China is Building Big in Latin America, Here's Why

For hundreds of years, the Latin American region has faced multiple forms of foreign involvement. The tragedies that were caused by centuries of Portuguese and Spanish reign are still present in the memories of the people of the region despite an end to the foreign rule more than a hundred years ago.

After the Europeans, the United States of America came in and tried implementing strategic methods to gain control over the region. For more than 20 years, the United States is still struggling to acquire control over the region. This is mainly because of the growing economy of China and its increasing demand for commodities.

China's involvement with infrastructure development in Latin America is not going to a halt any time soon. Latin America currently hosts big-scale infrastructure projects of approximately 59 developments. Of these 59 projects, China's construction in Latin America is fully and partially involved with investments totaling an amount worth 86 billion US dollars.

According to the records of Global Data, China's construction in Latin America is considerably high. Global Data guesses that one of the primary reasons for Chinese investors in funding for the infrastructure development in the Latin American region is the abundance of projects in the region involving Belt and Road Initiatives, or BRI.

"With diplomatic and economic relations between Latin America and the US more uncertain than ever, many governments across the region see Chinese infrastructure investment as a great alternative to existing traditional financing, in particular, because it does not require the arduous social and time-consuming environmental procedures that usually accompany the World Bank and the Inter-American Development Bank projects. Also, with the recent incorporation of several Latin American countries into the BRI, China's influence in the region is further strengthening," said an economist of Global Data, Dariana Tani.

Major scandals involving corruption in Latin America has opened doors to Chinese investors. This also includes take-overs of construction projects previously given to other contractors. An example of this take-over was the issue with Odebrecht, a construction company based in Brazil.

The significant involvement of Chinese contractors with infrastructure development projects had also resulted in some major issues.

"Local backlash against the lack of adequate environmental assessments and labor concerns are some of the main challenges facing Chinese-funded infrastructure projects in the region. For instance, China's reluctance to require reasonable standards for its BRI-related projects and loans has encouraged more corruption and debt in the region, as well as led local governments to pursue economically and environmentally unsustainable or non-viable projects," said Dariana Tani.

Jair Bolsonaro, Brazil's President, recently issued a complaint saying that China is "buying-up" the country of Brazil.

Despite the statement of the President of Brazil, his administration recently released a statement to the public saying that the country wants the Chinese contractors to invest in the infrastructure development in the country as long as it follows the laws of the country. The reason for this announcement on China's construction in Latin America is to provide local jobs to the citizens of Brazil.