What Xi’s Third Term Means for Latin America
Slower Chinese growth and heightened tensions with Washington will echo in the region.
Welcome back to Foreign Policy’s Latin America Brief.
Welcome back to Foreign Policy’s Latin America Brief.
The highlights this week: How changes announced at the 20th National Congress of the Chinese Communist Party will affect Latin America, the potential EU-Mercosur trade deal finds new legs, and Brazilians prepare for the Lula-Bolsonaro runoff.
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Have questions about the Brazilian election campaign, runoff results, or the future of Brazil generally? Join me for a special live chat on Monday, Oct. 31, at 1 p.m. EDT. Foreign Policy subscribers can submit their questions ahead of time here.
Surviving the Storm
Over the past two weeks, the 20th National Congress of the Chinese Communist Party confirmed a trend that is already underway: Beijing’s decreased focus on—and expectations for—achieving the kind of rapid economic growth the country experienced before the slowdown of the 2010s, followed by the COVID-19 pandemic. In his speech, President Xi Jinping instead emphasized “common prosperity” and also made clear that big changes to his growth-hampering zero-COVID strategy are not in the cards.
This has deep implications for Latin America. China is the top trade partner of many South American countries, and their economic boom in the 2000s and early 2010s reflected China’s own. At the time, countries from Colombia to Argentina sold foods and other raw materials to China as the country experienced dizzying growth and urbanization. That China is now expected to grow more slowly will similarly have repercussions in Latin America. Between 2003 and 2013, China’s economy grew an average of 10.3 percent annually. It is on track to grow around 3.3 percent this year. Latin America will grow about 3.5 percent, the International Monetary Fund projected this month.
The slowing of Chinese growth could affect Latin American economies in three important ways, Argentine economist Martín Kalos of EPyCA Consultores said: It may reduce direct demand for Latin American exports, act as a drag on global commodity prices, and decrease Chinese investment in the region.
Because the market for commodities exports is global, “it’s not that difficult to find other buyers for commodities at the going international rate” if Chinese demand drops, Kalos told Foreign Policy. That demand could drop most quickly for food products. At the party congress, Xi emphasized China’s long-term focus on food security and domestic farming; his government has already announced plans to increase domestic soy production, which stands to hurt overseas sellers such as Brazil. But a falloff in Chinese investment is much harder to make up for. Projects in Latin America financed through China’s Belt and Road Initiative or via direct Chinese investment may now move slowly.
Xi’s unprecedented third term as China’s leader also arrives alongside a sharp escalation in U.S.-China commercial and political tensions, as evidenced by the sweeping U.S. export controls imposed earlier this month on technologies made with U.S. parts and sold to China to produce advanced computer chips. “The U.S. president has committed to rapid decoupling [from China], whatever the consequences,” the Carnegie Endowment for International Peace’s Jon Bateman wrote in Foreign Policy on Oct. 12.
Latin American countries have already been grappling with the consequences of U.S.-China tech decoupling since at least 2019, when Washington began pressuring countries in the region to reject contracts with Chinese tech giant Huawei. These tensions came to a head last year, when Brazil announced it would not exclude Huawei from building its commercial 5G network. In a compromise, Brasília said it would build a separate network for government communications under requirements that excluded Huawei’s participation on a technicality. Huawei is also constructing new cloud-computing data centers in Chile and Mexico that are set to become operative early next year, a company executive said at a September conference.
After Latin American officials pushed Washington to stop pressuring them about their business with China—or at least offer a comparable alternative—U.S. Secretary of State Antony Blinken said in a speech in Ecuador in October 2021 that Washington was not asking countries to “choose between the United States and China.” This year, both Ecuador and Uruguay launched free-trade talks with Beijing. The countries’ actions could be classified as what some scholars have dubbed active nonalignment: seeking to benefit from relations with both sides of a geopolitical rift.
The new escalation in U.S.-China tensions, however, may make staying neutral more difficult. Latin American policymakers should “fasten their seatbelts,” Francisco Urdinez, a political scientist at Pontifical University of Chile and a fellow at the Wilson Center, told Foreign Policy.
Chile’s Congress is taking the right step, he said, by moving this month to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade deal and thus gain greater access to markets beyond both the United States and China.
The ability to maintain a nonaligned foreign policy depends on the talent and preparedness of Latin American diplomats, Urdinez said. Before President Jair Bolsonaro took office in Brazil in 2019, it was Brazilian diplomats who appeared most capable of this, but Bolsonaro “depleted” the country’s diplomatic corps by scorning well-respected diplomats for top posts, Urdinez said. Instead, he elevated right-wing ideologues.
Bolsonaro’s foreign policy produced bumpy relations both with the United States and China at different moments. But pressure from soy venders and others in Brazil’s powerful agribusiness sector—where China is a top client—ultimately led Bolsonaro to drop his anti-China rhetoric, Creomar de Souza, CEO of Dharma Political Risk and Strategy, said in an interview. Brazil’s trade with China has now soared to historic highs, while Brazil continues to experience strained relations with Washington, the Getulio Vargas Foundation’s Oliver Stuenkel wrote in Foreign Policy in September.
If Bolsonaro is reelected in Sunday’s presidential runoff vote, we might expect more of the same. If, however, his opponent, former President Luiz Inácio Lula da Silva, is elected, it could mean a significant shift not only in Brazil’s foreign policy but in regional efforts to hold a joint position to weather U.S.-China tensions, de Souza said. During his 2003-2010 tenure in office, Lula had positive relations with both Washington and Beijing, while also investing heavily in Latin American regional integration.
Such regional articulation is much more difficult today, de Souza said, but if effective it could work to shift a status quo in which “in Latin America, we are not the locomotive of international relations. We are the passengers.”
Thursday, Oct. 27, to Saturday, Oct. 29: Uruguayan President Luis Lacalle Pou visits Japan.
Friday, Oct. 28: Josep Borrell concludes his South America trip in Argentina.
Sunday, Oct. 30: Brazilians vote in a presidential runoff election.
What We’re Following
Rekindling an old flame. Josep Borrell, the European Union high representative for foreign affairs and security policy, has been in Uruguay and Argentina this week for talks focused on trade. In Buenos Aires, he said that he hopes talks can resolve outstanding disagreements in the long-stalled trade deal between the EU and South American customs union Mercosur by the end of the year.
Borrell’s statement supposes either a Lula victory in Brazil on Sunday or a shift in the EU’s stance on Amazon deforestation, as the deal was paused in part over French opposition to deforestation under the Bolsonaro government. Some opposition, however, also came from the European farming and ranching sectors, which aimed to protect products such as beef.
Europe’s search for trade partners other than China—and sources of grain other than Russia and Ukraine—appears to have shifted its stance in recent months. Borrell said in Buenos Aires that Latin America could help “feed more people.”
Sanctions on Haiti. Last Friday, the United Nations approved a U.S.- and Mexico-proposed sanctions regime on criminal gangs in Haiti as well as individuals and entities that support them financially. While U.N. Secretary-General António Guterres voiced support for an international military force to intervene in the country’s crisis, talks on who would participate in such a force had yielded no results as of Thursday.
On Monday, U.S. State Department spokesperson Ned Price said assembling such a force remains an “urgent priority” for the United States, and on Thursday, U.S. Secretary of State Antony Blinken began a two-day trip to Canada that was set to address the crisis in Haiti. Washington and Ottawa have cooperated in recent months in sending security equipment to Haiti’s government.
Politicized poetry. Nobel laureate Pablo Neruda has long been Chile’s most celebrated poet. But in 2018 the country saw increased feminist scrutiny of Neruda’s life and work, including his account of raping a cleaning lady in his 1974 memoir. Since then, some Chilean schoolteachers began limiting Neruda’s work in their curricula and adding more work by female poets. John Otis reported for NPR this month that the country’s national digital library had stopped purchasing Neruda’s works.
In the meantime, Chilean feminists—and Chile’s government—have encouraged celebration of the work of Gabriela Mistral, a poet who became the first Latin American of any gender to win a Nobel Prize in Literature in 1945. Mistral was also a diplomat, and before that, a teacher and education reformer in both Chile and Mexico. During her time spent living in Mexico in the years following the Mexican Revolution, she helped design a vast expansion of Mexico’s primary public education system.
This week, Mexico donated a mural to Chile that celebrated Mistral’s contributions. It was a replica of a painting completed by Mexican muralist Roberto Montenegro in the 1920s, and was unveiled in Santiago on Tuesday.
Question of the Week
The potential EU-Mercosur trade deal is one of the trade deals that has taken the longest to negotiate. In what year did talks start?
That’s 22 years—and counting.
FP’s Most Read This Week
• What the Hell Just Happened to Hu Jintao? by James Palmer
• Iran Is Now at War With Ukraine by John Hardie and Behnam Ben Taleblu
• Russia’s Ukraine Disaster Exposes China’s Military Weakness by Tai Ming Cheung
In Focus: Brazil’s Showdown Approaches
The final week of campaigning before Brazil’s presidential runoff election this Sunday started with several literal bangs. On Oct. 23, longtime Bolsonaro ally and former lawmaker Roberto Jefferson fired dozens of gunshots and threw grenades at two federal police officers who approached his home to move him from house arrest to prison under court orders. Both officers were wounded.
Jefferson had been in pretrial detention while being investigated for a charges related to a digital misinformation scheme that spread attacks against institutions such as the Brazilian Supreme Court.
Bolsonaro, a gun enthusiast, said in August during a conversation about his own fears of being arrested that he “would shoot to kill” and “preferred to die” than go to prison, Folha de São Paulo and Metrópoles reported. But he quickly distanced himself from Jefferson and his actions after the ambush, falsely claiming that the two men were not connected and that no photos of them together had ever been taken.
Over the course of the week, opinion surveys have continued to show a very slight lead for Lula. As of Wednesday, poll aggregator PollsterGraph calculated that Lula led Bolsonaro by 51.4 percent to 48.6 percent. Polls underestimated support for Bolsonaro in the first round of voting on Oct. 2.
The anticipated tight margin means small fluctuations in turnout can be decisive. I reported this week on the factors that could affect turnout in the runoff, including the costs of travel to the polls, campaigning by local politicians, and some employers’ illegal efforts to influence their workers’ votes.
Election law experts are also monitoring the behavior of volunteer poll observers, who have been recruited by pro-Bolsonaro politicians spreading misinformation related to the vote. The tactic is similar to that of U.S. groups that continue to reject the result of the 2020 presidential election.
Bolsonaro has for months sown doubt about the reliability of Brazil’s electronic voting machines, laying the groundwork to potentially contest the election result if he loses. On Monday, he made what Brazilian Supreme Court justice Alexandre de Moraes described as a baseless claim of election fraud of another kind, saying that radio stations had denied him the advertising time to which he was entitled by law.
Election authorities dismissed Bolsonaro’s complaint as lacking proof. But it shows that if he loses the election, he is apparently open to claiming fraud on grounds other than the reliability of voting machines. Their purported history of fraud is a myth he has invested years in crafting, the New York Times reported this week.
Catherine Osborn is the writer of Foreign Policy’s weekly Latin America Brief. She is a print and radio journalist based in Rio de Janeiro. Twitter: @cculbertosborn
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