For almost two centuries, the Monroe Doctrine has shaped great power interactions with Latin America. Designed to provide a framework for protecting nascent Latin American republics from European colonial interference, the Monroe Doctrine grew into a vision of United States (U.S.) leadership, if not hegemony and domination.
The Soviet Union made important inroads into the region during the Cold War, causing concern (and overreaction) among policymakers in Washington, but never really threatened U.S. hegemony. Today, however, the growth of China's economic relations with Latin America has the potential to erode U.S. leadership in the region. And with some Latin American countries chafing under American hegemony, China could make political and military inroads as well. Indeed, China's growing economic and military strength could provide the biggest challenge to the Monroe Doctrine in two centuries, leading to the question: will the U.S. respond? And if so, how?
In a recent simulation, Wikistrat probed potential Chinese and U.S. strategies for competition in Latin America, concluding that China cannot pose a significant threat to U.S. pre-eminence in Latin America. The greatest risk comes from the potential for U.S. over-reaction.
China's Entry Points
Military
In the short- and medium- terms, Latin America will remain beyond the reach of the Chinese military. The developing blue water navy and expeditionary capacity of the People's Liberation Army (PLA) Navy could change this in the long run, but for now China will play a distinctly second-tier role in Latin American military affairs.
However, China can make inroads into the Latin American arms market. Not all Latin American countries want to buy American equipment, and some that want to cannot. For example, several regional states desperately need to recapitalize their air forces, yet have little interest in either older American offerings or the F-35 Joint Strike Fighter. Similarly, attempts to export front-line European fighters have run into both fiscal and political obstacles, to the extent that Argentina is actively considering purchase of the JF-17. China's recent sale of eight diesel-electric submarines to Pakistan also potentially heralds an effort to grab part of the undersea warfare market in Latin America.
China also exports a variety of other military equipment, including missiles, ground vehicles, small arms and small naval vessels. Besides the obvious financial benefits, the export of arms permits broader Chinese military influence in the region, as the PLA and its industrial associates send trainers, engineers and advisors to recipient countries.
Economy
China's greatest opportunities come with economic penetration of the region. Indeed, China has already become the largest trading partner of several Latin countries, and has stepped up investments throughout the area. China has also combined its political and economic approaches by financing several struggling regional countries.
China can continue to increase its influence by facilitating further investment in both the private sector and regional transport infrastructure, as well as more aggressively attempt to establish an alternative financial infrastructure for Latin America, building on its efforts with the BRICS economies. The Asian Infrastructure Investment Bank can provide an alternative to the Washington Consensus model offered by the U.S. that could play well in both political and economic terms. China persisted in creating the bank despite strong opposition from the U.S., which worried it would undercut efforts to force developing economies into reform.
The U.S. Response
As alarming as this sounds, it shouldn't spur an over-reaction from the U.S. Wikistrat's analysis determined that China could have no more than a marginal regional impact, even under the best case assumptions. Washington has no need to respond aggressively to growing Chinese influence, even if Beijing makes a conscious decision to target the region, for two reasons.
First, the U.S. has the same massive military, economic and social advantages in Latin America that it held over the Soviets. The U.S. continues to enjoy longstanding ties with most of the militaries of the region, often revitalized by the War on Drugs. Latin American producers, businessmen and commercial officials also tend to have much greater experience with the U.S. market than with the Chinese. This is often the case even with respect to commodities: Venezuela, for example, has struggled to shift its oil exports away from the U.S. Finally, most Latin American countries have expatriate communities within the U.S., in some cases quite large ones, providing an anchor for U.S.-Latin American relations that China can never replicate.
Second, and perhaps more importantly, the U.S. need not view Chinese influence in Latin America in zero-sum terms. If Chinese cash fuels the development of Latin American infrastructure, American consumers and businesses still stand to win. Poverty and isolation in Latin America don't ever help the U.S., even if China takes some important steps towards increasing economic integration in the region.
The Dangers of Over-Reaction
U.S.-Soviet competition did not play out well for Latin America during the Cold War. The Soviets co-opted the legitimate grievances of workers, farmers and indigenous peoples into a broader project of weakening U.S. influence, while the U.S. responded by supporting authoritarian governments, often brought to power by military coups.
Undoubtedly, the U.S. should undertake steps to improve its position in Latin America. Accelerating the return of Cuba to the regional fold would help heal the wounds of political conflict over the past hundred years. Washington can also emphasize the further development of multilateral regional institutions, and try to bring more countries into agreements such as the Trans-Pacific Partnership. The U.S. military can refocus on the region, increasing cooperation on issues of regional concern above and beyond the War on Drugs, such as humanitarian assistance and disaster relief.
Nevertheless, the U.S. can also cause a lot of damage, not to mention alienation, if it panics about Chinese influence in Latin America. China cannot displace the U.S., and the U.S. stands to benefit from China's attention to the region.