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The $4.5 billion Bogota metro being constructed by Chinese firms. (Photo: Empresa Metro de Bogotá)
Wednesday, May 10, 2023

Colombia: Unprepared for China

Colombia is unprepared to face Chinese ambition.

Global Americans

The People’s Republic of China’s influence in the Republic of Colombia has grown in size and scope over the past decade. China’s recent advance also applies to the rest of Latin America, where it has scaled up trade and investment. So far, 21 countries in the region have signed on to the Belt and Road Initiative (BRI), a Chinese government-funded project that they launched in 2013 to invest in infrastructure, including railways, roads, and ports. Chinese banks have lent money to finance infrastructure projects globally to be built by Chinese construction firms. The OECD expects Chinese investments and loans to exceed $1 trillion from 2017 to 2027. Argentina, Ecuador, and Peru have all signed up to be a part of the agreement, and as a result, they have received Chinese investments in ports, dams, highways, telecommunications, and energy infrastructure.

Although China’s influence in Colombia has grown over the last few years, Colombia has not yet signed on to the BRI. Nevertheless, Colombia’s largest recent infrastructure, transportation, and mining projects have been awarded to Chinese firms. These companies have won the tenders in open and transparent competition with other firms in accordance with Colombian laws and regulations, which favor low costs. China is expected to leverage investment opportunities in road, rail, port, and technology infrastructure. In addition, we expect they will seek opportunities in oil, gas, and mining projects scheduled to be tendered by the Petro administration in the short and medium terms. Though Colombia has openly embraced a warmer political and economic relationship with the middle kingdom, the South American country’s political, diplomatic, and economic institutions are ill-equipped to understand and address the risks this closer relationship entails.  

Surprisingly, China’s growing influence has not sprung a debate among Colombia’s academics, press, business leaders, and policymakers. The Colombian public ought to debate the relationship between Colombia and China, much like it has with Colombia’s relationship with the United States, Venezuela, Europe, and Russia. In 2021, at Colombia Risk Analysis, we sought to examine Colombia’s Role Amid Great Power Competition. We believe that China’s growing presence, coupled with a larger global debate about China’s rise as a global power, requires greater local scrutiny.

As such, Colombia Risk Analysis and Cifras & Conceptos conducted a study about local perceptions of Chinese investment in Colombia, including a poll showing the general public’s perception of China. Among our main findings, there are three underlying conclusions:

1.    Colombia’s government is unprepared to deepen its ties with China from economic, geopolitical, strategic, and oversight points of view. This conclusion does not simply speak to the current trade imbalance between the two countries or Colombia’s lack of a clear, coherent, and sustained foreign policy approach. It also entails how institutions that exercise control and oversight will be challenged by issues stemming from Chinese infrastructure companies, as they have happened elsewhere around the world and in Latin America.

2.    Political, security, and contract risks are on the rise for businesses and foreign direct investment in Colombia. Growing uncertainty in Colombia will affect Chinese companies’ perception of the country, especially when three of its major projects in Bogota, Buritica, and Caqueta face growing challenges. Uncertainty will not only affect Chinese companies looking to invest in Colombia but also foreign direct investment more broadly under the Petro administration.

3.    There is no uniform idea or viewpoint toward China among Colombian public opinion or public officials. The information gap not only stems from the language barrier between China and Colombia but also from stakeholders’ basic understanding of China—who often do not comprehend how that country is evolving and rapidly changing in a dynamic geopolitical landscape. The effects of the information gap can be mitigated by a more sophisticated press and civil society understanding of China; although, it is important to note that this process is constrained by the limited financial resources dedicated to the effort, the difficulties of conducting due diligence in China, and efforts by China to frame the narrative on its own terms.

Our interviews with sources throughout the country, including government officials, members of the local legislative bodies, community leaders, trade unions and associations, police and military authorities, private sector leaders, as well as journalists, NGO workers, and other relevant individuals from Barranquilla, Bogota, Buritica, Buenaventura, Cali, Cartagena, and Medellin suggest that there is no dominant narrative about Chinese investment in Colombia.

Among the poll’s main findings is that Colombians have a predominantly positive opinion about China: 67 percent believe Colombia should strengthen its economic ties with China, 59 percent believe it should strengthen its political relations, and 54 percent believe Colombia should foment Chinese investment in the country. At the same time, 44 percent of respondents believe Chinese investments follow tax law requirements, 42 percent believe they abide by labor regulations, 37 percent believe Chinese companies obey environmental regulations, and 27 percent believe they abide by human rights standards. The poll also shows that 37 percent of respondents hold China in “very good” regard, while 53 percent of niche market respondents (based in Bogota, Medellin, Cali, Barranquilla, and Bucaramanga) have a “very good” perception of China. The technology of Chinese goods is considered positive by over 75 percent of respondents. Likewise, 56 percent of respondents positively assessed the prices of Chinese goods, while 46 percent did so for their quality. Finally, 53 percent of respondents believe Chinese companies come to Colombia to make economic gains, 28 percent believe they come to expand their geopolitical footprint, 11 percent say their main motivation is to support development, and 7 percent believe they seek to expand their political influence.

China’s engagement in Colombia will likely center on its commercial and economic agenda in the near future. However, China’s political relationship with the Gustavo Petro administration will likely grow, not only as a result of the advances made under the presidencies of Juan Manuel Santos and Iván Duque but also thanks to President Petro’s inclination to diversify Colombia’s trade and investment partners. China will very likely continue encouraging Colombia to join the BRI. Although closer China-Colombia relations would face opposition from Colombia’s strongest trade partner and military ally, the U.S., growing antagonism between President Petro and the U.S. Republican Party would open the door for China-Colombia trade relations to deepen, particularly in strategic industries like energy, mining, port infrastructure, and digital infrastructure.

Several interviewees suggested that China has a long-term strategy to engage politically and economically with Colombia, which means that China will not interfere in Colombia’s domestic politics. This belief makes China an attractive partner for the Petro administration as it does not necessarily want to be held accountable by foreign powers for its present or future record on democratic governance, total peace, environmental, or human rights issues. It also helps that China’s President Xi Jinping is not accountable domestically for failed investment decisions, foreign entanglements, or when investments go awry.

On the other hand, Colombia does not seem to have a methodical approach toward China. As a result, Colombia’s China strategy lacks sophistication, planning, consistency, preparation, and depth. The country also lacks a generalized awareness, especially among Colombian public opinion and past and present officials, about China’s growing role in global affairs and its implications for Colombia’s geopolitical standing.

Colombia has plenty to gain from a more intertwined economic and political relationship with China, considering the impact Chinese infrastructure projects could have on the country’s development and overall well-being. But, for these projects to successfully foster development, Colombia must have strong financial and engineering oversight mechanisms to avoid the experience of countries where Chinese investment has had negative social, environmental, and economic fallouts. To best prepare, Colombia ought to closely examine the risks and opportunities of its growing relationship with China in order to strategically evaluate the best way to engage while prioritizing Colombia’s national interests.

This article -- adapted from Colombia Risk Analysis’ most recent report Local perceptions of Chinese investment in Colombia -- was originally published by Global Americans. Republished with permission from Global Americans and the authors. 




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