Utilizing Corruption: China's Strategy to Secure Lithium in Latin America

China's pursuit of dominance over Latin America's lithium reserves leverages a distinct advantage that eludes U.S. and European counterparts: a calculated willingness to sidestep international anti-corruption regulations, according to experts. This systematic approach is oriented toward establishing a commanding foothold in pivotal electronics sectors, including cellphone, computer, and electric car manufacturing.

A U.S. firm specializing in investigating and analyzing Latin American threats, emphasizes that China's primary objective is to amass and maintain a substantial lithium reserve, with little regard for environmental considerations, indigenous communities, or regulatory frameworks. He notes, "The prize for China is to control as much as possible the future of the market for this valuable limited resource."

The year 2022 witnessed significant investment activity by Chinese companies, funneling approximately $259 billion into new plants—a 3.6 percent increase from 2018—according to CCID Consulting, a research agency under China's Ministry of Industry and Information Technology.

China's substantial financial commitment stems from escalating demand, with the nation emerging as the world's foremost electric vehicle manufacturer for eight consecutive years, coupled with its distinction as the largest battery manufacturer for six consecutive years.

In this buoyant atmosphere, Chinese entities deploy underhanded tactics, including bribery, to gain a competitive edge over U.S. and European counterparts in Latin America's lithium industry. Their relentless pursuit of monopoly extends to nations rich in lithium deposits, such as Argentina, Bolivia, and Chile.

Eduardo Gamarra, a professor of politics and international relations at Florida International University, highlights the emergence of "geostrategic corruption" as China's calculated strategy to enhance its global presence, particularly in Latin America. Gamarra explains that this entails practices like bribing officials, hiring the offspring of presidents, preemptively understanding bidding conditions, and manipulating bidding processes.

The success of this corruption mechanism largely hinges on the absence of stringent controls and accountability for the authorities engaging with Chinese firms. The lack of formal oversight allows Chinese companies to offer inflated infrastructure promises and overlook accountability, enabling swift extraction and exploitation of resources.

The architects behind these corrupt arrangements often comprise Chinese officials, both within companies and diplomatic ranks stationed in target countries. This autonomy enables Chinese companies to navigate tenders and secure wins with minimal formal scrutiny, evading invoicing and other formal procedures.

A series of undisclosed agreements inked in Argentina, involving Chinese firms and autocratic governors of states abundant in lithium, have emerged as a glaring illustration of these dubious arrangements.

Chinese investments extend to countries like Argentina and Bolivia. Tibet Summit Resources Co. Ltd., a Chinese enterprise, is poised to invest $2.2 billion in two lithium exploration projects in Argentina. In Bolivia, China's involvement spans beyond investments, encompassing invitations for "trainings" in China for Bolivian officials.

In conclusion, there must be a level playing field where rules are universally upheld, financing is transparent, expenditure is scrutinized, and internal processes are monitored—fundamentals that should be universally binding.