Latin America’s relations with China: Vaccine diplomacy and beyond

Margaret Myers

Good afternoon, or morning, or evening, depending upon where you are based, and thank you so much for joining us today. My name is Margaret Myers. I direct the Asia and Latin America Programme in an organisation called the Inter-American Dialogue, and it is a tremendous pleasure to moderate today’s Chatham House event, Latin America’s Relations with China – Vaccine Diplomacy and Beyond. We are very fortunate to have three absolutely top-notch experts on the topic with us today to consider developments in China’s engagement with Latin America over the past year certainly, through vaccine and so-called mask diplomacy and even some investment. But also to consider some of the many wide-ranging factors that maybe will shape China/Latin America relations in the months and years to come. Trends in finance and investment, for example, or the effects of China’s extensive COVID-19 outreach, new areas of focus in the 14th Five-Year Plan, or shifts in the political and economic landscapes of certain Latin American nations.

Our panellists have countless professional accolades, so in the interests of time, allow me to just share some of the highlights. Dr Alvaro Mendez is the Co-Director of the Global South Unit at the London School of Economics and Political Science, and a Senior Associate Fellow at LSE IDS. He is also an Associate Fellow at the Geneva Centre for Security Policy and an Adjunct Professor at Fudan University. He additionally teaches international relations at the LSE Sciences Po, and Peking University, and has published five books, including some on China/Latin America relations, along with numerous journal articles on the topic.

Dr Christopher Sabatini is Senior Fellow for Latin America at Chatham House, and was formerly a Lecturer in Discipline in the School of International and Public Affairs, SIPA, in Colombia University. Chris is also on the advisory boards of Harvard University’s LASPAU, the Advisory Committee for Human Rights Watch’s Americas Division and the Inter-American Foundation. Chris additionally founded and directed a research non-profit, Global Americans, which is alive and well, despite his move to London, and was Senior Director of Policy at America Society and Council of the Americas and Founder and Editor-in-Chief of the hemispheric policy magazine, Americas Quarterly.

Dr Cynthia Sanborn is currently Professor of Political Science and Researcher at the Centre for China and Asia Pacific Studies at the Universidad del Pacifico in Lima. She holds a PhD and Masters in Government from Harvard University and a Bachelors in Political Science from the University of Chicago. She’s also served as Vice President for Research and Chair of the Social Science Department at her university and is currently a member of the National Education Council of Peru. Cynthia has written and edited numerous books and articles, including on Latin America’s relations with China. And this year she will be a Residential Fellow at the Latin American Programme at the Woodrow Wilson International Center for Scholars.

Before I turn the floor to our esteemed panellists, I should note that today’s event will be held on the record, and that we will reserve plenty of time for audience questions at the end of the session, so please do feel free throughout the meeting to use the ‘Q&A’ feature at the bottom of your screen to submit questions and, again, you can do so throughout the event. And with that said, let me turn the floor, please, starting out with – to Alvaro.

Dr Alvaro Mendez

Thank you. Thank you very much. Can you hear me? Yeah, I believe you can. Thank you so much, Margaret, it is a pleasure to be here at Chatham House with you, with Chris and Cynthia, and the audience, I feel honoured to have this invitation and this opportunity.

So, to start my participation, which is going to be around seven minutes, I want to – and this doesn’t affect my personal views and my academic views on China, I want to start with a personal note. I am very grateful to China for the vaccine. They provided the vaccine to Latin America at a very early stage, and I’m grateful because my dad received the Sinovac vaccine really early, and I was really worried about him. My brother and sister-in-law also got their vaccine, and the ConSino vaccine in Mexico, and then, of course, how can I not be grateful? And I think this gratefulness is shared by civil society in some countries, and I think this has had a positive impact for China and for the reception of China in the region.

At the same time, this is in the context of the US and the EU being totally neglecting the region, at least at the beginning, and of course, this was disappointing. Governments like Colombia, where I come from, I’m Colombian, didn’t prepare early enough to get vaccines and that was obviously an issue. I think Colombians, from what I get from policymakers that I’ve spoken, were hoping for Washington to deliver. Colombians always see Washington – they think they’re Washington’s favourite, and of course, they had to face the hard reality that the US wasn’t going to be there, at least at the beginning. China came in to help. We even got a personal video message from President Xi Jinping the day that vaccines arrived. I was – that was quite nice for Colombia, and of course, good for Chinese foreign policy perception.

Now, I’m a Foreign Policy Analyst. As a Foreign Policy Analyst, I focus on three dependent variables when I do my analysis. I focus on intentions, statements and actions, so, of states, directed to other states, of course and in general, this is not a very straightforward process but one that one can do. And I do it often for the US, the UK and countries in Latin America. I also do it for China, and when I tried to do – to use this framework, doing it for China is quite challenging. I can see their statements and actions, but it’s very difficult to see their intentions, and things are way more complicated than that. Partly because I feel that I’m looking at a black box to analyse, and this is also quite difficult. We can see the statements, the vaccines, the actions, but their intentions are difficult to measure. I’ve been lucky, to an extent, to be able to get some, a little bit more insight into their intentions by talking to policymakers and academics in China, due to my affiliations to Pudan and PKU. But understanding the process from inside is still very difficult, and I still believe that most Analysts would share that with me, that understanding China’s foreign policy is a challenge.

Now, in terms of Chinese foreign policy in Latin America, the topic has become super fashionable. I think everyone is now talking about it, it’s very popular, and we see reports on, almost on a daily basis. And I think, particularly because of COVID-19, so maybe people have too much time on their hands, but that has been a case that we have seen massively. For those of us who have been analysing Chinese foreign policy for years, the statements and actions of China are not definitely new. And I think they go back to the 1950s, but don’t worry, I’m not going to take you there back in time.

First, I think China sees Latin America as a very important strategic region, and I think they see it as a region where they can gain market share and also, to win hearts and minds from the people. It is not that difficult, they only have to be marginally better than the US, which is not hard, as you know. And secondly, China doesn’t have that much of a dirty laundry in the region, and that obviously helps a lot. The strategic importance of Latin America for Beijing has grown massively, but I would focus perhaps, since 2001, which is the year where China accesses the WTO, and of course, we saw a number of things happening after that. Three FTAs with the region, Peru, Chile, Costa Rica, and a fourth one was going to be signed recently with Panama, but things didn’t work out.

President Xi Jinping has played a very important role here. He has been in the region so many times. I keep track of that, I’m quite nerdy on that. But he has visited the region five times since 2013. 2013, 2014, 2016, 2018 and 2019. In fact, he has visited the region so many times that combining the visits of Obama, Trump and Biden, of course, Biden just got into office, Xi Jinping has visited more countries than these three guys, imagine that. So that’s pretty impressive. Three countries have switched diplomatic allegiances from Taiwan to Beijing, and of course, you know about that, Panama, the Dominican Republic and El Salvador. Today, 24 countries have diplomatic ties with China, and nine still have diplomatic ties with Taiwan. 19 of these 24 countries have endorsed the BRI.

Now, having said that, I think the majority of Latin American countries do not necessarily understand what the BRI means, partly because the BRI is not a very clear project, and I think sometimes that clarity is not there in China also. Four countries in the region have also completed full membership of the AIIB, which is the Asian Infrastructure Investment Bank, and this is a geopolitical element, because the US has refused, from the very beginning, to be a member, to have anything to do with this, what they call the Chinese World Bank, which is based in Beijing.

I could go on and on, and we’re here, of course, we’re here to talk about vaccine diplomacy, and we will be having some really interesting discussions. In this particular element, I think it is very important that we can analyse vaccine diplomacy in the region, taking into account what has happened in the broader spectrum as well. And I think this is important, when we look at Latin America, that we see Chinese vaccine diplomacy also in other parts of the Global South, and for that reason, I’m going to quickly share these, to finish my participation today.

And we can see here that roughly 277 million vaccines have been delivered so far. Latin America comes second, definitely very important, but of course Asia Pacific is the important element. Africa is not – is the one with less. Here this graph shows vaccines that have been sold to the region, and I think the number is very high for Latin America, because most policymakers didn’t prepare early enough for that, and of course, that’s an important element as well. And to finish, their donations by China are not necessarily important in Latin America. Africa has the bulk – for Asia Pacific has the bulk and Africa is second.

In terms of Latin America, you can see here, and just to finish on this note, important developments. I see aid or purchases by Paraguay, which doesn’t have diplomatic ties with China, and also by Belize, here I believe, in this very small dot, which is also interesting, because it doesn’t have diplomatic ties with Beijing, they have diplomatic ties with Taiwan. So in general, my conclusion would be, in order to understand China’s vaccine diplomacy in Latin America, we have to look at the broader spectrum of that policy in Africa and in the Asian region. So thank you so much, I look forward to receiving your questions. Time is up, I believe.

Margaret Myers

Thank you so much, Alvaro, for sticking to the time and also for the fascinating points. Let’s turn now to Chris.

Dr Christopher Sabatini

Thank you, Margaret. I want to thank Chatham House for inviting me to speak here, and all the audience, and the panellists.

So the – I want to talk about three things. The first is, the regional divisions in which COVID arrived. And the second is, again, how China’s played into this and the third is, how this has affected domestic politics and the long-term effects. We think back to the 1990s, the late 1990s and early 2000s, it was an era of regional solidarity and regional organisations. You had UNASUR, you had ALBA, you had SALOC, you had a whole number of proliferation of organisations that were intended to promote, if you will, Latin America’s insertion into the global system as a bloc, and doing so increased their bargaining power. We can contest whether Brazil is really all that interested in consolidating that relationship or really going it alone. But the truth is, as UNASUR, despite a number of problems, in terms of not always resolving regional issues, of weaking human rights standards, of creating an excessively expensive building in Ecuador, that is now defunct, but I think it’s available for rental for bar mitzvahs and weddings. One of the things it did do during that time is it did help negotiate better pharmaceutical prices from other countries by negotiating as a bloc.

UNASUR has since collapsed, SALOC is limping along. That solidarity became a victim of, first of all, the excessive prioritisation of regional organisations, and then later a series of elections that produced a more divergent hemisphere politically speaking. But what we see now is that regional solidarity, and its collapse, it’s left a real effect on the ability of the hemisphere to be able to negotiate en masse with pharmaceutical companies, to be able to buy, or with countries, who will buy medicines and vaccines or even equipment in a fashion that would make it affordable, make it deliverable, and actually opened up the possibility that every country then go it alone.

We saw some real success stories of countries securing vaccines quickly, Chile being one of them. And – but that was largely as a result of its trade ties, a result of Chile’s rather agnosticism when it comes to who it does trade with, which is a good thing. It was able to secure Chinese ties, despite the fact that it’s a market economy. It was committed to getting, as they would say in England, jabs in arms, as soon as possible, by whatever means possible. Whereas other cases, we saw other countries left behind. We saw efforts to export the AstraZeneca vaccine from Mexico held up because of US export restrictions on some of the inputs. We saw other countries fall behind.

And this, sort of, every country for itself really created quite a dilemma, that would have been resolved if there’d been a greater effort at regional solidarity. Same token, we also saw a couple of companies, US companies in this case, Pfizer, try to take advantage of their bargaining position, according to a Reuters study, a report – basically the Pfizer executives tried to get Argentina and Brazil to commit government resources as collateral to pay for Pfizer vaccines. This left a huge breach, into which China has effectively operated, as well as a lack of US leadership.

On the lack of leadership in particular, of course, it was the excessive politicisation of US relations in the hemisphere by the Trump administration, its excessive focus on the so-called Troika of Tyranny or the Three Stooges of Socialism, I think John Bolton also called them. Basically, it meant that the US was not in a position to really lead as a collective broker in any, sort of, response within COVID. But in addition, of course, the US was consumed by its own problems and addressing its own pandemic issues, as well as the need to respond to local and domestic issues toward vaccines.

Into this breach, as I mentioned, China has come and as of May, for example, China has delivered 143.5 million doses to ten of the most populous countries in Latin America. Of those doses, those are all Chinese doses, of those, 75.8 million were Sinovac. In contrast, if you combine AstraZeneca and Pfizer vaccines, they only donated – only sold, rather – and it wasn’t donations, it was sold, by the way – were 59 million. So basically, you know, more than twice the number of China, actually, almost three times the number of Chinese vaccines are now in the arms of Latin Americans, which needed them, than AstraZeneca and Pfizer. Just by way of comparison, Russia, which is also oftentimes lumped in together, which has been slower in response, has only, by May, had only sold or donated 8.7 million of the vaccines. So Russia was far behind.

At the same time, also, China, before the vaccines were developed, was very quick in responding, in donating equipment, both testing kits and personal PPEs and ventilators and oxygen. That was extremely important. And through all of this, whether it was sold or donated, and a lot of the vaccines obviously are sold, they’ve been very good at marketing this as a Chinese product. And it’s not uncommon to see these marketed with Chinese flags, to see them being unloaded on television on the tarmacs of airports as they arrive, they’ve really made the most of this, in terms of their soft diplomacy. By the same token, they’ve also squeezed other governments. Alvaro mentioned this, but of course, Honduras and Paraguay, which recognised Taiwan, have been slow to receive access to Chinese vaccines, and in fact, Paraguay made a plea to the United States to help them, since they were trying to toe the line on US policy, and weren’t receiving any love from the White House for doing so.

But this has not come without a cost. I mean, first of all, we see, in Chile and other, in Uruguay – Chile, for example, as of just a week ago, I believe, had received 60 million doses from China. Uruguay had also received about half of its doses from China. But, in both cases, infection rates are soaring. That may not be a reflection of the efficacy rates of Chinese vaccines, but it certainly gives that impression, that these may be less effective, so that the response has been, sort of, mitigated, if you will, or lessened by infection rates.

Similarly, you had a few corruption scandals. In Cynthia’s adopted country of Peru, of course, Martín Vizcarra got himself in a little bit of hot water for jumping the line for Chinese – for testing a Chinese vaccine. And so it, sort of, perpetuates a little bit of this sense that China is not always going to score the biggest soft diplomacy hits with its efforts.

All this is to say the US has also been a step behind. The leadership that Alvaro mentioned has been lacking. At the same time, when the US has donated vaccines, it’s done it through COVAX. It’s done it through institutional mechanisms, which is the way it operates. Just quickly a story, and this is not to drop a name, although I’m not above that. One time, when I met with Evo Morales, he was telling – it was his first trip to the United States, we had a small meeting, he was telling us that the Cubans operated on cataracts. And I told him, “Well, the United States has been donating medical equipment and development assistance for decades.” And he said, “Yes, but the Cubans are there donating Surgeons to operate on cataracts.” And there is a real power of branding, in that sense, that the US doesn’t engage in, for better or worse, but when it donates to COVAX, it simply doesn’t have that flag-flying impact that China has been engaging in.

Now, does this mean that China is on the move and is up to sinister intentions in the region? I mean, I think we’ll need to see. I don’t think this is a complete assured win for the Chinese Government. There – it’s scored some important points, but as Margaret’s written about as well, China’s investment has levelled off. It’s BRI, its Bridge and Road Initiative has not always produced the, sort of, impact and funds that have been promised. And so it remains to be seen, you know, what China will gain in this in the long-term.

I would argue, and I will conclude with this, the one area where I think China may step up is – and this is the real – more important even than the vaccine response, has been what we’ll do in addressing a Latin America’s economic crisis coming out of COVID. The region contracted, it’s the hardest hit region, economically, in the world. It contracted, according to ECLAC, a 7.7% in 2020. There are some questions about public debt, fiscal overhang from the stimulus packages that came out. Will China try – step up its investment, both in buying bonds and in lending, in ways that, sort of, provide some safety line that the US is not prepared to do because it’s engaged in other forms of diplomacy and not looking necessarily South. I’ll leave it there. I think the US lack of leadership has been notable, and I think at this case, the question is what it’s going to do post-COVID even more than on the vaccines? Thank you.

Margaret Myers

Thank you so much, Chris. I think you’ve addressed one question that is top of mind for many, which is – well, at least here in Washington, where I’m sitting, which is, you know, how China will emerge from – or views of China, rather, will be affected by Chinese extensive engagement over this past year and then a less extensive engagement, at least in a very, you know, public sense from the US, although dollar values in comparison are slightly higher. But again, are being distributed through different channels and then what happens now during this recovery period and who will more engage extensively in it in what, sort of, constructive ways. So thank you so much for that.

Before we turn to Cynthia, let me encourage everyone, please, if you do have questions, go ahead and put them in the ‘Q&A’ at the bottom of your screen, and we will address those during the question and answer period. And I’ll turn the floor now to Cynthia. Thank you so much.

Dr Cynthia Sanborn

Okay, thank you very much, and thank you Alvaro and Chris. I can’t agree more with some of the things they’ve said about the role of China in this period. And I, too, have been affected personally and professionally by the fact that China was here right away. Chinese medical products were the first to reach us when the pandemic hit, and when, as has been said, some of our governments, particularly where I live in Peru, were not prepared for responding to this. And it’s not that – it’s not that we could have expected it, but the collapse of public health systems, the inability to negotiate and purchase and get supplies here quickly really took a huge hit on us in Peru as well as neighbouring countries.

But this is not new, you know, we had, Peru – countries like Peru and Chile have had ongoing political and commercial relations with China for decades, you know, and so the relationship was already in place when we had to turn to them to buy. And as has been said here, there’s been some donations, but most of it has been purchases. And when the vaccines became available for purchase, some of us also participated in clinical trials for the Sinovac or Sinopharm vaccine. But when they became available for purchase, the Chinese were also the first to come through, while other countries were focusing on their own populations first, let’s say. And now, although I think most of us are now purchasing vaccines from other suppliers as well, Pfizer, Moderna, etc., the Chinese ones were the first to arrive to help people on the frontlines. And I think that’s very important, in terms of what Chris said, in terms of branding, the Chinese vaccines arrived when our medical personnel, Doctors, Nurses, Firefighters, Police and Soldiers needed them, and they were the ones who received those frontline vaccines, and that is very well-regarded. And all told, we still have far fewer vaccines than we need to rollout to our populations. You know, with some exceptions like Chile, but most of us – Peru has had only 9% of the population fully vaccinated, about 16% just one shot. So there’s a long way to go, and to the extent that the Chinese pharmaceutical firms are selling more to the rest of the world, including Latin America, we’re pretty grateful.

It’s not clear to me, however, how much this greater access to Chinese vaccines really sways public opinion about China in the region, especially in countries like ours, where Chinese investment has already been a major part of our economy and the Chinese market it is, you know, perhaps our main market for our major commodities exports. Oliver Stuenkel in Foreign Policy recently argued that this is a major diplomatic triumph for China as a supplier of vaccines to Latin America. But recent surveys by Francisco Urdinez in Chile and some other evidence, would suggest that while China may be doing positively in economic terms, it’s not necessarily changed the way Latin Americans see China politically. And he actually cites pretty negative connotations when you ask people what they think about China, they associate it with some of the downside of this virus and the pandemic.

Also, with not a high level of approval of China’s political system or its politics in general. So he would argue that reputational damage in the pandemic is high for China in Latin America. It may not have swayed the region to, sort of, turn its back, in terms of the United States. We don’t really have enough data to make generalisations about that, but I’m not sure that this is the key turning point, and I think I would move to what – something that Chris and Margaret’s work and others have mentioned, which is that the more – the economic relations of the extent to which China is going to be or is fundamental to recovery of these economies that have been so hard hit by the pandemic, by the decline in public investment, by the crisis in employment, etc.

Now, if you look at the countries like Peru, Chile, those of us that are big commodities exporters, the increases in prices look pretty good for what we sell to the world, and the – this has been offered – this offers much needed relief for many of our economies that have been so hard hit. So, from soy to beef to copper to iron, prices have risen in recent months, and China’s a main driver of this, to the extent that Chinese demand is once again increasing, and it’s buying more from us again. This is a pretty positive sign for the region. The demand for copper in particular, for our country and for Chile, has been an encouraging sign.

I would add to that, however, something Margaret mentioned as well, the politics in this region have been pretty tumultuous, in recent years. And while the external projections are favourable for our economies, for our recovery, internal political and social turmoil is very high. And I think a question I would have, is to what extent the Chinese are willing or able to deal with some of the changes that are coming down the line? We have enormous demands from low income rural populations hit the hardest by COVID, having the hardest time, in terms of health and social situation, including those most directly affected by these major mineral and energy investments that the Chinese are involved in.

Politicians of all stripes are, again, promising to increase taxes on the most lucrative foreign investments, especially mining, and to redistribute these revenues. This puts all investors on the alert, but being relative newcomers in the region, in terms of negotiating the politics of investment, it remains to be seen if the Chinese will continue to adapt to potentially significant changes. I mean, Peru has just probably elected a fairly radical socialist President. Chile is going through constitutional changes. There’s tumult in Colombia, as we have seen.

Now, in our case, in Peru, there our potentially new President has said nothing about Peru’s intensive long-term relationship with China, nor has the platform of the party he ran with, they’ve been silent. But they do announce major changes for the mining sector, ultimately threatening nationalisation, if foreign investors don’t come around and pay more in taxes and allow more state involvement. And they’re also very strong critics of all of Peru’s free trade agreements, and presumably including those with China. So I think it’ll be a challenge for China to engage with changing politics in the region and to, kind of, maintain this idea that the relationship is mainly economic and not political. I mean, for Latin America, we’re feeling more pressure from the United States to make this a political decision or a political issue rather than just an economic and trade one, but I think the Chinese will also face pressures, and political pressures in our countries, in terms of the role of their investments and how they adapt.

I guess I’d like to just add that I think, as Margaret and others have pointed out, new investments from China in the region may be – may have declined or diminished in this last year, but important investments in key sectors, such as energy, electric and alternative energy, transportation and digital infrastructure, I think remain very important to South America in the years ahead. And as we both recover from the pandemic, adapt our educational systems, adapt our ways of working, respond to this, kind of, shutdown of i- person activity with a more – a stronger need for digital connectivity, and China again, is there offering certain kinds of investment that the region needs.

As several Analysts have pointed out, the Chinese are participating more in public bids and tenders for projects in countries – in Chile, Peru and Colombia. The Chinese are not expecting preferential treatment in investments. They’re bidding, with assistance of other partners, with law firms that are working with them, and we’ve seen some pretty interesting advances, both in physical infrastructure and in digital infrastructure, which certainly have raised the concerns from the United States. But is, as both of the people who preceded me said, it’s not clear how much the US is going to respond to that, since it’s not US Government responsibility to determine investment priorities in the region.

There are two areas that I think are really important. One is lithium, and you know, sort of, alternative rare minerals in general, as the world – as the developed world will advance more towards a greener economy, China has also taken a lead in the search for rare minerals and basic minerals like lithium, which is needed, and Latin America is a prime location for that, not the only one. We see Australia, Germany and others as well having sources, but Latin America has huge reserves. And I – it’s something Chris said, I think is very important, in terms of South American solidarity, our ability to negotiate.

A very dear friend, who recently passed away, Rafael Roncaagliolo, former Foreign Minister of Peru, was out in the forefront in recent years, urging Latin America, for example, to unite around its lithium resources, to band together and try and negotiate, both better deals from international investors and protecting our natural environment from this activity. And of course, that has really fallen apart. It seems that we’ve lost any opportunity, as each country negotiates bilaterally with investors, with China and others, in terms of this resource.

They’re in energy and power as well. Chinese firms have made important investments in Latin America. Huge investments in electrical energy generation, transmission and distribution in Chile and Peru, in Brazil. Significant investments in hydroelectric power. In some cases, like Peru, replacing Brazilian investments with the Chinese investments. And electricity and energy in general is also key to our recovery and to our ability to bring our economies and our labour force back online and try and recover some of the tremendous setbacks we’ve had. And again, Chinese investors have been there. I would stress the importance of their playing by the rules that Latin American countries, particularly in South America, have worked to obtain, environmental and social standards, labour standards, protection of indigenous populations. These are things that, in South America, most countries have advanced on, and itis important that the Chinese, as all other investors, are playing by these rules.

I would conclude to just say that I think putting the needs and interests of Latin America first in this discussion, as my colleagues here do, is important to avoid being filtered or caught up in the US/China tensions, is fundamental for this region, avoiding pressures from both sides and really trying to retain these good relations that many of countries have had with all great powers, with the US, with China, and with the European Union. South American countries that retain positive relations with all great powers should continue to do so, and not be pressured to take sides. I think it’s unfortunate when the US criticises China for being there with the vaccines and medical supplies, rather than, as Alvaro and Chris have said, you know, roll them out too. You know, we’re purchasing, we’re not expecting – in South America, we’re not expecting handouts, so much as being able to purchase and get them here quickly.

And again, I think it would be great, I think it would be really important, if Latin America could pursue more regional co-operation in our relations with China, in the way we engage with China. But that seems remote. It really does not seem so politically reliable or realistic, in the current context and with the political changes we’re seeing. However, and I’ll make a plug here before I finish, I think we can pursue more co-operation in the short run in this, kind of, sphere. In academia and in think tanks, in sharing knowledge and in sharing research and sharing training about China and China in the South, among the different countries that have to engage with China. And therefore, I think this, kind of, activity, as well as what some of our research centres and universities are trying to do, is fundamental. It’s fundamental that we share information and train another generation of people who have to deal with China. And I would stop there.

Margaret Myers

Fantastic, Cynthia, thank you so much. Those are all excellent and very thought-provoking points, and they hopefully will generate wide-ranging questions in the Q&A. We already have a few. But before I turn to those, let me ask, just maybe two questions, and you can feel free – all three of you can feel free to respond to either or both.

First of all, you know, I wonder if you sense that, you know, China’s experience with COVID-19 diplomacy, whether in the, sort of, first phase, through mask diplomacy, and now through vaccine diplomacy, will result in lessons learned as a result of, you know, of this, in many ways, sort of, exploratory exercise, right, will result in any real changes in the way that China conducts itself in the region? And certainly, you know, we saw this focus early on, on so-called wolf warrior diplomacy, the, sort of, sharp-edged messaging, right, in media, on social media, in particular through Twitter, and then that has been since, sort of, tamed down, withdrawn. It’s no longer a focus of Chinese embassies and so, perhaps in any other ways too, so, you know, distribution of resources, you know, utilising certain networks. Is there anything that you’ve seen that you think may be a carryover in a, sort of, post-COVID-19 era, suggesting something of an adaptive approach or a change in public diplomacy overall, looking ahead?

And then, I can’t help but ask, you know, given a couple of your – where you’re located, a couple of you at least, you know, we saw the G7 meeting recently and, you know, an announcement of what many termed an unprecedented united front, right, in grappling with China’s growing role, right, and globally, not just in Latin America and the Caribbean. And a response to what some G7 countries have called a, sort of, high cost Chinese economic engagement, right, especially in the medium and long-term, in addition to the announcement of a, sort of, grand infrastructure plan, calls for revisiting the, you know, research on the origin of the virus. Things of this nature, right, really a very clear position. What do you think about, you know, any implications of this, sort of, positioning, be it more symbolic or more concrete? We’ll see, right, for the Latin American and Caribbean region.

And let’s go ahead and go in the same order, and I’ll turn to Alvaro first.

Dr Alvaro Mendez

Going back to – I mean, there are lots of questions, but just to briefly – your first one in public diplomacy, what’s going to happen after COVID? We don’t know, but I believe that just before COVID-19, Chinese Diplomats were becoming more assertive in the region. And I think they will continue to do so, and you can see, by using their model to analyse the actions of Ambassadors in the region, they are super assertive. They tweet very often, they are not afraid to go to talk to the policymakers. But also, changes have happened in Latin American countries. Now they’re paying more attention to China. So they are now not just meeting with people in the lower ranks of the Ministry of Foreign Affairs, but they have access to the Ministers, and sometimes to the President, which has been the case of Colombia. And I suspect Colombia was particularly important for that public diplomacy, because as some have pointed out, it’s not a very – it’s not a country that has been very close to China, has been close to the US instead. So that was very symbolic, I think, for China to do so, and also, for Colombia to have to pay more attention to the Pacific region, which, in the case of Chile and Peru, they don’t really have any option, but Colombia, it’s always thinking in terms of the Atlantic, the Atlantic view of that.

So I would suspect there would be more assertiveness by Chinese Diplomats, also by people in general, you know. I have tons of students preparing to go to Latin America, with almost perfect Spanish. They see opportunities in the region. So I think that is going to change. And obviously, I think that would have to be analysed on a country-by-country basis. I think it’s very difficult, if not impossible, to talk about Latin America as a whole. We are not united, by any means, in any area. I mean, we think we are united, but in foreign policy we are not, and we’re talking about 33 countries with different interests, different policies, different ambitions. So that will be very difficult. Certainly the US, you know, I think they are concerned, but they don’t really care that much. I mean, you have people coming to Panama, to Pompeo, telling them that they shouldn’t be dealing with the Dominican Republic and they shouldn’t be messing with China, and they should be paying more attention to Taiwan and all of that, but, you know, I think it’s symbolic.

Now, I think the influence comes from a larger picture. For example, not to mention names, like Chris said, President Varela told me he was dreaming to have an FTA with China. It was his ambition to have that. He was savouring the FTA, every time I saw him. That was not the case. It was not signed, not because China didn’t want to, not because Panama didn’t want to, because of the tensions between China and the US, and that was basically in the middle of it. In fact, Xi Jinping was going to be in Panama to sign that FTA, but it was in the middle of these tensions, the Chinese backed off, and they couldn’t complete it, and I think these tensions have an impact.

And to your second point about the G7, I think they were statements, to be frank with you. The Europeans talk about being hard with China, blah, blah, blah. Excuse me, but I think it’s blah, blah, blah. At the end of the day, countries in the European Union are not united, as we all know, and they need China bigtime. So I see these as temporary statements. Also, from the US, to a certain extent, and I just recently wrote a piece about supply chains and how to depend less on China. But the reality is that this is not happening, and the case of that is Apple. Apple has opened more centres for assembly in China than before the crisis. So I think this, in many ways, is their rhetoric, and I don’t think that will become a reality in the future.

Margaret Myers

Thank you so much. Chris.

Dr Christopher Sabatini

Oh, good questions, Margaret. So I think, you know, first of all, whenever I talk about China and Latin America, I do experience a little bit of nervousness. I don’t want to, you know, sound like something out of the 1980s, like someone from the John Birch Society in imagining a commie behind every tree. So, you know, when I say this, there’s a reason not to be alarmist. And in this case, I think, what have they learned? What do they gain, in terms of their diplomatic engagement? I think there’s several things.

One is the positive. You know, I think Latin America recognised, despite the efforts by Tillerson and Pompeo and others to, sort of, paint this as a binary choice, that you can have a pragmatic relation. They reinforced it, they already knew this. But it reinforced this idea that you can have a pragmatic, effective relationship with China, and that there are real benefits of co-operation. In this case, it was being able to buy vaccines in a very rapid manner, being able to respond. And I think that’s – you know, that is grist for their overall public policy. That’s not to be alarmist about it, it’s simply the fact that it demonstrates that you can have a mature relationship with China, despite efforts by some, particularly in the United States, to paint it otherwise. And I think that, you know, to be honest, efforts earlier to criticise China’s engaging on the vaccine and in donations of PPE, just sounded – on the part of the events, just sounded churlish. I think it just – it didn’t sound right.

And so, I think the Chinese will make a lot of use of that. I think it will also mean, to your point, Margaret, about the sharper elements of this diplomacy and the criticism, I don’t think they’ll need to engage in that as more, as much. And I think, to Alvaro’s point too, it has meant now that governments are now co-operating with the Chinese embassies in the region in a far more multi-layered level than they did before. And it’s not just trade delegations and investments by state-owned or semi-state-owned companies from China. So I think that’s important, and again, I think it highlights the fact that this is a world player, that Latin American countries need to develop their own capacity to deal with, and the benefits are real. And if they – and quite frankly, if they cling to Taiwan, the US unfortunately may not be there to bail them out, despite its rhetoric to the contrary.

On the G7 meeting, I saw that more as a – the statements about China and the, sort of, basically matching the Bridge and Road – Belt and Road Initiative, is more, sort of, for public consumption more than anything else. It isn’t clear how they’ll match that. These are private investors. The US – you know, I can’t imagine the US pumping or the European Union pumping more money into infrastructure firms to be able to bid. ‘Cause that’s what would have to happen, unless we’re willing to engage in some, sort of, commercial attaché with the diplomatic muscle to make sure that they get in on these tenders that Cynthia mentioned, that China is bidding on. And I just don’t know where that funding is going to come from.

I mean, I think there could be a way of more imaginatively creating the international financial system and development structure to be able to respond to this, but I don’t think it’s going to happen at a G7 meeting in an island in Cornwall. So, I think that was – and I think the public consumption was also to demonstrate that the US and Europe, despite the questions over 5G, for example, and other matters, is going to stand shoulder-to-shoulder. So part of it was more about the US and the EU, or Biden re-engaging the EU and the UK, which by the way is no longer a member of the EU, as we know. The – to engage in them and demonstrate, “Oh, we stand together on the Chinese threat.” I’m not sure much will come of it, and to be honest, some of the more strident noise about the Wuhan virus and other stuff was just, I think, excessively noisy. That’s a personal opinion, of course.

Margaret Myers

Thank you so much. Cynthia.

Dr Cynthia Sanborn

Okay, well, I think before we ask what Latin America has learned about China in this period, I think we need to focus on what Latin America has learned about itself and what that means, in terms of how it looks back at China. I think most of us learned or saw, very graphically, what we knew, was our states being really incapable of responding to this, kind of, emergency, having public health systems seriously under supported and collapsing, and in the cases of countries with very open economies, like much of us in South America, the inability to produce just about anything domestically that we need. I mean, we had to import masks, we had to import PPE, we had to import oxygen plants, we had to import just about everything we needed to get emergency areas of hospitals up and running. And I think, as a result of that, one of the things that has become painfully clear, is that Latin America needs to work on being able to – you know, to bolster its health systems, to bolster its domestic production of certain things it needs. Schools, I mean, we’ve had a whole generation of students out of school for over a year, and the ability to connect schoolchildren around our countries has been terrible, it’s been really disastrous the number of kids that have not been able to keep up its education. So it’s been very clear that our efforts to digitally connect our populations have also been deficient. And I think we’re seeing a, kind of, waking up of our voters, in terms of demanding that our governments respond to this.

And to the extent that we engage with China or anyone else, I think there’s a demand that the quality and that the priorities be different. And so, we’ve been focusing on exporting basic commodities to China, to satisfy China’s resource needs and food needs. But now there’s a demand for scientific and technological co-operation. In some of our universities, in Chile, Argentina, Brazil, and here in Peru too, have been pressuring for more engagement in science, more engagement in technology, more engagement in engineering.

There is a nationalist, kind of, defensive attitude rising in a number of our countries, that has not been as strong before, to rethink our investment priorities, to rethink our deals with those who come here and extract resources. And maybe I’m most affected, because we’re about to see a possible sea change, in terms of Peru in that area. But Chile’s also, you know, about to rethink its whole constitution and how it engages what its economic model is, so to speak. There’s been great deception with open economies exporting to the world. We’ve been growing, we’ve been reducing poverty. But there’s tremendous popular deception with the inequality that has resulted of that.

And so, I think, as we learn, as our voters and our communities learn, that we need to up our game, in terms of addressing basic needs of the population, that the way we engage with China, it needs to change. In some cases, it’s exacerbated our commodity dependency, so the demands to change that are very clear. To the extent we can, and as Chris, again, said, I think the lack of – I wouldn’t say ‘solidarity’, the lack of collaboration in Latin America among our governments, in terms of our dealing with China, is a handicap to that. I would hope that an area of scientific and technological development, that our universities can engage together and engage better with the Chinese counterpart as well as those in the US and Europe. But as I said, I think we need to focus more on what we’ve learned about ourselves.

And I guess, it was very interesting what Alvaro said, in terms of the Chinese preparing more people to come to Latin America, I think also that’s an important change we need to look at. We’ve seen both – I mean, I’ve been looking at Chinese investors for over a decade in a Latin America, and in some cases they’ve been very distant, very far away. You know, the high level CEOs of the companies investing here didn’t even bother to come. But now we see the Chinese training more and more people to come to know Latin America, to work in Latin America. To the extent our travel restrictions are lifted and we can go both ways, that’s also going to be very important. And again, the US and European countries also need to step up their game, in terms of scientific, technical collaboration, in terms of training, in terms of, you know, academic and professional exchange as well.

I won’t respond further to the G7. I share very much what’s said. I think it’s more heat than light, and I think Jeff Sachs and others have come out already and criticised very strongly the fact that China, Russia and the rest of us are out of this discussion. And I think there is a lot of noise, and it’s unfortunate noise in terms of rallying around to respond to some of the demands the world has right now, the rest of the world has right now. So thanks.

Margaret Myers

Thank you so much. Let me turn to some of the questions that we have in the Q&A. And I’m going to pose three, all at once, just given our limited time, and then we’ll turn to the three of you, and please respond to whichever of those you would like to.

First of all, from Carolina Quiero, and please excuse me, Carolina, if I’m pronouncing your name incorrectly. Just, “Can anyone shed any light on the percentage of disturbed vaccines versus donated vaccines in the region? And any thoughts on the, sort of, decision making and negotiation processes, vaccine-related to the decision making and negotiation processes that Latin American governments engaged in with China over the past few months?”

Also from Robert Suitor of [inaudible – 52:12], “To what extent does the panel think that China and Latin America media co-operation has influenced perceptions of China’s vaccine diplomacy positively or otherwise?” We’ve talked a little about the, sort of, wolf warrior phenomenon that we saw early on amid the pandemic. But there’s been real extensive media campaign and, also, you know, a couple of you referenced China’s promotional efforts related to, you know, the distribution of vaccines and medical supplies. Has it been effective at all, from either positively or negatively? Does it resonate with local populations?

And then, finally, from Baroness Hooper, “Could you say more about US restrictions on AstraZeneca exports from Mexico, and I know that was referenced once, in the Dominican Republic. An AstraZeneca dose costs $5 a dose and the Chinese dose costs 20. Do costs vary elsewhere?” And this is something that – this is information I know I’ve struggled to gather, so I don’t know if any of you have anything more to say about that in particular.

So let’s go backwards this time, and I’ll start with Cynthia, if you don’t mind.

Dr Cynthia Sanborn

Okay, well, I think that – I haven’t looked at the data recently across all countries, but I think by far the vast majority of vaccines that Latin America, particularly South America, have accessed, have been purchased not donated. The donations have been relatively small. There’s the share from COVAX, it remains very small. And in Peru, as it was said, I mean, we had a small number of donations that ended up being – causing a political scandal, because it was a certain sector of the elite that got access to them. But it was a very small number, and in fact, it’s, sort of, off the map again, in terms of the Peruvian public opinion, we’ve been tied up in other things. We’re trying to purchase, we’re purchasing. I mean, Chile went out there and bought from everybody, as was said. Sebastián Piñera really doesn’t care who they buy from, they just, you know, he’s a speculator, he did it well, and he got the vaccines from everybody, and the Chinese were first in line. And when we finally had our third President in the last year, Francisco Sagasti, finally, sort of, got in charge and started buying as well.

And it’s really about purchasing, as Carolina says, it’s not about expecting charity. And I agree, the costs for purchasing are, you know, the big secret. A lot of investigative reporters are trying to understand what each country’s paid. We negotiated separately. But it really, for the governments in this region, it’s less about cost than availability.’ There’s been – there was issues – there was difficulty in negotiating with Pfizer, as was said. Argentina, Brazil, had difficulties, in terms of the conditions, originally. Peruvians’ former President Martin Vizcarra actually held up the negotiations with Pfizer and has been questioned for that, because of these concerns about draconian restrictions. But it’s really about getting access to them right now.

On the media question, I can’t answer that as well as some other here, but I do think that although there’s been an effort by the Chinese to brand their presence, and again, it’s less about donations than about sales, I think a lot of us have so much else going on, that the Chinese presence in our major media is fairly limited. It hasn’t been a, sort of, big front page issue. A front page issue is our elections, our constitutional assemblies and our violent protests. I don’t think that China’s profile has been as high as perhaps some in the US are concerned about and elsewhere. Let’s see what Christopher has to say now, and Alvaro.

Margaret Myers

Yeah, please go ahead, thank you.

Dr Christopher Sabatini

So, in order, yeah. The data I’ve seen is mostly on purchases. Is all, entirely, on purchases. I’m sure Cynthia and Alvaro have more on the ground data, but I can only assume that the number of donations is relatively small in that. So – and I guess to the second – the third issue that Baroness Hooper mentioned, we really don’t know the pricing. And these are purchased en masse, it is a question, we are seeing news trickle out, like the story about Pfizer demanding collateral from the Argentine and Brazilian Governments. So the pricing is really unfair right now. So I wouldn’t even dare speculate.

On the other point that Baroness Hooper mentioned, on the US restrictions, that was information that was provided to me from the Argentine Government, and supposedly that logjam has broken, and that just, I think within the last week, they’ve announced that the Mexican factories will start shipping, or already have started shipping, AstraZeneca vaccines within Latin America. But my understanding of it was it was a series of restrictions to retain some of the materials, inputs for the US domestic market, that slowed things down for the manufacturing of AstraZeneca jab in Mexico.

And then, last, on the diplomatic and media coverage. Again, this is something where it’s been, sort of, handed to the Chinese state media machine, in terms of being able to highlight what China’s done. They’ve been, you know, they’re – you know, this is both the benefit of having a free press, is they can say anything and criticise the US Government or free governments for failures, but the downside is that they don’t serve as a tribune for US successes, and nor should they. But whereas on the other hand, you have the Chinese state media, that has been out there blowing the horn for China’s successes, in a way that just keeps on going, and fills that vacuum. And as we all know, Chinese media has become a much bigger presence in Latin American media, but it’s still relatively fringe. So it’s not that it’s, you know, it’s not making the headlines of El Comercia or other reputable newspapers. It’s there, I can’t – you know, I think – there’s polling data coming out about the extent to which people follow it, but I don’t see it as being the primary news source for most individuals. And so I think, again, they’re just simply repeating what has been a very good storyline by the government.

Margaret Myers

Thank you so much, Chris, and Alvaro, we’ve left you with a very long one minute, apologies.

Dr Alvaro Mendez

Sure, a very long one minute, so I’m just going to quickly answer two questions. The difference between donations and sales are massive. Donations to Latin America, 1.27 million, versus 287 million doses. So, it’s a massive difference and of course, China is getting new markets. One of the vaccines, I think one of them, trades publicly in Hong Kong. CanSino Pharmaceutics Biological $357 Hong Kong per share. So, there is an element of profit, of course, as there is in the Pfizer and AstraZeneca, of course, because they’re also public trade – trade publicly.

And since I don’t have any – that much time, on media co-operation, massive media co-operation, and that comes in two ways. The Chinese bring a lot of people, freelancers, to see China, and that, you know, that gets a lot of interest. I go to China and it means that I can also make contacts. There are lots of freelancers in the media environment in Latin America. And I have given interviews, several times, to someone who doesn’t have any ideas from the press, and then I see myself later on, on CGTV – CGTN Spanish. So it’s very interesting to see how they are working on that model and I think it’s very attractive also financially for some people, freelancers that do not have that many opportunities, so they have to freelance. So, definitely that’s an element that, of course, you see as soft power in IR terms through the press and the media. So, I think this is it for today, because I don’t have more time.

Margaret Myers

Thank you, and sorry to leave you with such little time to respond.

Dr Alvaro Mendez

No problem.

Margaret Myers

Please join me, everyone, in thanking our fantastic panel. Thank you also so much for joining us for this very, very interesting and engaging discussion. And certainly, there will be much more to follow in the coming months and years as this relationship continues to evolve, just as it has, over the past couple of decades. So, thank you again.

Dr Christopher Sabatini

Thank you, Margaret. Thank you very much.

Dr Alvaro Mendez

Thank you so much. Thank you, everyone, a pleasure to be here.