Chinese companies are receiving resistance from Latin American states after setting out to obtain lithium from them. These countries include Chile, Bolivia, Mexico, and Peru. China has the largest electric vehicle market in the world and needs the lithium from Latin American countries, who have some of the world’s largest lithium reserves, to make them. The reason these deals aren’t going through is because the miners face environmental, protectionist, and occasionally political issues. Chilean officials have been haggling with Chinese manufacturing company BYD since 2022. The deal would consist of BYD funding the improvement of mining technology in the developing country in return for cheap lithium prices. In other countries like Mexico and Peru, contracts are being potentially violated or canceled entirely. In Bolivia and Chile, governments have “raised legislative barriers” to reduce the amount of foreign investment in the countries and prevent the aforementioned contract disputes from occuring in the first place. Because of this, China is turning to countries where they can operate without as much legal trouble, like Brazil, Argentina, and Mali.
It seems like China is very insistent on making deals for lithium. I don’t blame their aggression, electric vehicles look like they’ll be the future of our society. However, these Latin American countries seemed to have caught wind of what I think China’s grand scheme is. They’re in an economic rivalry with the U.S., so they’re moving to America’s neighbors to redirect possible pipelines, making the U.S. either find a new partner, or continue to buy from China. It’s also a really tough choice for the Latin American countries. Either let the Chinese in, which increases jobs and improves technology, or decline their offers, which retains relationships with the U.S., and removes the risk of a bad deal with historically fraudulent Chinese electric vehicle companies. Going back to the BYD and Chile deal, if I were the Chilean government, I would accept the deal. Latin America is filled with countries with massive lithium deposits, and it would be a massive leg up on the competition if BYD improved the technology and job market of Chile. Dealing with Chinese companies has typically led to exploitation of both natural and human resources, so the moral choice would be the opposite. It’s up to the Chilean government to decide which comes first: the environment and human rights, or economic power and improved technology.
This relates to class because China is a major actor in the global arena and the large lithium mining industry relates to many global challenges, such as environmental, human rights, and economic development. It’s also an interaction between two states, which is the definition of international relations and an example of foreign policy.