Building Sino-Russian north-south trade: Obstacles in Africa and Latin America for two lonely powers
 Though increasingly isolated from traditional clients, Russia and China possess immense potential for trade and investment in Africa and Latin America as options diminish elsewhere.
Apart from established trade relations in Africa, with Egypt, Algeria, Morocco and South Africa, Russia has displaced France militarily through its Wagner Group of mercenaries that have extended their influence in Mali, Niger, Chad, Cote d'Ivoire and Burkina Faso.
Chinese investment in Africa is largely concentrated in transport and energy in Nigeria's railway as well as building railways in Kenya, Ethiopia and Zambia. More than 900 Chinese firms operate in Nigeria, the highest foreign-owned private company count among African countries.
By recognising the opportunities and confronting the obstacles presented by these regions, these increasingly isolated states are establishing prosperous and sustainable relationships outside their usual comfort zones. Through enhanced diplomatic efforts, cultural exchanges, and responsible investment strategies, the Russo-Chinese external alliances have the potential to reshape regional economies, contribute to sustainable development, and foster greater geopolitical stability.
Russia’s economic interests in Latin America, particularly compared with those of the United States and the People’s Republic of China, are small. However, in specific countries such as Argentina and Paraguay, Russian economic interests are significant and give Moscow leverage to pursue other strategic objectives.
A key hub of Russian activity is in Nicaragua, under the protection of the Ortega regime. In addition to allowing a permanent presence of some 250 Russian military personnel on the ground, Nicaragua is the Russian base for its GLONASS (Global’naya Navigatsionnaya Sputnikovaya Sistema) navigation system, a cyber warfare and training centre in the state telecommunications building.
For more than 20 years, China has developed close economic and security ties with many Latin American countries, including Brazil and Venezuela. Chinese state-owned firms are heavily involved in energy development; PowerChina, for example, has more than 50 ongoing projects across five Latin American countries – including Argentina, Brazil, Bolivia, Chile and Peru.
Africa and Latin America are homes to abundant natural resources, including oil, gas, minerals, and agriculture. Russia, renowned for its energy expertise, and China, with its growing appetite for raw materials, can exploit these resources through vital investments and strengthened trade ties.
Both continents face vast infrastructural gaps and a need for development projects, ranging from transportation networks to energy facilities. Russia and China possess the expertise, technology, and funds to contribute significantly to infrastructure development, fostering economic growth and trade connectivity.
Historically, Europe and the United States have dominated trade with Africa and South America. Russia and China face competition, if not outright hostility, from established players who maintain strong economic ties and cultural connections. Overcoming this challenge requires offering more substantial incentives and fostering a compelling value proposition.
Africa and Latin America consist of diverse nations, each with unique political systems, cultural nuances and historic ties. Understanding and navigating these intricacies is crucial to establishing successful trade alliances. Russia and China must build lasting partnerships and adapt their approaches to fit the local socio-political landscape.
Though increasingly isolated from their traditional clients, Russia and China possess immense potential for trade and investment in Africa and South America.
By recognising the opportunities and confronting the obstacles presented by these regions, they can establish prosperous and sustainable relationships. Through enhanced diplomatic efforts, cultural exchanges, and responsible investment strategies, the Russo-Chinese alliances have the potential to reshape regional economies, contribute to sustainable development and foster greater geopolitical stability.
Both continents face vast infrastructural gaps and a need for development projects, ranging from transportation networks to energy facilities. Russia and China possess the expertise, technology, and funds to contribute significantly to infrastructure development, fostering economic growth and trade connectivity.
To minimise competition from Western powers, Russia and China will intensify diplomatic engagements at both bilateral and multilateral levels. Strengthening political ties, fostering cultural exchanges, and understanding the specific needs of partner countries should mitigate resistance from established players.
Promoting educational scholarships, cultural exchange programmes, and business forums will cultivate a deeper understanding of the Russian and Chinese cultures among Africans and South Americans. Such people-to-people interactions foster goodwill and strengthen the foundation for long-term trade relationships based on mutual trust and respect.
Because of the Russo-Ukrainian War on one side of the world and China's recent authoritarian turn, both the Chinese and the Russians have isolated themselves from the West and to a large extent thrown themselves into each other's arms.
With this unique development, the fictional Orwellian world of Nineteen Eighty-Four seems to take shape as the states of Oceania, Eurasia and Eastasia of George Orwell's story, in which Africa and South American are presumed to be the battleground to be fought over by the three contending powers.
While the powers that be in Washington, Moscow and Beijing do not tell us much as their wars with each other progress, there in little to report in any detail. Given the static state of affairs, inertia that grips the field, there is little that cannot be discerned at a glance.
It appears to boil down to few salient elements that dictate a predictable future - at least in the short term. China will again pretend that it can escape the source of its wealth, the export-led economy that has served it so well. From all appearances, Beijing intends to use its enormous war chest of ready cash to get prosperity going again through stimulus spending. This appears to be based on the assumption that pump priming will create a self-sufficient nation that is the United States but is not China.
In decoupling from China through reshoring, nearshoring and homeshoring, America will attempt to restore the domestic production capability that it possessed 40 years ago and has been draining away ever since. China's best hope will be to cultivate the third world, particularly Africa but increasingly Latin America.
The good news is that the wealth of the world is on the rise and distributed more equitably thanks to the growth of free markets worldwide. While the rich get richer, so do the poor. So what China produces there is reasonable expectation is that markets will grow to sustain steady but slow expansion. Undoubtedly, Russia can provide a somewhat captive base market because of its proximity to China.
Such thinking is based on attitudes present today that extend into the future, that continental dependence on Russian oil and gas and that China replace Europe in this regard. Thus, China with its lack of a colonial past can more easily wheel and deal in Africa and Russia with its traditional Anti-Americanism be more welcome in Latin America. Meanwhile, America and Europe will have to restore domestic manufacturing capacity and re-build the navy ship by ship and the army platoon by platoon and ensure the government take greater care encouraging strength in our assets rather the comfort of our liabilities. |
