Chile: The Door to China’s Influence in Latin America?

Beijing’s alleged media strategy against Hong Kong’s demonstrators through diplomatic statements and an aggressive defense on its geopolitical domains is not limited to Central and Eastern Europe, but it is rather a worldwide strategy in which even the smallest country can be targeted. Chile has become a case of this.

In September 2019, Xu Bu, the Chinese ambassador in Santiago, published an op-ed in El Mercurio, one of the most important newspapers in Chile. In his piece, he attacked Joshua Wong, a known Hong Kong activist, and addressed a meeting between Wong and two Chilean congressmen. He also warned that the congressmen should “meet with the right people” instead of “social thugs”, as protesters are labeled by China.

Although many criticized the ambassador because of this statement, such public appearances of Chinese diplomats in Chile are becoming more common as the regime has increased its interest in the country, not only economically, but politically and strategically.

It is not a secret that Chile has long been the PRC’s door to Latin America. Not only was it the first country in Latin America to establish diplomatic relations with the Asian power in 1971 (with a background of having consulates there for 150 years), but China is interested also in Chile’s strategic location and its 4,000 kilometers of coast reaching the Pacific Ocean. While some other nations in the region, like Venezuela or Ecuador, were signing dubious contracts and are currently dealing with heavy debts with Beijing and Chinese companies, Chile has seemed free of these constraints, acting mostly as a normal trade partner, importing Chinese manufacturing products and exporting copper and agricultural products to the Asian giant.

Therefore, China’s growing influence flies under the radar and is not often seen as a threat by the public. But there are clear signs of influence, which has been applied through China’s well-thought sharp power strategy. This consists of tightening economic agreements, persuading elites, addressing cooperation goals, inviting students to universities in China, lobbying the most important ministries and softly communicated the consequences of not following China’s rules, with press releases, open statements or private meetings between authorities and Chinese representatives.

The economic cooperation has been increasing lately with Chile taking part in the Belt and Road initiative and exports to China representing 30% of Chile’s overall exports. The areas of cooperation enlarged and Chinese investments rose dramatically, from the lithium market to energy and telecommunication infrastructure. Although Chile doesn’t rank among the most popular destination for Chinese investments to Latin America, in just two years the investment rose from 350 million USD (2016) to 6.6 billion USD (2018). Last year, SGID, a state-owned firm, bought the electricity service company Chilquinta in Chile’s second most populated region for around 2.3 billion USD. The amount is 6 times bigger than Chinese investment in 2016 alone.

Effective Influence on Local Politicians

Beijing’s companies and representatives have increased their efforts to lobby both executive and legislative branches of power. One of the first glimpses of this influence was seen in 2006, when Dalai Lama decided to visit Chile for the third time. The religious figure was tagged by the previous ambassador, Liu Yuqin, as “the biggest owner of pre-revolutionary servants and slaves, not a man of peace, but a separatist”. Once he had arrived, Bachelet’s administration refused a meeting with the Tibetan spiritual leader and later, the Senate’s president, Eduardo Frei, withdraw the invitation for an appointment just minutes before it was scheduled. He allegedly had to turn around his car while heading there.

Regarding lobbying at a company level, according to an exploratory research done by FPP in 2019, Chinese — mostly state-owned — firms, such as ZTE or China Civil Engineering Construction Company, have visited the country’s main ministries around 70 times in the past two years, mostly looking for information on investment and local regulations. This might look like a usual practice, but Chinese public companies meet authorities more than any other country’s firms and their presence must not be overlooked, as their investments have been proven to have negative effects on corruption within the region, as corrosive capital has eroded not only projects but institutions.

Moreover, the conflict between the PRC and Taiwan has revealed other tactics used by Beijing to establish its agenda. In 2018, the Chinese embassy pushed for the withdrawal of a friendship agreement with Taiwan’s Legislative Yuan that was being discussed at the Congress. Later, during 2019, China aimed to persuade many members of the Chamber of Deputies to visit Beijing, paying for the full trip with an average 10,000 USD per person, according to documents issued under the transparency law that governs public institutions. In response, Taipei Economic and Cultural Office in Chile, Taiwan’s only recognized institution in the country, has also sponsored visits of deputies.

Beijing’s tactics thus seems rather soft but efficient. Although in Chile Chinese companies haven’t invested as much as in other countries in the region, China seems capable of reaching its political goals.

China’s Increased People-to-people Strategy in Chile

Similar to other countries, China started to be more active in media. It began with humble radio programs sponsored by Confucius Institutes. Lately, Beijing has started to increase its presence in written newspapers, mostly by purchasing news pages and installing pre-written articles there. One notable example came in October 2019, when the embassy bought eight full pages at El Mercurio to commemorate the revolution’s 70th anniversary, with articles written by diplomats, academics, public opinion leaders and businessmen. Then, after Christmas, Beijing bought two more pages to publish Xi Jinping’s “New Year greetings” to Chileans.

Recently the second largest local newspaper, La Tercera, announced a partnership with the Chinese Media Group, a state-owned media association, to “disseminate” Chinese culture (and interests) among the population. This allows the Chinese state group to publish information, op-eds and news coverage directly in the Chilean media, for example, a press release about the Belt and Road Initiative.

The attempts to influence the China narrative in the country went mostly unnoticed, because China’s presence in Chile is rarely questioned, and most of the media coverage on local affairs remains within the economic area. But China’s strategy is not completely unknown, as public figures such as Francis Fukuyama, began to warn Chileans  about corrosive capital and criticize China’s means in Latin America. This was especially critical as the APEC summit was going to be hosted in Chile, before October’s social crisis.

It is a common practice to spread country’s soft power by awarding scholarships to local students. Beijing has not been an exception in this regard, offering a number of scholarships every year. Besides, many of Chile’s main universities consider China as an attractive destination for learning, both for scholars and students. The Confucius Institute -which regional centre is located in Santiago – is also quite active, signing agreements with several educational and cultural centers, including one of the main traditional colleges in the country, and often co-organizing seminars about China in the Latin American context. This year, the Tsinghua centre for Latin America will start its operation, aiming at recruiting Chileans to study at the university, signing more agreements with several universities both in Chile and the region, and cooperating in science, technology, engineering and math and administration studies. 

Chile-China Relations in 2020: What to Look at?

After October’s crisis in Chile, economic and political stability has been put over the edge. There is no way to know how the country and its relations will evolve, especially considering the upcoming referendum of next April. On the other hand, coronavirus will need China’s full attention and containment in the next months, as the virus will not only have a human impact, but economic consequences that will add more uncertainty to the international market.

Will all that said, there are still two key questions that might be resolved in 2020: the adjudication of a 5G technology public contract sought by Huawei, and the decision on the optic fiber cable that will connect Asia and Latin America through the Pacific. The implications for internet safety and liberty regarding these two projects might be critical, as digital surveillance has been a part of the debate in the last years. These two issues will test the Chile’s position on China and its companies.

This article does not intend to state the relation between nations has been entirely abusive. In fact, cultural exchange is often good for growing, not only economically, but humanly. Chile has benefited of migration, exchange and a more wide view of its role on the pacific and this has even open opportunities to collaborate with other pacific nations.  Nevertheless, given the examples of Beijing’s influence abroad and impacts on local institutions as well as Chile’s recent events, it is necessary to be cautious and ask for transparency. Only through transparency and diversification of international relations Chile will be able to grow into a less dependent country with a dynamic economy and a culture open to debates.