1
00:00:04,840 --> 00:00:07,440
Speaker 1: It's the Big Take from Bloomberg News and I Heart Radio.

2
00:00:07,880 --> 00:00:11,920
Speaker 1: I'm West Cosova today why China is winning over some

3
00:00:12,000 --> 00:00:26,160
Speaker 1: of America's closest neighbors. The other day on the show,

4
00:00:26,280 --> 00:00:29,800
Speaker 1: we talked about how China is spending hundreds of billions

5
00:00:29,800 --> 00:00:34,320
Speaker 1: of dollars on big energy and infrastructure projects to set

6
00:00:34,360 --> 00:00:38,280
Speaker 1: up their economy for the future. Today, we're taking another

7
00:00:38,320 --> 00:00:41,360
Speaker 1: look at how China is thinking ahead in a way

8
00:00:41,400 --> 00:00:44,160
Speaker 1: the US is in. This time, it's not the money

9
00:00:44,240 --> 00:00:47,639
Speaker 1: China is spending inside its own nation, but the enormous

10
00:00:47,640 --> 00:00:52,280
Speaker 1: amounts it's lending to other countries across Asia, in Africa,

11
00:00:53,000 --> 00:00:56,160
Speaker 1: and our focus today in Latin America, right next door

12
00:00:56,160 --> 00:01:00,480
Speaker 1: to the United States. China is building deep trading partnerships

13
00:01:00,560 --> 00:01:04,480
Speaker 1: and economic ties with several of America's neighbors in the region.

14
00:01:04,920 --> 00:01:08,240
Speaker 1: And that could also pay off politically for China in

15
00:01:08,280 --> 00:01:13,200
Speaker 1: the ongoing rivalry between Washington and Beijing. To unpack all this,

16
00:01:13,400 --> 00:01:16,960
Speaker 1: I'm happy to welcome Rebecca Chewing Wilkins back to the podcast.

17
00:01:17,360 --> 00:01:20,560
Speaker 1: She's a government reporter for Bloomberg based in Hong Kong.

18
00:01:22,880 --> 00:01:27,040
Speaker 1: Rebecca China has spent that sums helping nations a cross

19
00:01:27,120 --> 00:01:33,040
Speaker 1: Asia and in Africa, Latin America build huge, expensive infrastructure

20
00:01:33,040 --> 00:01:35,440
Speaker 1: projects that would have been out of reach for a

21
00:01:35,440 --> 00:01:37,759
Speaker 1: lot of them otherwise. This is part of the huge

22
00:01:37,840 --> 00:01:42,600
Speaker 1: Belt and Road Initiative or b r I that President

23
00:01:42,680 --> 00:01:46,800
Speaker 1: Jumping had made a centerpiece of his agenda for the

24
00:01:46,800 --> 00:01:50,440
Speaker 1: country's future. Can you explain what's the big goal? What

25
00:01:50,640 --> 00:01:55,080
Speaker 1: is China aiming to achieve with these foreign investments. Well,

26
00:01:55,160 --> 00:01:59,920
Speaker 1: China has ultimately sought to reshape the global order. It's

27
00:02:00,080 --> 00:02:05,080
Speaker 1: ultimately about trying to create this counterweight to US dominance

28
00:02:05,120 --> 00:02:09,760
Speaker 1: as it perceives it, and that's primarily been exercised through

29
00:02:10,040 --> 00:02:13,680
Speaker 1: season pings sort of landmark foreign policy agenda which you

30
00:02:13,720 --> 00:02:16,519
Speaker 1: alluded to. So it's the Belton Road Initiative. It was

31
00:02:16,560 --> 00:02:22,560
Speaker 1: really focused around investment, building out infrastructure projects, so railway projects, stadiums,

32
00:02:22,680 --> 00:02:24,920
Speaker 1: and doing that brings other benefits, right, yes, so in

33
00:02:25,000 --> 00:02:28,280
Speaker 1: some sense this this was also of course about creating

34
00:02:28,360 --> 00:02:33,360
Speaker 1: diplomatic ties with many of these countries, and over the

35
00:02:33,440 --> 00:02:36,920
Speaker 1: last twenty years we have seen China sort of using

36
00:02:37,280 --> 00:02:40,880
Speaker 1: some of these financial incentives that it's rolled out through

37
00:02:41,320 --> 00:02:45,279
Speaker 1: b r I as it's known, in order to for example,

38
00:02:45,760 --> 00:02:51,160
Speaker 1: build votes in the United nations and further its objectives overseas.

39
00:02:52,000 --> 00:02:55,320
Speaker 1: China extended many of the big loans for these projects

40
00:02:55,360 --> 00:03:00,639
Speaker 1: back when its own economy was rapidly growing. Now j

41
00:03:01,040 --> 00:03:04,920
Speaker 1: Ping has solidified his power at home. He was just

42
00:03:05,080 --> 00:03:10,000
Speaker 1: recently installed for an unprecedented third term, but China's economic

43
00:03:10,080 --> 00:03:14,360
Speaker 1: growth has dramatically slowed, along with a lot of the

44
00:03:14,400 --> 00:03:17,120
Speaker 1: rest of the world, and he's facing challenges at home.

45
00:03:17,600 --> 00:03:23,280
Speaker 1: So has this ambition outside its borders paid off in

46
00:03:23,320 --> 00:03:30,280
Speaker 1: the way that China anticipated. The consideration here is about

47
00:03:30,680 --> 00:03:33,239
Speaker 1: when we look at the past decade of season Ping

48
00:03:33,280 --> 00:03:36,560
Speaker 1: and power, whether or not b r I has been successful,

49
00:03:36,800 --> 00:03:40,560
Speaker 1: whether it has successfully created a network that China is

50
00:03:40,600 --> 00:03:45,080
Speaker 1: able to leverage and extent um and increasingly, one question

51
00:03:45,280 --> 00:03:48,200
Speaker 1: is becoming whether or not the sort of spending the

52
00:03:48,280 --> 00:03:51,640
Speaker 1: extent of it. By some estimates, they spent about one

53
00:03:51,720 --> 00:03:55,920
Speaker 1: trillion dollars on b r I and the majority of

54
00:03:55,960 --> 00:03:59,520
Speaker 1: that I think about six of Chinese loans to overseas

55
00:03:59,600 --> 00:04:03,800
Speaker 1: nations now are now with countries that are in financial distress.

56
00:04:03,840 --> 00:04:06,480
Speaker 1: So one big question for China is whether or not

57
00:04:06,560 --> 00:04:11,440
Speaker 1: it's now willing to ultimately become the world's distress Debt creditor,

58
00:04:11,920 --> 00:04:14,720
Speaker 1: and so China increasingly is having to face the reality

59
00:04:14,840 --> 00:04:18,080
Speaker 1: of having extended all of this credit across the globe

60
00:04:18,360 --> 00:04:22,240
Speaker 1: and what that means for its role and the financing

61
00:04:22,240 --> 00:04:25,560
Speaker 1: itself to China. I think isn't sort of substantive enough

62
00:04:25,600 --> 00:04:29,840
Speaker 1: to really threaten China economically, but it is sort of

63
00:04:30,080 --> 00:04:34,799
Speaker 1: putting China into a corner. The critics have often viewed

64
00:04:34,880 --> 00:04:38,760
Speaker 1: China's attempts to extend influence through this lending as debt

65
00:04:38,800 --> 00:04:42,680
Speaker 1: traped diplomacy, and so it's also concerned with that narrative

66
00:04:43,240 --> 00:04:46,279
Speaker 1: trapped diplomacy. Can you say a bit more about that,

67
00:04:46,640 --> 00:04:50,160
Speaker 1: is that the idea that China has leverage over these countries. Yes,

68
00:04:50,200 --> 00:04:53,080
Speaker 1: so the debt trapped diplomacy, as you say, is this

69
00:04:53,160 --> 00:04:58,120
Speaker 1: idea that you know, debt is extended to somehow deliberately

70
00:04:58,120 --> 00:05:02,200
Speaker 1: exert influence in a way that really compromises that borrowers

71
00:05:02,600 --> 00:05:06,520
Speaker 1: ability to operate. Although in some ways, of course, having

72
00:05:06,560 --> 00:05:10,200
Speaker 1: conditions of lending is quite normal, and it is important

73
00:05:10,279 --> 00:05:13,640
Speaker 1: to remember that in many cases, for example, when we

74
00:05:13,680 --> 00:05:18,479
Speaker 1: think about Latin America, China lent quite substantive large amounts

75
00:05:18,480 --> 00:05:22,560
Speaker 1: of money because actually Latin American countries weren't able to

76
00:05:22,680 --> 00:05:25,120
Speaker 1: seek that type of lending from say the I m F.

77
00:05:25,200 --> 00:05:29,400
Speaker 1: They weren't able to meet those conditions. And increasingly the

78
00:05:29,720 --> 00:05:32,560
Speaker 1: investment that we've seen has gone from just sort of

79
00:05:32,600 --> 00:05:36,720
Speaker 1: infrastructure projects like building a railway, say, to actually investing in,

80
00:05:36,760 --> 00:05:40,599
Speaker 1: for example, key raw materials, so investing in lithium or

81
00:05:40,640 --> 00:05:46,960
Speaker 1: copper I m F. That's the international monetary fan helps

82
00:05:47,200 --> 00:05:51,800
Speaker 1: developing countries with financing. Given the economic climate in China

83
00:05:52,120 --> 00:05:55,840
Speaker 1: and in the countries that lends to, is China still

84
00:05:55,920 --> 00:05:59,360
Speaker 1: making these big investments abroad now when it comes to

85
00:05:59,680 --> 00:06:04,200
Speaker 1: be R I. I think there has been somewhat of

86
00:06:04,200 --> 00:06:07,640
Speaker 1: a reconsideration of how effective that's been. We have seen

87
00:06:07,680 --> 00:06:10,760
Speaker 1: a pull back, for example, in the spending of the

88
00:06:10,760 --> 00:06:14,400
Speaker 1: b R I that it could fell in the first half.

89
00:06:14,839 --> 00:06:21,000
Speaker 1: There has been no new projects issue to countries like Russia, Egypt, Pakistan,

90
00:06:21,600 --> 00:06:25,279
Speaker 1: So there does seem to be some re calibration here.

91
00:06:25,360 --> 00:06:27,800
Speaker 1: And we also have these reports that they may now

92
00:06:27,880 --> 00:06:32,120
Speaker 1: finally be considering writing off some of these loans and

93
00:06:32,520 --> 00:06:37,360
Speaker 1: potentially even perhaps offering depth forgiveness, and that really is

94
00:06:37,400 --> 00:06:40,240
Speaker 1: a shift for China. We haven't seen them offering that

95
00:06:40,560 --> 00:06:42,920
Speaker 1: in the past. They've sort of tended to prefer this

96
00:06:43,120 --> 00:06:48,360
Speaker 1: so called extend and pretend action plan for years, g

97
00:06:48,560 --> 00:06:52,400
Speaker 1: and other senior of Chinese officials, they talked about Belton

98
00:06:52,480 --> 00:06:55,560
Speaker 1: Road all the time, but more recently now a lot

99
00:06:55,600 --> 00:06:58,400
Speaker 1: of talk about that instead. Now we're hearing all that

100
00:06:58,480 --> 00:07:02,440
Speaker 1: from Beijing about the Global Development Initiative for all you

101
00:07:02,680 --> 00:07:05,680
Speaker 1: acronym fans as g d A instead of b r I.

102
00:07:06,520 --> 00:07:09,960
Speaker 1: So is the g d I the Global Development Initiative

103
00:07:10,520 --> 00:07:13,840
Speaker 1: rebranding of Belton Road to make us sound more like

104
00:07:14,040 --> 00:07:16,320
Speaker 1: it's about helping other countries instead of being about China,

105
00:07:16,440 --> 00:07:19,120
Speaker 1: or is it something new? The key difference that we

106
00:07:19,200 --> 00:07:22,400
Speaker 1: really see is the difference in focus. So b r

107
00:07:22,400 --> 00:07:27,080
Speaker 1: I very much focused on infrastructure and investment via infrastructure,

108
00:07:27,520 --> 00:07:30,520
Speaker 1: whereas the g d I is much more focused on

109
00:07:30,560 --> 00:07:34,240
Speaker 1: this idea of development. And the other really key distinguishing

110
00:07:34,280 --> 00:07:37,360
Speaker 1: factor here, I think is this alignment between the g

111
00:07:37,520 --> 00:07:41,040
Speaker 1: d I goals and aims and the u n's own

112
00:07:41,160 --> 00:07:47,200
Speaker 1: sustainability goals. So we see China somehow looking to operate

113
00:07:47,760 --> 00:07:51,040
Speaker 1: or move within a framework that is aligned more with

114
00:07:51,080 --> 00:07:54,000
Speaker 1: the United Nations. That's very very different from the b

115
00:07:54,240 --> 00:07:58,520
Speaker 1: r I, which is really a kind of China constructed notion,

116
00:07:59,240 --> 00:08:03,640
Speaker 1: how's all this sending abroad playing at home in China.

117
00:08:04,560 --> 00:08:07,840
Speaker 1: Part of that China dream that sees in Pink set

118
00:08:07,840 --> 00:08:11,240
Speaker 1: out right at the beginning of his leadership was this

119
00:08:11,320 --> 00:08:16,920
Speaker 1: promise for national rejuvenation, essentially to restore China's place in

120
00:08:16,960 --> 00:08:21,080
Speaker 1: the world economically but also politically. And so I think

121
00:08:21,200 --> 00:08:25,520
Speaker 1: for the average Chinese citizen there's definitely an increased sense

122
00:08:25,560 --> 00:08:30,040
Speaker 1: of nationalism, of Chinese pride, and this idea that China

123
00:08:30,160 --> 00:08:32,920
Speaker 1: is an operator on the global stage that can rival

124
00:08:33,040 --> 00:08:36,640
Speaker 1: the US. Is there any feeling among Chinese citizens that

125
00:08:36,679 --> 00:08:39,800
Speaker 1: their leaders are spending a lot of money overseas when

126
00:08:40,520 --> 00:08:44,160
Speaker 1: workers at home are struggling. Is has been interesting because

127
00:08:44,200 --> 00:08:49,000
Speaker 1: the discussion about Chinese debt forgiveness, for example, has actually

128
00:08:49,040 --> 00:08:52,040
Speaker 1: stoked some resentment that we've seen, So, for example, this

129
00:08:52,120 --> 00:08:57,080
Speaker 1: resentment about China going abroad and offering aid when actually

130
00:08:57,320 --> 00:09:01,240
Speaker 1: people at home domestically are having a really tough time

131
00:09:01,760 --> 00:09:06,280
Speaker 1: under these very stringent COVID lockdowns, under the economic slowdown,

132
00:09:06,720 --> 00:09:12,760
Speaker 1: and of course the property crisis. So Rebecca, for this episode,

133
00:09:12,760 --> 00:09:15,320
Speaker 1: we're looking at how all this is playing out in

134
00:09:15,600 --> 00:09:20,000
Speaker 1: one region where China has invested heavily Latin America, and

135
00:09:20,040 --> 00:09:22,760
Speaker 1: it used to be that the US was the major

136
00:09:23,200 --> 00:09:28,360
Speaker 1: investor in the region, but China has moved in in

137
00:09:28,400 --> 00:09:31,640
Speaker 1: a big way. Well in Latin America, for example, China

138
00:09:31,880 --> 00:09:35,200
Speaker 1: in some ways has gone there to create markets, but

139
00:09:35,320 --> 00:09:39,400
Speaker 1: it's also used all of these commodities to help fuel

140
00:09:39,520 --> 00:09:43,680
Speaker 1: its industrial boom. So lots of commodities, and of course

141
00:09:43,720 --> 00:09:48,560
Speaker 1: it has invested in things like copper, in things like lithium,

142
00:09:48,679 --> 00:09:55,760
Speaker 1: and so countries like Bolivia, Ecuador, Venezuela rely on being

143
00:09:55,800 --> 00:09:59,199
Speaker 1: able to export to China that piece off in raw

144
00:09:59,240 --> 00:10:03,760
Speaker 1: materials China needs. But there's power things at work here too,

145
00:10:03,880 --> 00:10:08,320
Speaker 1: right absolutely, I mean China has rapidly increased its influence

146
00:10:08,440 --> 00:10:12,000
Speaker 1: in Latin America over the past twenty years. There is

147
00:10:12,080 --> 00:10:18,040
Speaker 1: that asymmetric tension here. For many of the Latin American countries,

148
00:10:18,160 --> 00:10:22,840
Speaker 1: China is this key strategic partner. China, on the other hand,

149
00:10:23,640 --> 00:10:27,560
Speaker 1: while it does to some extent rely on exports from

150
00:10:27,559 --> 00:10:30,959
Speaker 1: those countries, as we say, there's these these crucial commodities,

151
00:10:31,559 --> 00:10:36,080
Speaker 1: has really sought to use the diplomatic ties that that allows.

152
00:10:36,400 --> 00:10:39,080
Speaker 1: So if we think about Taiwan, for example, which we

153
00:10:39,120 --> 00:10:43,200
Speaker 1: know is really important flashpoint for China. The number of

154
00:10:43,440 --> 00:10:48,480
Speaker 1: countries in Latin America that officially recognized Taiwan over the

155
00:10:48,600 --> 00:10:52,520
Speaker 1: years has dramatically dwindled, and that's been linked to other

156
00:10:52,559 --> 00:10:56,320
Speaker 1: financial incentives. So we can see how China is quite

157
00:10:56,360 --> 00:11:01,560
Speaker 1: explicitly using these ties to advance its own diplomatic goals.

158
00:11:02,080 --> 00:11:04,720
Speaker 1: Rebecca Jiman Wilkins, thanks so much for talking to me.

159
00:11:06,160 --> 00:11:08,880
Speaker 1: After the break, we take a look at what it's

160
00:11:08,920 --> 00:11:11,720
Speaker 1: like when China comes calling with a load of cash

161
00:11:11,960 --> 00:11:26,120
Speaker 1: for your country. One South American country China has invested

162
00:11:26,120 --> 00:11:31,000
Speaker 1: a lot in is Argentina. Jonathan Gilbert covers commodities for

163
00:11:31,040 --> 00:11:34,200
Speaker 1: Bloomberg and he's been writing about this growing relationship. He

164
00:11:34,360 --> 00:11:39,880
Speaker 1: joins me from Buenos Aires. Jonathan, can you describe the

165
00:11:40,280 --> 00:11:45,319
Speaker 1: partnership between China and Argentina. Argentina had credit ward was

166
00:11:45,400 --> 00:11:47,560
Speaker 1: for a long time. It obviously had a big default

167
00:11:47,600 --> 00:11:50,559
Speaker 1: in two thousand and one two thousand and two, and

168
00:11:51,120 --> 00:11:53,920
Speaker 1: even with a market friendly government in the two thousand

169
00:11:53,960 --> 00:11:57,360
Speaker 1: and fifteen to nineteen period, it's never really recovered it's

170
00:11:57,400 --> 00:12:00,840
Speaker 1: credit respectability, but it's obviously needed to be able to

171
00:12:00,880 --> 00:12:04,400
Speaker 1: build things, and China has emerged in that time frame

172
00:12:04,960 --> 00:12:07,080
Speaker 1: as a lender of last resort and has been able

173
00:12:07,120 --> 00:12:10,520
Speaker 1: to spend billions and billions of dollars on all sorts

174
00:12:10,520 --> 00:12:15,000
Speaker 1: of things. It probably started with infrastructure with railroads and

175
00:12:15,280 --> 00:12:19,040
Speaker 1: power plants, and more recently has evolved into different things

176
00:12:19,080 --> 00:12:24,160
Speaker 1: like lithium projects and nuclear power plants. And Argentina's first

177
00:12:24,200 --> 00:12:27,679
Speaker 1: COVID vaccines were from China. Then investment from China is

178
00:12:27,720 --> 00:12:31,320
Speaker 1: now around twenty four billion dollars. What's that money being

179
00:12:31,440 --> 00:12:35,400
Speaker 1: used for. What we've seen in Argentina is a couple

180
00:12:35,440 --> 00:12:38,400
Speaker 1: of interesting deals. One going back to Patagonia at this

181
00:12:38,440 --> 00:12:41,679
Speaker 1: time in a slightly more northern region called nail Ken,

182
00:12:42,080 --> 00:12:45,440
Speaker 1: and there's a space mission center there which has drawn

183
00:12:45,480 --> 00:12:49,160
Speaker 1: a lot of eyes. And that deal was with the

184
00:12:49,320 --> 00:12:53,440
Speaker 1: nail Ken provincial government. And then where I was doing

185
00:12:53,480 --> 00:12:56,400
Speaker 1: my reporting in the north of Argentina in Quahoi, we're

186
00:12:56,440 --> 00:12:59,319
Speaker 1: seeing the Chinese government goes straight to the governor who

187
00:12:59,360 --> 00:13:04,720
Speaker 1: has present vential ambitions himself and strike deals for the

188
00:13:04,800 --> 00:13:08,640
Speaker 1: solar project, which is perhaps going to be a thousand megawats,

189
00:13:08,679 --> 00:13:11,400
Speaker 1: which is huge. And also as a sort of a

190
00:13:11,480 --> 00:13:16,000
Speaker 1: quid pro quo, China will provide security cameras for a

191
00:13:16,040 --> 00:13:19,600
Speaker 1: lot of Hahoi's government buildings. So what you're seeing is

192
00:13:20,080 --> 00:13:22,920
Speaker 1: a relationship that started at the federal level is now

193
00:13:23,120 --> 00:13:26,680
Speaker 1: trickling down to the provincial or state levels, which really

194
00:13:26,679 --> 00:13:30,720
Speaker 1: shows sort of the efficiency and the strength of Chinese

195
00:13:30,800 --> 00:13:34,400
Speaker 1: international relations in the region. You said earlier that this

196
00:13:34,559 --> 00:13:39,800
Speaker 1: started in part with Argentina's credit problems. Have these Chinese

197
00:13:39,840 --> 00:13:43,839
Speaker 1: investments helped Argentina with that? Like any of these infrastructure deals,

198
00:13:43,840 --> 00:13:45,520
Speaker 1: they take on debt that they have to end up

199
00:13:45,520 --> 00:13:48,400
Speaker 1: paying back. I think the benefit for Hahoi was it

200
00:13:48,480 --> 00:13:50,520
Speaker 1: it got a lower rate from China than it would

201
00:13:50,520 --> 00:13:54,080
Speaker 1: have done from Western companies. There's no doubt that when

202
00:13:54,120 --> 00:13:58,000
Speaker 1: you take on these Chinese projects and you take on

203
00:13:58,080 --> 00:14:00,600
Speaker 1: debt for them, then you're then saddled with, you know,

204
00:14:00,640 --> 00:14:02,680
Speaker 1: a contract that you have to fulfill. In the case

205
00:14:02,720 --> 00:14:07,000
Speaker 1: of It's interesting because that solar farm is now hooked

206
00:14:07,080 --> 00:14:08,839
Speaker 1: up to the grid, and the energy that they can

207
00:14:08,840 --> 00:14:11,480
Speaker 1: sell to the grid, they're now making tens of millions

208
00:14:11,480 --> 00:14:14,319
Speaker 1: of dollars a quarter of so you know there's an

209
00:14:14,360 --> 00:14:17,199
Speaker 1: immediate return there and immediate revenue stream to be able

210
00:14:17,240 --> 00:14:20,320
Speaker 1: to start paying back the debt. Johnathan, you spent time

211
00:14:20,400 --> 00:14:25,880
Speaker 1: in Hawaiian northern Argentina and you asked people and government

212
00:14:25,880 --> 00:14:31,920
Speaker 1: officials about Chinese investments, what did they say? I think

213
00:14:31,960 --> 00:14:35,560
Speaker 1: the excitement was definitely amongst the government officials. So I

214
00:14:36,080 --> 00:14:40,400
Speaker 1: visited several government officials. One was the Energy secretary, one

215
00:14:40,440 --> 00:14:43,840
Speaker 1: was the Production secretary. And I mean, just to give

216
00:14:43,840 --> 00:14:47,040
Speaker 1: you a flavor of the Energy Secretary's office, the first

217
00:14:47,040 --> 00:14:48,880
Speaker 1: thing I noticed when I was in there waiting for

218
00:14:48,960 --> 00:14:52,080
Speaker 1: him was that he had a small photo behind his desk.

219
00:14:52,560 --> 00:14:55,200
Speaker 1: It was a Chinese peasant with a what looked like

220
00:14:55,280 --> 00:14:59,120
Speaker 1: a field, and it had the Energy Secretary's face superimposed

221
00:14:59,600 --> 00:15:03,080
Speaker 1: onto the as Chinese peasants. So, yeah, they're in his office, Yeah,

222
00:15:03,120 --> 00:15:05,480
Speaker 1: in his office. In his office and other bits of

223
00:15:05,520 --> 00:15:09,920
Speaker 1: paraphernalia from China a winter bine, even though they are

224
00:15:09,920 --> 00:15:12,600
Speaker 1: a soul of producing province. But it said create our

225
00:15:12,680 --> 00:15:15,960
Speaker 1: future together, I think was the inscription. And when you

226
00:15:16,040 --> 00:15:19,200
Speaker 1: spoke to Mario Passaro, which is the name of the secretary,

227
00:15:19,240 --> 00:15:21,920
Speaker 1: he was just, you know, very excited to be dealing

228
00:15:21,960 --> 00:15:24,760
Speaker 1: with the Chinese and just because of what we've been

229
00:15:24,760 --> 00:15:28,280
Speaker 1: talking about that they've been able to spur these opportunities

230
00:15:28,320 --> 00:15:31,640
Speaker 1: faster than you know, Cocoy could ever have hoped for.

231
00:15:32,040 --> 00:15:34,920
Speaker 1: But then I think if you go to the sort

232
00:15:35,000 --> 00:15:38,440
Speaker 1: of the street level, I got a more nuanced view.

233
00:15:38,520 --> 00:15:42,560
Speaker 1: Let's let's say, I think people knew that China were investing,

234
00:15:43,200 --> 00:15:48,000
Speaker 1: that they looked at it very suspiciously. I remember talking

235
00:15:48,000 --> 00:15:50,480
Speaker 1: to one woman who said that her brother worked up

236
00:15:50,480 --> 00:15:53,440
Speaker 1: in the minds. I remember her telling me about her

237
00:15:53,480 --> 00:15:56,200
Speaker 1: brother being scared that, you know, to put it in

238
00:15:56,280 --> 00:15:59,240
Speaker 1: quotation marks, the Chinese were taking over, and that everything

239
00:15:59,320 --> 00:16:02,720
Speaker 1: that he could see there was was Chinese. Latin America

240
00:16:02,760 --> 00:16:05,600
Speaker 1: has a history of colonial powers coming in and taking

241
00:16:05,600 --> 00:16:08,480
Speaker 1: things away and taking away the riches and Latin America

242
00:16:08,560 --> 00:16:11,840
Speaker 1: staying poor. And I definitely feel in amongst the people

243
00:16:12,080 --> 00:16:15,280
Speaker 1: in sans Avodor that that was the fear that China

244
00:16:15,400 --> 00:16:18,320
Speaker 1: was going to come in, sell its expertise, take away

245
00:16:18,320 --> 00:16:24,640
Speaker 1: the lithium, and perhaps KAHOI wouldn't read the benefit. China

246
00:16:24,800 --> 00:16:28,640
Speaker 1: is now looking to invest eight or nine billion dollars

247
00:16:28,760 --> 00:16:33,600
Speaker 1: in a nuclear reactor in Argentina. If it happens, that

248
00:16:33,680 --> 00:16:37,400
Speaker 1: could help Argentina, of course, but also paid dividends for China.

249
00:16:37,680 --> 00:16:41,320
Speaker 1: Once again, that's an example of China expanding its influence

250
00:16:42,040 --> 00:16:46,880
Speaker 1: and also exporting its knowledge and expertise across the world.

251
00:16:47,280 --> 00:16:51,160
Speaker 1: But the interesting caveat here is that Argentina wants to

252
00:16:52,240 --> 00:16:55,880
Speaker 1: be able to have the license to develop the nuclear

253
00:16:55,920 --> 00:16:59,240
Speaker 1: fuel itself. If you look at other parts of nuclear

254
00:16:59,280 --> 00:17:03,040
Speaker 1: history and you see that countries that have acquired nuclear

255
00:17:03,080 --> 00:17:07,240
Speaker 1: reactors from say Russia, have been a prisoner to Russian fuel,

256
00:17:07,280 --> 00:17:10,640
Speaker 1: which obviously today is a big problem. So this might

257
00:17:10,720 --> 00:17:15,400
Speaker 1: allow China if it agrees to export its nuclear reactors

258
00:17:15,440 --> 00:17:19,480
Speaker 1: to countries across the world who are looking for diverse

259
00:17:19,720 --> 00:17:22,800
Speaker 1: fuel supplies, so they're not only reliant on China. So

260
00:17:22,880 --> 00:17:26,600
Speaker 1: it would allow Argentina to develop its nuclear fuel industry.

261
00:17:27,080 --> 00:17:30,639
Speaker 1: So when you look down the road, where do you

262
00:17:30,680 --> 00:17:34,840
Speaker 1: see the relationship between Argentina and China going And where

263
00:17:34,840 --> 00:17:36,960
Speaker 1: does that leave the US. I mean, if I look

264
00:17:36,960 --> 00:17:38,879
Speaker 1: at Argentina and I look at all the different areas

265
00:17:38,960 --> 00:17:42,440
Speaker 1: of cooperation, it's not just trade. Argentina cells, its soil

266
00:17:42,480 --> 00:17:45,320
Speaker 1: be insto China. Yes, it imports hundreds of different things

267
00:17:45,320 --> 00:17:48,560
Speaker 1: from China. Yes that's true, but then you've also got

268
00:17:48,840 --> 00:17:51,720
Speaker 1: the COVID vaccines, the potential to develop these pig farms,

269
00:17:51,720 --> 00:17:55,400
Speaker 1: the nuclear power plant, the train lines, the hydro electric

270
00:17:55,440 --> 00:17:59,840
Speaker 1: power plant, the lithium, deposits, the solar farms, deposits of

271
00:18:00,119 --> 00:18:04,080
Speaker 1: want into the Acentine Central Bank to help his currency position.

272
00:18:04,480 --> 00:18:08,240
Speaker 1: I think China's influence has been so overwhelming that the

273
00:18:08,359 --> 00:18:12,040
Speaker 1: US has really fallen behind. Jonathan Gilbert, thanks so much

274
00:18:12,119 --> 00:18:14,320
Speaker 1: for taking the time talk to me. No problem, it's

275
00:18:14,320 --> 00:18:17,439
Speaker 1: a pressure to do it. You heard Jonathan say just

276
00:18:17,520 --> 00:18:21,439
Speaker 1: now that the US has fallen behind, why would Washington

277
00:18:21,640 --> 00:18:25,000
Speaker 1: let that happen? We answer that question after the break.

278
00:18:34,840 --> 00:18:38,040
Speaker 1: Why has the US let China start getting an economic

279
00:18:38,080 --> 00:18:41,880
Speaker 1: and maybe a political leg up Right next door, Dan

280
00:18:41,960 --> 00:18:44,679
Speaker 1: Tan Kate is here to help us understand. He's based

281
00:18:44,680 --> 00:18:49,560
Speaker 1: in Hong Kong and overseas Bloomberg's government coverage across Asia. Dan,

282
00:18:49,640 --> 00:18:51,679
Speaker 1: can you talk a little bit about this idea that

283
00:18:51,840 --> 00:18:56,600
Speaker 1: g is trying to present an alternative to the Western

284
00:18:56,760 --> 00:19:00,400
Speaker 1: lad world order. We've seen this for a couple of years,

285
00:19:00,400 --> 00:19:04,400
Speaker 1: and it's really been more prevalent after the trade war

286
00:19:04,720 --> 00:19:08,240
Speaker 1: with Donald Trump. You know, the last Party Congress, which

287
00:19:08,280 --> 00:19:12,160
Speaker 1: is basically China's version of election, was in two thousand seventeen,

288
00:19:12,200 --> 00:19:16,840
Speaker 1: and at that event she basically said China's standing tall

289
00:19:16,920 --> 00:19:20,000
Speaker 1: in the East. And after that, the US sort of

290
00:19:20,000 --> 00:19:23,840
Speaker 1: took that as China coming out in the world and saying, wow,

291
00:19:24,040 --> 00:19:26,360
Speaker 1: you know, they're really catching up to us quickly here.

292
00:19:27,200 --> 00:19:30,040
Speaker 1: And you saw Trump with the trade war trying to

293
00:19:30,119 --> 00:19:33,040
Speaker 1: keep China down a little bit. All that's done is

294
00:19:33,160 --> 00:19:38,119
Speaker 1: kind of reaffirm China's notion that, okay, the US and

295
00:19:38,119 --> 00:19:42,480
Speaker 1: the global institutions that existed for the past forty years

296
00:19:42,480 --> 00:19:45,959
Speaker 1: and basically since World War Two that have helped, you know,

297
00:19:46,240 --> 00:19:50,000
Speaker 1: fuel the world economy don't work for China anymore in

298
00:19:50,040 --> 00:19:52,840
Speaker 1: the same ways that they do, and that the US

299
00:19:52,960 --> 00:19:56,600
Speaker 1: is kind of actively using them now to keep China down.

300
00:19:56,880 --> 00:20:00,359
Speaker 1: So we saw that last month when she shimping the

301
00:20:00,440 --> 00:20:03,560
Speaker 1: latest Party Congress and essentially set himself up to rule

302
00:20:04,280 --> 00:20:06,840
Speaker 1: China for at least the next ten years, if not

303
00:20:06,960 --> 00:20:10,600
Speaker 1: for life. And in that speech he basically made the

304
00:20:10,640 --> 00:20:13,480
Speaker 1: point that China, first of all, I wasn't backing down

305
00:20:13,520 --> 00:20:18,000
Speaker 1: on any of its core interests, and secondly, that Chinese

306
00:20:18,040 --> 00:20:22,199
Speaker 1: modernization offers a new choice for humanity. That was a

307
00:20:22,240 --> 00:20:25,880
Speaker 1: phrase he used. So what does she jumping mean by

308
00:20:26,000 --> 00:20:29,960
Speaker 1: Chinese modernization. It's the Chinese system. It's the legitimacy of

309
00:20:30,000 --> 00:20:34,000
Speaker 1: a system that doesn't depend on elections, and you know

310
00:20:34,040 --> 00:20:38,200
Speaker 1: a lot of what she jumping and Chinese officials have done,

311
00:20:38,280 --> 00:20:40,920
Speaker 1: even when they contrast with America, as they say, look,

312
00:20:41,400 --> 00:20:44,479
Speaker 1: America has its own version of democracy and that's great.

313
00:20:44,800 --> 00:20:48,399
Speaker 1: China has its own version of democracy and that's also great.

314
00:20:48,880 --> 00:20:52,240
Speaker 1: And china version is, of course, um not democracy at

315
00:20:52,280 --> 00:20:56,119
Speaker 1: all in any sense of how one would define it

316
00:20:56,359 --> 00:21:00,720
Speaker 1: in terms of elections and transparency and openness and reinformation

317
00:21:01,480 --> 00:21:05,280
Speaker 1: that sort of thing. So essentially, it provides authoritarian regimes

318
00:21:05,960 --> 00:21:09,919
Speaker 1: cover to go along their merry way in a in

319
00:21:09,920 --> 00:21:12,320
Speaker 1: a way that's you know, they don't have anyone judging

320
00:21:12,320 --> 00:21:16,560
Speaker 1: them or seeking to overthrow them, or you know, in

321
00:21:16,600 --> 00:21:20,160
Speaker 1: any way sort of sanctioning them or punishing them. She's

322
00:21:20,240 --> 00:21:24,480
Speaker 1: m paying really now on a conservative diplomatic mission to

323
00:21:24,560 --> 00:21:27,919
Speaker 1: win over kind of the third countries or the swing

324
00:21:27,960 --> 00:21:31,680
Speaker 1: states you might call them. And Laddam is a huge

325
00:21:31,720 --> 00:21:34,359
Speaker 1: part of that, um just winning over these countries that

326
00:21:34,960 --> 00:21:36,879
Speaker 1: really don't want to pick sides between the U S

327
00:21:36,920 --> 00:21:40,240
Speaker 1: and China. Has the US been kind slow to recognize

328
00:21:40,680 --> 00:21:47,240
Speaker 1: and to respond to China's advances throughout that region. Definitely,

329
00:21:47,359 --> 00:21:49,840
Speaker 1: there's really no doubt about it. And what it comes

330
00:21:49,840 --> 00:21:52,400
Speaker 1: down to is basically just um the US is sort

331
00:21:52,440 --> 00:21:55,360
Speaker 1: of handcuffed on what it could do economically. We've seen

332
00:21:55,400 --> 00:21:58,040
Speaker 1: that not just in Latin America but in Asia as well.

333
00:21:58,840 --> 00:22:02,879
Speaker 1: The cp T p P as it's now known, the

334
00:22:02,960 --> 00:22:05,680
Speaker 1: trade deal that Donald Trump pulled out of when he

335
00:22:05,800 --> 00:22:10,439
Speaker 1: took office, that actually had three Latin American countries in it,

336
00:22:10,520 --> 00:22:12,360
Speaker 1: and it was seen as something that you know, would

337
00:22:12,359 --> 00:22:16,359
Speaker 1: include kind of the Apec economies. So Chile, Mexico, and

338
00:22:16,480 --> 00:22:19,080
Speaker 1: Peru were all in that deal and still aren't in

339
00:22:19,119 --> 00:22:22,520
Speaker 1: that deal. It's still exists, just without the US, and

340
00:22:22,600 --> 00:22:25,080
Speaker 1: that was open to other deals. But that was supposed

341
00:22:25,119 --> 00:22:28,680
Speaker 1: to be kind of the vehicle that America would use

342
00:22:28,760 --> 00:22:32,640
Speaker 1: to kind of reduce the economic dependence on China and

343
00:22:33,040 --> 00:22:36,640
Speaker 1: balancings out a little bit more in the region. Now

344
00:22:36,680 --> 00:22:39,080
Speaker 1: that's gone, d US replaced it with something called the

345
00:22:39,119 --> 00:22:42,879
Speaker 1: Indo Pacific Economic Framework, and this doesn't include any Latin

346
00:22:42,920 --> 00:22:46,919
Speaker 1: American countries for instance, It just as Asian Pacific countries

347
00:22:46,960 --> 00:22:49,960
Speaker 1: and it doesn't even do that much. It doesn't reduce tariffs.

348
00:22:50,160 --> 00:22:53,479
Speaker 1: People are very unclear what the economic impact of this

349
00:22:53,800 --> 00:22:55,600
Speaker 1: is at all. So it's this kind of this window

350
00:22:55,720 --> 00:22:58,639
Speaker 1: dressing type of thing to say, hey, we're doing stuff,

351
00:22:58,640 --> 00:23:03,760
Speaker 1: but substanttly it's not that much. So why has the

352
00:23:03,840 --> 00:23:08,280
Speaker 1: US been so slow to try to reinforce these relationships,

353
00:23:08,320 --> 00:23:12,359
Speaker 1: these longstanding trading partnerships and allow China to kind of

354
00:23:12,440 --> 00:23:16,400
Speaker 1: move in with loans that are favorable with certain kind

355
00:23:16,440 --> 00:23:20,119
Speaker 1: of political strings attached when it comes to Taiwan and

356
00:23:20,200 --> 00:23:23,160
Speaker 1: other sorts of things that work against the US position.

357
00:23:23,680 --> 00:23:26,240
Speaker 1: I think in some ways it's a matter of bandwidth

358
00:23:26,240 --> 00:23:29,320
Speaker 1: for the administration's um you know, lad him often just

359
00:23:29,359 --> 00:23:31,800
Speaker 1: takes the back seat to whatever is happening in the

360
00:23:31,840 --> 00:23:34,960
Speaker 1: Middle East, or with China, or with the war in Ukraine.

361
00:23:35,480 --> 00:23:39,639
Speaker 1: That's traditionally where the eyes of the administration are and

362
00:23:40,200 --> 00:23:43,360
Speaker 1: they haven't been able to walk and chew up so

363
00:23:43,520 --> 00:23:46,800
Speaker 1: while they've been focused on those sorts of things. Afghanistan

364
00:23:46,880 --> 00:23:50,960
Speaker 1: another one. You know, China's quietly just gone about its business,

365
00:23:51,080 --> 00:23:56,080
Speaker 1: putting out cash, putting in investments, giving loans, starting projects,

366
00:23:56,160 --> 00:23:59,040
Speaker 1: having their companies go into Latin America in a way

367
00:23:59,080 --> 00:24:01,800
Speaker 1: that the US really isn't built to do because they

368
00:24:01,840 --> 00:24:05,280
Speaker 1: don't have this kind of state directed economic model that

369
00:24:05,480 --> 00:24:08,840
Speaker 1: China does. So China can just kind of go along,

370
00:24:09,000 --> 00:24:13,600
Speaker 1: secure these resources and that is primarily China's main objective

371
00:24:13,640 --> 00:24:16,480
Speaker 1: when it comes to foreign policy. They're not out there

372
00:24:16,480 --> 00:24:20,000
Speaker 1: fighting wars, are getting into those sorts of entanglements there.

373
00:24:20,400 --> 00:24:25,040
Speaker 1: Foreign policies mainly geared at securing resources for the domestic economy,

374
00:24:25,160 --> 00:24:28,359
Speaker 1: so it's a priority thing to some degree. Now it's

375
00:24:28,480 --> 00:24:31,720
Speaker 1: definitely on the radar again, but so much has happened

376
00:24:31,720 --> 00:24:34,080
Speaker 1: in the past two decades that the US is suddenly

377
00:24:34,080 --> 00:24:37,920
Speaker 1: waking up and finding itself way behind the curve here,

378
00:24:38,520 --> 00:24:40,879
Speaker 1: and they're trying to play catch up a little bit now,

379
00:24:41,119 --> 00:24:44,280
Speaker 1: but still if you look at what they're doing, it's

380
00:24:44,320 --> 00:24:47,639
Speaker 1: not that much. Biden and the G seven announced this

381
00:24:47,720 --> 00:24:51,399
Speaker 1: thing called the Partnership for Global Infrastructure and Investment p

382
00:24:51,600 --> 00:24:56,120
Speaker 1: g I I UM, a new acronym for everyone, very catchy, yes,

383
00:24:56,160 --> 00:24:59,520
Speaker 1: a very catchy new acronym. So this was rebranded from

384
00:24:59,560 --> 00:25:02,879
Speaker 1: the old back Better World UM. It was the first

385
00:25:02,880 --> 00:25:06,280
Speaker 1: iteration of this that they now, I've changed and this

386
00:25:06,359 --> 00:25:10,120
Speaker 1: is meant to counter the Belton Road and Biden, when

387
00:25:10,119 --> 00:25:12,320
Speaker 1: he was at the G twenty all all throughout his

388
00:25:12,359 --> 00:25:15,719
Speaker 1: Asia trip, has talked about this is as being, you know,

389
00:25:15,760 --> 00:25:20,560
Speaker 1: the next big thing they're using all the great buzzwords transparent, sustainable,

390
00:25:21,200 --> 00:25:25,119
Speaker 1: good government's, climate friendly private sector. You know, this is

391
00:25:25,160 --> 00:25:29,359
Speaker 1: meant to showcase what an alternative to the Chinese system

392
00:25:29,359 --> 00:25:32,200
Speaker 1: would look like. Yeah, if you look at what they're

393
00:25:32,200 --> 00:25:34,680
Speaker 1: actually doing, the most substantive thing that they've put under

394
00:25:34,680 --> 00:25:38,800
Speaker 1: this umbrella now is twenty billion dollar financing deal to

395
00:25:38,920 --> 00:25:45,000
Speaker 1: help Indonesia transfer from coal into a green economy. If

396
00:25:45,080 --> 00:25:47,480
Speaker 1: you look at all the projects they list, they really

397
00:25:47,720 --> 00:25:53,560
Speaker 1: list only two for Latin America. One is just a

398
00:25:53,800 --> 00:25:59,360
Speaker 1: thirty million dollar investment in Brazil and another one is

399
00:25:59,359 --> 00:26:02,440
Speaker 1: is fifth D two million loan guarantee for a project

400
00:26:02,440 --> 00:26:05,960
Speaker 1: that could buy US solar equipment. So, you know, it's

401
00:26:06,000 --> 00:26:07,800
Speaker 1: a lot of talk right now, it's not a lot

402
00:26:07,840 --> 00:26:10,480
Speaker 1: of action. And I think that's where the REBBE will

403
00:26:10,560 --> 00:26:12,280
Speaker 1: hit the road in the next couple of years. Can

404
00:26:12,320 --> 00:26:16,600
Speaker 1: they mobilize billion dollars which is what they've talked about.

405
00:26:17,000 --> 00:26:20,680
Speaker 1: China is actually opening up the checkbook and giving these

406
00:26:20,720 --> 00:26:24,199
Speaker 1: governments money. So even if they don't necessarily want to

407
00:26:24,240 --> 00:26:26,840
Speaker 1: take Chinese money, and there is a backlash to some

408
00:26:26,920 --> 00:26:29,560
Speaker 1: Chinese money in the region, and there will be everywhere

409
00:26:29,560 --> 00:26:32,400
Speaker 1: in the world that this happens for these governments it's

410
00:26:32,440 --> 00:26:35,879
Speaker 1: often a choice of Okay, I'm gonna take several billion

411
00:26:35,920 --> 00:26:38,560
Speaker 1: dollars or I'm going to have nothing. And you know,

412
00:26:38,600 --> 00:26:40,080
Speaker 1: what are you going to do? If you're trying to

413
00:26:40,160 --> 00:26:44,199
Speaker 1: show your population that you're delivering for them, You're going

414
00:26:44,240 --> 00:26:46,359
Speaker 1: to take the money and you're gonna use it to

415
00:26:46,400 --> 00:26:49,919
Speaker 1: win political support at home. D'antan Kate, thanks so much

416
00:26:49,960 --> 00:26:52,480
Speaker 1: for coming on the show. Great to be here. You

417
00:26:52,520 --> 00:26:55,959
Speaker 1: can read more by Danton Kate, Rebecca Chewing Wilkins, and

418
00:26:56,080 --> 00:27:00,439
Speaker 1: Jonathan Gilbert on Bloomberg dot com. Thanks for listening to

419
00:27:00,520 --> 00:27:03,400
Speaker 1: us here at The Big Take, the daily podcast from

420
00:27:03,400 --> 00:27:07,000
Speaker 1: Bloomberg and I Heart Radio. For more shows from my

421
00:27:07,160 --> 00:27:11,240
Speaker 1: Heart Radio, visit the I Heart Radio app, a podcast,

422
00:27:11,400 --> 00:27:15,240
Speaker 1: or wherever you listen. Read today's story and subscribe to

423
00:27:15,280 --> 00:27:19,359
Speaker 1: our daily newsletter at Bloomberg dot com slash Big Take,

424
00:27:19,920 --> 00:27:22,719
Speaker 1: and we'd love to hear from you. Email us with

425
00:27:22,880 --> 00:27:26,840
Speaker 1: questions or comments to Big Take at Bloomberg dot net.

426
00:27:28,119 --> 00:27:31,119
Speaker 1: The supervising producer of The Big Take is Vicky Burgalina.

427
00:27:31,640 --> 00:27:35,920
Speaker 1: Our senior producer is Katherine Fink. Our producer is Rebecca Chasson.

428
00:27:36,440 --> 00:27:39,920
Speaker 1: Our associate producer is sam Goa Bauer Hill the Garcia

429
00:27:40,080 --> 00:27:45,120
Speaker 1: is our engineer. Original music by Leo Sidrin. I'm West Kasova.

430
00:27:45,400 --> 00:27:47,920
Speaker 1: We'll be back tomorrow with another big take.