initial capital of 100 billion dollars. It will be based in Shanghai. 


Latin America and the Caribbean


The implementation BRICS will have in Latin America is as yet unclear, due to the slowing of the process of regional political integration and the problems that Brazil is now facing; from being a regional sub-power, with diplomatic outreach in Central and South America, it has had to fall back due to internal problems of the government of Dilma.


Meanwhile, China itself has taken the lead in Latin America, opening up communication with ALBA, UNASUR and CELAC, and above all exercising unprecedented economic diplomacy. One fact says it all: the volume of trade between Latin America and China has increased 1.193% in the first ten years of the twenty-first century (2000-2010) and in 2010 alone, Chinese loans for development projects in different countries of Our America were superior [12] to those of the World Bank (BM) or the Inter-American Development Bank (IADB). At the same time it is important to single out one of the most important financial projects, with Chinese capital, the new Nicaraguan Canal, a serious competitor to the Panama Canal, and a project with a cost estimated at 50 billion dollars.


Meanwhile, Latin America and the Caribbean look with sympathy to the soft power with Chinese characteristics since the People’s Republic of China provides loans at low interest rates and does not intervene in the internal affairs of the country, as well as boosting other references in the international system in its search for multipolarity, thus contributing to provide the geopolitical picture with a South-South outlook.


Obviously China as the first consumer of energy in the world, and as is claimed in its  Document on Policy toward Latin America and the  Caribbean [13], has great interest in a region that has some of the principal reserves of raw materials, minerals, biodiversity and water in the world, and the countries of Our America should look for a balance between the obtainment of Chinese investment and loans in order to develop the country and bring the population out of poverty, and the need to industrialize and develop technologies with a view to the long term. It means we must look for a balance between the immediate needs of the present situation and the strategic outlook in the long term through South-South cooperation.


Sixty years after Bandung, both in Latin America and the Caribbean and in China there is a search for hybrid ways of thinking about the economy, policy and society, between socialism and the capitalism of the national-popular state.  As in Bandung, between these two zones of the world, priority is given to respect for sovereignty and the principal of non-interference in the internal affairs of each country, in addition to the defense of the resolution of conflicts through peaceful means.


Latin America and the Caribbean have left behind the Washington Consensus and its tool ALCA, and have been moving towards a post-liberal scenario based both on a Bolivarian Consensus as well as a Consensus of Beijing, which have as common and principal traits a strong State that exercises a basic role in the design and planning of the economy and the redistribution of wealth on the basis of sovereignty over natural resources, and a new diplomacy that looks more to the South than to the North.  With different rhythms, intensities, and some processes with more depth than others, these are the characteristics of a changing epoch in Our America.


The post-neoliberal horizon faces advances, tensions and challenges, as well as reversals, that challenge the processes of change in Latin America, the ebb and flow of revolutionary processes as well as reforms. But this horizon also faces instruments for Latin American disintegration such as TISA (Trade in Services Agreement) the Pacific Alliance, a recharged ALCA which, in spite of a claim that it aims to facilitate integration and not reinforce continental divisions, has among its objectives [14] that of establishing a distance from the threatening shadow of Brazil in order to promote a regional integration more favorable to trade than MERCOSUR and to counter any residual influence of ALBA.


BRICS, as François Houtart has affirmed [15], are anti-hegemonic but not anti-systemic, to break the hegemony of the United States and help to consolidate a new multi-polar world, should be a necessary first step for a post-neoliberal scenario in a good part of Latin America and the Caribbean, that could be changed into something more, amplifying its limits to allow us to see a post-capitalist horizon. And in this chess match that is being played out right now in the South in general and in Our America in particular, between flows and counter-flows, China and its soft power should be fundamental allies to build the epochal challenge. 


Translated for ALAI by Jordan Bishop


- Katu Arkonada is postgraduate in Public Politics. Ex consultant of the Strategic Planning Vice-minister; Constitutional Development Juridical Unit of Vice-presidency; and Bolivian Foreign Affairs Ministry. Member of the executive secretary of the Network in Defense of Humanity


Article published in Spanish in the book Del no al ALCA a UNASUR: Diez años después de Mar del Plata, Juan Manuel Karg, Agustín Lewit (coords.), CCC-REDH, 2015.



[1] Por una agenda estratégica de América Latina http://www.alainet.org/es/articulo/169906


[2] http://economia.elpais.com/economia/2014/05/03/actualidad/1399140952_251301.html


[3] Los BRICS: el caso de Brasil y China, dos futuros líderes mundiales http://www.redalc-china.org/Isabel%20Almaraz%20Gabriel.pdf


[4] China en transformación: la doctrina del desarrollo pacífico http://www.redalyc.org/articulo.oa?id=59918604


[5] Los comunistas rusos, en el laberinto del Minotauro global http://www.eldiario.es/contrapoder/partido_comunista_ruso_6_382571772.html


[6] Rusia apuesta por reforzar la cooperación militar con los BRICS http://tecnologamilitar.blogspot.mx/2015/05/rusia-apuesta-por-reforzar-la.html


[7] Rusia y China allanan la ‘Ruta de la Seda’ con un acuerdo de cooperación económica http://actualidad.rt.com/actualidad/174262-rusa-china-cooperacion-uee-ruta-seda


[8] Dreaming with BRICS: the Path to 2050 http://www.goldmansachs.com/our-thinking/archive/brics-dream.html


[9] Rusia apuesta por reforzar la cooperación militar con los BRICS http://es.rbth.com/internacional/2015/05/28/rusia_apuesta_por_reforzar_la_cooperacion_militar_con_los_brics_49927.html


[10] China propone crear un mercado común para el BRICS http://actualidad.rt.com/economia/177078-china-crear-mercado-comun-brics


[11] El comercio América Latina-China crece más de 1000% en la última década http://spanish.peopledaily.com.cn/31620/7414875.html


[12] http://www.thedialogue.org/map_list


[13] http://www.politica-china.org/imxd/noticias/doc/1225872371Texto_integro_del_Documento_sobre_la_Politica_de_China_hacia.pdf


[14] Los Pumas del Pacífico Un Modelo Emergente para Mercados Emergentes http://www.bfna.org/sites/default/files/publications/Los-Pumas-del-Pacifico.pdf


[15] De Bandung a los BRICS: Proyectos anti-hegemónicos pero no anti-sistémicos http://www.alainet.org/sites/default/files/alai504w.pdf




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