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Amid tensions with Washington, President Luis Arce’s government is heavily dependent on Beijing for trade, investment and economic support.
Bolivia is facing one of the worst economic and monetary crises in its history. GDP expansion is at its lowest point in two decades, with the added bonus of an economic recession, a bills crisis, peak inflation and peak unemployment rates. The Central Bank of Bolivia There is also a shortage of foreign currency, especially U. S. dollars, on which much of the Bolivian middle class depends for monetary stability and market predictability. Recent scandals in Bolivia’s energy production, coupled with long-term shortages of vegetable fuel and electricity in remote areas, add to the turmoil.
While the United States no longer prioritizes Bolivia, given its strained relations with the socialist government in La Paz, China has moved quickly to help Bolivia and strengthen its influence in the region. Recently, China has helped Bolivia triumph over other crises, adding the COVID-19 pandemic, so Beijing delivered millions of vaccine doses to the country’s population. While China’s monetary aid and strategic investments will pull Bolivia out of its worst economic crisis, it is China that will reap the maximum benefits from the partnership, as it will move the South American country’s economic dependence away from the United States.
When Bolivia’s $15 billion in foreign reserves fell to $2 billion, China provided Bolivia with ever-increasing sums in yuan. Bolivia is now in a position to use the Chinese currency for the purposes of industrial agreements, which will allow it to de-dollarize its industry and escape the worst effects. of its economic crisis. Approximately 10% of Bolivian industry is currently carried out in yuan. Bolivia is following the example of Argentina and Brazil, which have to de-dollarize their countries to reduce their dependence on U. S. -led markets and diversify their economies. and monetary profile.
Through the China Forum and the Community of Latin American and Caribbean States (China-CELAC Forum), Bolivia has a developing spouse from China in a region that was once ruled by the United States. At the CELAC Forum, the talks between Beijing and La Paz have been broader and more frequent. At the end of April, Bolivian Foreign Minister Celinda Sosa Lunda visited China to discuss the evolution of their industrial and economic alliance.
At their assembly in Beijing, Sosa Lunda and Chinese Foreign Minister Wang Yi discussed the option of Bolivia joining the BRICS bloc of nations. They reinforced their stance against U. S. “hegemony and bullying,” while tentatively discussing infrastructure investments under the Belt and Road Initiative. At the same time, U. S. aid and industry to Bolivia have been in steady decline since the early 2000s. China has now overtaken the United States as Bolivia’s largest trading partner, at a rate of about five to one.
In the face of the economic and monetary disaster, China has also provided Bolivia with greater loans and investments. Last year, China signed a $1. 4 billion (previously $1 billion) deal for a consortium of three Chinese state-owned companies to extract Bolivian lithium through commercial facilities. The country has the largest lithium reserves in the world. A $350 million (previously $250 million) loan from China’s Export-Import Bank, repayable over 20 years at an interest rate of 2 percent, also enabled Bolivia to build a zinc refining plant, since zinc is one of Bolivia’s main exports. Despite slowing production and logistical disruptions similar to energy exports, those Chinese systems have helped Bolivia cope with its economic crisis.
With these foreign exchange and investment loans, China is now Bolivia’s main source of external credit; it still represents only a small portion of its total external debt. Bolivia’s yuan reserves are also rising, either in nominal terms or as a proportion of its total debt. foreign exchange reserves. The yuan is now the fastest-growing currency among the Central Bank of Bolivia’s foreign exchange reserves. Bolivian consumers and business owners are also opting for the yuan over the dollar to conduct their business and trade. The government of President Luis Arce, like other South American governments, sees it as an “alternative option” to the “dollar liquidity crisis. “
This timely arrival by China will likely push Bolivia further toward a select regional order, in which South American states led by leftist governments depend on China rather than the United States for aid and participation. Arce himself reinforced this idea in an interview with CGTN. America, a Chinese state-controlled media outlet, claiming that “China comes from a popular government. . . that cares about the people” and that Bolivia is a member of an organization of “many countries that are seeking to create another world, a more egalitarian global and more justice in the global.
China is strengthening its position among non-Western countries, seeking to build its symbol as a representative of the Global South. While the United States is perceived as a complicated ally, China is seen as a more impartial and solid partner. As a result, a growing number of Bolivians now see China as a reliable bet for their nation’s long-term, without the United States as the sole dominant force.
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Bolivia is facing one of the worst economic and monetary crises in its history. GDP expansion is at its lowest point in two decades, with the added bonus of an economic recession, a bills crisis, peak inflation and peak unemployment rates. The Central Bank of Bolivia There is also a shortage of foreign currency, especially U. S. dollars, on which much of the Bolivian middle class depends for monetary stability and market predictability. Recent scandals in Bolivia’s energy production, coupled with long-term shortages of vegetable fuel and electricity in remote areas, add to the turmoil.
While the United States no longer prioritizes Bolivia, given its strained relations with the socialist government in La Paz, China has moved quickly to help Bolivia and strengthen its influence in the region. Recently, China has helped Bolivia triumph over other crises, adding the COVID-19 pandemic, so Beijing delivered millions of vaccine doses to the country’s population. While China’s monetary aid and strategic investments will pull Bolivia out of its worst economic crisis, it is China that will reap the maximum benefits from the partnership, as it will move the South American country’s economic dependence away from the United States.
When Bolivia’s $15 billion in foreign reserves fell to $2 billion, China provided Bolivia with ever-increasing sums in yuan. Bolivia is now in a position to use the Chinese currency for the purposes of industrial agreements, which will allow it to de-dollarize its industry and escape the worst effects. of its economic crisis. Approximately 10% of Bolivian industry is currently carried out in yuan. Bolivia is following the example of Argentina and Brazil, which have to de-dollarize their countries to reduce their dependence on U. S. -led markets and diversify their economies. and monetary profile.
Through the China Forum and the Community of Latin American and Caribbean States (China-CELAC Forum), Bolivia has a developing spouse from China in a region that was once ruled by the United States. At the CELAC Forum, the talks between Beijing and La Paz have been broader and more frequent. At the end of April, Bolivian Foreign Minister Celinda Sosa Lunda visited China to discuss the evolution of their industrial and economic alliance.
At their assembly in Beijing, Sosa Lunda and Chinese Foreign Minister Wang Yi discussed the option of Bolivia joining the BRICS bloc of nations. They reinforced their stance against U. S. “hegemony and bullying,” while tentatively discussing infrastructure investments under the Belt and Road Initiative. At the same time, U. S. aid and industry to Bolivia have been in steady decline since the early 2000s. China has now overtaken the United States as Bolivia’s largest trading partner, at a rate of about five to one.
In the face of the economic and monetary disaster, China has also provided Bolivia with greater loans and investments. Last year, China signed a $1. 4 billion (previously $1 billion) deal for a consortium of three Chinese state-owned companies to extract Bolivian lithium through commercial facilities. The country has the largest lithium reserves in the world. A $350 million (previously $250 million) loan from China’s Export-Import Bank, repayable over 20 years at an interest rate of 2 percent, also enabled Bolivia to build a zinc refining plant, since zinc is one of Bolivia’s main exports. Despite slowing production and logistical disruptions similar to energy exports, those Chinese systems have helped Bolivia cope with its economic crisis.
With these foreign exchange and investment loans, China is now Bolivia’s main source of external credit; it still represents only a small portion of its total external debt. Bolivia’s yuan reserves are also rising, either in nominal terms or as a proportion of its total debt. foreign exchange reserves. The yuan is now the fastest-growing currency among the Central Bank of Bolivia’s foreign exchange reserves. Bolivian consumers and business owners are also opting for the yuan over the dollar to conduct their business and trade. The government of President Luis Arce, like other South American governments, sees it as an “alternative option” to the “dollar liquidity crisis. “
This timely arrival by China will likely push Bolivia further toward a select regional order, in which South American states led by leftist governments depend on China rather than the United States for aid and participation. Arce himself reinforced this idea in an interview with CGTN. America, a Chinese state-controlled media outlet, claiming that “China comes from a popular government. . . that cares about the people” and that Bolivia is a member of an organization of “many countries that are seeking to create another world, a more egalitarian global and more justice in the global.
China is strengthening its position among non-Western countries, seeking to build its symbol as a representative of the Global South. While the United States is perceived as a complicated ally, China is seen as a more impartial and solid partner. As a result, a growing number of Bolivians now see China as a reliable bet for their nation’s long-term, without the United States as the sole dominant force.
Bolivia is facing one of the worst economic and monetary crises in its history. GDP expansion is at its lowest point in two decades, with the added bonus of an economic recession, a bills crisis, peak inflation and peak unemployment rates. The Central Bank of Bolivia There is also a shortage of foreign currency, especially U. S. dollars, on which much of the Bolivian middle class depends for monetary stability and market predictability. Recent scandals in Bolivia’s energy production, coupled with long-term shortages of vegetable fuel and electricity in remote areas, add to the turmoil.
While the United States no longer prioritizes Bolivia, given its strained relations with the socialist government in La Paz, China has moved quickly to help Bolivia and strengthen its influence in the region. Recently, China has helped Bolivia triumph over other crises, adding the COVID-19 pandemic, so Beijing delivered millions of vaccine doses to the country’s population. While China’s monetary aid and strategic investments will pull Bolivia out of its worst economic crisis, it is China that will reap the maximum benefits from the partnership, as it will move the South American country’s economic dependence away from the United States.
Joseph Bouchard is a freelance journalist and analyst who covers the geopolitics of the Americas, with specialized reporting in Bolivia, Colombia, and Brazil. His articles have appeared in The Diplomat, Mongabay, Le Devoir, La Razón, Responsible Statecraft and Brazil Report. He is a contributor to Young Voices.