Is China Becoming a Hegemonic Challenge in Latin America and the Caribbean? A Political Economy Analysis of the Nicaragua Interoceanic Canal Project

Abstract

In this article, we provide a theoretical and empirical evaluation of the argument that China is becoming a hegemonic challenge in Latin America and the Caribbean (LAC). We argue that, while there is a trend that China has become increasingly dominant in the economic affairs of LAC, the perceived strength of China as a challenger to the U.S. hegemony is shaped by different strategies of Chinese involvement. Focusing on the financing arrangement for infrastructure projects, our case study of the Nicaragua Interoceanic Canal project shows that the challenge that China has posed to the U.S. hegemony might not be as strong as expected. We analyze the controversies revolving around the Canal project and examine how local communities have responded to the project. We conclude that, while the Nicaragua Interoceanic Canal project is ambitious, its success depends on how much support the PRC government and Chinese banks provide and how well the Nicaraguan government addresses the various concerns of the local communities.