Latin America Is Quickly Becoming A Key Battleground For China And The United States

Latin America has become a battleground for the United States and China. At the surface is a dispute over natural resources that quickly moves into the grounds of geopolitics to determine spheres of regional influence. Argentina has emerged as a territory in flux, as a nation rich in some of the world’s most coveted commodities that seeks to keep some sort of balance between the two superpowers, looking to harness its export potential with a key geographical positioning that could grant China a foothold in region of key importance, the Southern Atlantic. With Argentina’s Economy Minister, Sergio Massa, leading a trade mission focused on the short-term need to shore up the government’s coffers—and a contended election charged with ideological extremes regarding the relationship with the US and China around the corner—an important chapter in how the relationship will evolve is currently being played out.

Massa’s mission is straightforward, and superficial. The Argentine government is currently cash strapped amidst a combination of exogenous shocks and unforced errors that has led to triple digit inflation and a situation of chronic and endemic economic fragility. In a country with a vast supply of “crown jewels” to put on the negotiating table, China appears as a potential, and necessary, savior. In play are the energy exports from Vaca Muerta, the world’s second largest shale field that is rapidly accelerating its production and exporting capacity, an incredibly productive agro-exporting sector, barely tapped lithium and copper production capacity, and even a burgeoning knowledge economy sector in serious need of foreign demand, to name a few. At the same time, US influence in Latin America—dubbed by some in the United States as its backyard, much to the distaste of the population—is strong. US companies have a large presence in the region, as does the State Department. The International Monetary Fund is a major player, particularly in Argentina, the recipient of the IMF’s largest ever bailout that is in constant political negotiation in order to avert another calamitous debt default.