More than a decade after China launched the Belt and Road Initiative (BRI), its ambitious infrastructure and investment project that significantly broadened China’s economic and political influence worldwide and touted by President Xi Jinping as the “project of the century,” the BRI is losing steam. Far from being a path to global prosperity, the initiative has led to unsustainable debt, environmental damage, and has provided China with the potential to exert undue influence, raising questions about its benefits for participating countries.
In early February, Panama, the first Latin American country to join the BRI, announced its departure from the project and end all cooperation with China’s initiative. In making the announcement, Panama’s President Raul Mulino questioned the advantages of the BRI. “I do not know what was the intention of those who signed this [agreement] with China,” President Mulino said. “What has it brought to Panama all these years? What are the great things that this Belt and Road Initiative has brought to the country?”
More than a year prior, in December 2023, Italy withdrew from the BRI, citing that it had not yielded economic benefits and voicing concerns about the economic and political implications of the project, as well as fears about inappropriate technology transfer. In joining the BRI, Italy hoped to boost exports of Italian goods to China yet those remained a very small share of Italian exports, while import from China grew disproportionately, think tank Center for Strategic and International Studies indicated in a report.
According to the Council on Foreign Relations (CFR), with the BRI, China seeks “to develop new trade linkages, cultivate export markets, boost Chinese incomes, and export China’s excess productive capacity.” Latin America is experiencing firsthand China’s industrial overcapacity as it currently battles an avalanche of cheap Chinese steel and unfair trade practices with serious impacts on local industries.
Outrage over the treatment of Chinese workers brought in to work in regional projects, more recently in the BYD Brazil factory, which Brazilian authorities have condemned as “degrading” and “slavery-like”, have exposed human and labor rights violations of China-led projects. A project in Uruguay from China Machinery Engineering Corporation (CMEC), is also facing labor abuses complains.
The geopolitical leverage over BRI countries is yet another motivation for Beijing. According to the CFR, a 2021 study analyzing more than 100 debt financing contracts between China and foreign governments, found that these had clauses that restricted restructuring with other creditor nations, allowed China to demand repayment at any time, and gave China “the ability to use funding as a tool to enforce Chinese hot button issues such as Taiwan or the treatment of Uyghurs.”
While many countries worldwide and in Latin America have voiced their concerns about China’s intentions with the BRI, others have chosen to join, while some, including Colombia, have so far resisted.
Significant presence
China has established a significant presence in Colombia not only with its products, but also with investments in infrastructure. More than 110 Chinese companies operate in the country in key sectors such as energy, mining, telecommunications, health, and renewable energy, according to investigative journalism news site Dialogue Earth. Some of these projects pose significant risks to the country’s human rights, economy, and environment.
Although diplomatic relations between Colombia and China date back 45 years, it is in the present century that Beijing has established itself as the South American nation’s second largest trading partner. According to Dialogue Earth, senior Colombian officials have recently raised the possibility of the country joining the BRI.
“Some decision-makers perceive that they are lagging behind in the dynamics of relations with Asia and feel an urgency to jump on the bandwagon before they are left out,” Vladimir Rouvinski, director of the Department of Politics and International Relations at ICESI University in Colombia, told Diálogo. “This uncertainty plays in favor of a closer relationship with China.”
According to Rouvinski, Colombia, like other countries in the region, is experiencing the so-called Chancay effect, derived from the construction and opening of this port in Peru. “This problem influences the way in which decision-makers evaluate China’s role, without analyzing the possible consequences.”
Geopolitical challenge
China’s intentions in the region are clear: to expand its geopolitical, diplomatic, and economic influence in Latin America. By 2024, 21 countries in the region had already signed agreements with the BRI, allowing China to consolidate the economic dependence of these members and expand its trade routes, nongovernmental organization WOLA indicated.
According to WOLA, the Chinese Communist Party, through state-owned and private companies operating worldwide, seeks to secure strategic resources, agricultural products, and markets for its technology, to maintain its economic growth, guarantee the stability of its middle class, and reinforce its territorial claims under the concept of the “Chinese dream.”
Chinese expansion
In recent years, Colombia and China have intensified their bilateral cooperation, as evidenced by President Gustavo Petro’s visit to Beijing in 2023. During their meeting, agreements were signed to increase Colombian exports and cooperate in science, technology, and renewable energy. Colombia also reaffirmed its commitment to the “one China” policy, WOLA indicated.
Beijing has been able to leverage Colombia’s lacking infrastructure, particularly in telecommunications, The Diplomat reported. Companies such as Huawei and ZTE have offered services for the implementation of 5G networks, which could represent a risk to national security due to concerns about backdoors or hidden vulnerabilities in their equipment that can assist in espionage activities.
Not yet
“Colombia’s stance toward China is ambiguous. In public discourse, there is no open acknowledgement of the risk of greater economic dependence or the possible negative effects of Chinese involvement,” said Rouvinsky. “However, businessmen with links to Chinese companies are putting pressure on the government to strengthen and expand these commercial ties.”
China operates with a long-term vision and, at the moment, prioritizes continuity over speed, Rouvinsky explained. Instead of introducing new strategies, it is focused on consolidating those that have proven effective in its relations with South America. According to experts, in Latin America, Panama’s exit from the BRI might cause other countries to rethink their participation in this project.
Colombia, for now, remains cautious. “Although the possibility of joining the BRI is still on the table, the country is cautious not to jeopardize its strategic partnership with key partners in economic and security terms,” Rouvinski concluded.
