China Stakes Its Claim in Latin American Energy:

The Biden Administration and China-LAC relations: What to do? The Biden administration is facing a LAC region devastated by COVID-19, with its countries facing the biggest economic contraction in their modern history. The IMF is predicting an overall GDP contraction of 8.1% in 2020 and a recovery of 3.6% in 2021. But it expects that most economies will not return to pre- pandemic growth until 2023. 27

Although yet to be fully defined, the new Biden administration’s prospective policies on engagement in Latin America and the scope of China’s role, will likely revert in many ways to what may be described as the status quo under Obama, which stressed policies of multilateralism and enhanced trade. 28 It also bears mentioning that during his eight years as Vice President, Biden was the Obama administration’s de facto Special Envoy for Latin American and the Caribbean. He traveled to the region more than a dozen times and paid particular attention to issues in Central America and the Caribbean. The Biden administration’s hemispheric plan will center around the expansion of foreign aid, mobilization/facilitation of private investment, anti- corruption and poverty reduction with a specific focus on women in the region. 29 This presents a unique opportunity for the incoming administration to encourage expanded regional cooperation in LAC in close collaboration with its traditional democratic allies (including Canada, Japan, the EU and UK) on these and other issues as a strategic counterweight to China. For LAC, Biden also plans to send aid to areas like Honduras, Guatemala and El Salvador – the Northern Triangle – in an effort to ease the poverty and violence that encourages migration. Again, these challenges will

Trade between China and Latin America grew 19% year-over-year in 2019, to $307.4 billion, according to Fitch Solutions. China is Latin America’s second-largest trading partner, after the U.S.

INSTITUTE OF THE AMERICAS 15