A Marshall Plan with Chinese Characteristics

In the fear of being a new target for Obama’s selective engagement strategy, Bejing is attempting to counterbalance the US president’s aim to shift his diplomatic focus to the Asia-Pacific. The immediate action is a repositioning of China in the voids the United States has so far left uncovered.

South America is attracting more and more Chinese investments while Washington is losing ground in what has always been considered its backyard. As Antonio C. Hsiang, Director of the Center for Latin America Economy and Trade Studies, noted on 'Want China Times', while the TPP (Trans-Pacific Partnership) is the cornerstone of American assertiveness in the East Asia-Pacific, the resistance advanced to the project by Japan might instill some doubt in South American partners about the strength of Washington in the region. It is not a coincidence that Mexico and Peru - albeit participating in the TPP negotiations - have spoken out at the annual conference of the Boao Forum for Asia 2013, the Davos of the East.

“The era of the Monroe Doctrine is over”, Secretary of State John Kerry officially announced at the top OAS (Organization of American States) meeting in November. A statement supported by the unequivocal reconfiguration of power in Latin America that sees the OAS joined by new federations -like the Community of Latin American and Caribbean States and the Pacific Alliance-, perceived as counterpoints to the dominance of the United States. In parallel to those Asia-Pacific countries, with several outstanding territorial disputes with Beijing, who gravitate closer to Washington in an anti-China function.

China has extended its influence on a global scale by implementing its own 'Marshall Plan'. As the developed West sank into the Great Recession, in 2009 the economist Xu Shanda advised that Beijing would have to use its forex reserves to finance infrastructure projects in emerging countries, whereas the governor of the People's Bank of China, Zhou Xiaochuan, proposed the creation of a "super-sovereign wealth fund." In more recent times, the concept was revived by the President of Ethiopia, Mulatu Teshome. Literally: "China is carrying out the same sort of role in Africa as to what the EBRD (European Bank for Reconstruction and Development) did after World War II in Europe under the Marshall Plan."

In July, on his second trip to Latin America as President, Xi Jinping announced the agreement reached for the construction of a railway which should extend for 3000 km connecting the East and the West Coast, starting in Brazil and ending in Peru. This is the largest railway project launched by Chinese leaders during their overseas trips, but not completely unexpected. Last summer, Beijing had signed a memorandum of understanding with Honduras to build a line between Amapala, on the Pacific, and Puerto Castilla, a port city on the Caribbean Sea. Since 2011, the Dragon is also in contact with Colombia for a railway expected to cross the country and unite the two oceans. According to Want China Times',"the July announcement didn't give details for the railway project, but what can be certain is that the project aims to break the monopolistic position of the Panama Canal controlled by the United States, making the railway the 'Panama Canal on land' to help China take a more active position in linking with Africa, Latin America and the Pacific Ocean".

Currently, international trade has only three solutions: Strait of Malacca, the Suez Canal and the Panama Canal and all three fall in the economic and geopolitical system created by Washington. The 'made in China' railroads and the project for the Nicaragua Canal (funded by a mysterious Chinese businessman allegedly linked to Beijing leaders) aim to rewrite the flows of a significant share of global trade. Last year, Colombia pointed the finger at China accusing it of pressuring the U.N. International Court over the assignment of 13-years-long maritime disputes to Managua. If the verdict had been in favour of Bogotá, the Nicaragua Canal would never see the light. The lack of diplomatic relations between Beijing and Managua -that still recognizes Taiwan as an independent state- is one of the few issues PRC can still use to silence the gossips on its implication in the project.

Beijing hopes that the soft power and economic support put in place in South America will be rewarded with political loyalty, a strategy already used effectively in Africa. This stance is confirmed in the July speech delivered by Xi Jinping to the National Congress of Brazil, in which  he made references to a 'new security concept' as well as to the hope for a greater cooperation between the two countries in international issues, urging mutual support in "sovereignty, security and territorial integrity". A question that Xi did not hesitate to speak of also during his visit to Buenos Aires, confirming that the Chinese firmly support Argentina's claim of sovereignty over the Falkland/Malvinas Islands (disputed with London) and the restart of negotiations based on relevant UN resolutions to solve the issue in a peaceful way. The statement has strategic value in the light of ongoing disputes between China and its Asian neighbors; a subject that Beijing cyclically brings into play at international summits.