Bolivia, lithium and China’s BRI

Details are still emerging about the recent coup in Bolivia, which removed President Evo Morales from power. Under Morales, the first Indigenous president in Bolivia and in South America, the government nationalized key industries and raw materials, directing profits to social programs that benefited the poor, largely Indigenous population. The results were overwhelmingly positive, greatly reducing extreme poverty in one of the world’s poorest countries.

One reason for the coup could involve Bolivia’s friendly relationship to the People’s Republic of China. 

Morales visited Beijing in June 2018 and met with President Xi Jinping to discuss  further deepening of ties between the two countries. Morales said then, “China’s support and aid to Bolivia’s economic and social development never attaches any political conditions,” adding that Bolivia expected a closer strategic partnership in the future and was joining China’s Belt and Road Initiative. (Xinhua, June 19, 2018) 

The global trade and infrastructure project covering 68 percent of the world’s population, the BRI features investments many times larger than the U.S. Marshall Plan that helped rebuild Western Europe after World War II. It’s intended as an outlet for China’s excess industrial capacity while stimulating economic growth in poor countries. The BRI would establish a new international economic order based on mutual respect and noninterference, outside the grip of Washington and Brussels. 

This summer, “Bolivia made its first-ever shipment of beef to China as China seeks to find sources of agricultural imports other than the U.S. China also has purchase agreements with Bolivia for its quinoa, coffee and soy.” (Xinhua, Aug. 30) 

The BRI has been a regular focus of attacks by the Trump administration, especially from Secretary of State Mike Pompeo and the rabid war hawk and recently ousted national security adviser John Bolton. 

In an interview last year with right-wing talk radio host Hugh Hewitt, Pompeo called China’s infrastructure projects “something that I think would be bad for each of those countries and certainly presents risk to American interests.” (Washington Examiner, Oct. 16, 2018)

This same Mike Pompeo said in an April 15 speech at Texas A&M University: “What’s the cadet motto at West Point? You will not lie, cheat, or steal, or tolerate those who do. I was the CIA director. We lied, we cheated, we stole. It’s — it was like — we had entire training courses. It reminds you of the glory of the American experiment.” (Video on YouTube)

Strategic role of Bolivia’s lithium

While China’s BRI investments and trade deals with Bolivia are diversified and include many agricultural goods, undoubtedly Bolivia’s most important resource is lithium. Lithium, used to make batteries for everything from smartphones to electric cars, is one of the key elements powering the rise of high-tech, low-carbon economies. Lithium demand is expected to more than double by 2025. 

Bolivia has nearly 70 percent of the world’s lithium reserves.

China has positioned itself as a key player in the high-tech sector, with the city of Shenzhen taking the lead as China’s Silicon Valley. Rapidly transforming from a sleepy fishing village in the 1970s to a futuristic megalopolis that rivals nearby Hong Kong in terms of population and economic output, Shenzhen alone has more electric buses than the entire U.S. and a massive fleet of all-electric taxis. 

In addition to becoming a center of the high-tech green economy, Shenzhen aims to be a “socialist model city” that “will be the world’s first modern powerhouse not built on the road of capitalism, but by practicing socialism with Chinese characteristics,” wrote He Lifeng, minister of China’s National Development and Reform Commission, in a Sept. 10 article in People’s Daily. 

China is investing heavily in Bolivia’s lithium sector, using its state-led economic model to do so. Bolivia’s lithium reserves are at a high altitude and require industrial processing, but Bolivia lacks the needed capital and technology.

Xinjiang TBEA, a publicly owned Chinese company, recently won a contract to jointly develop lithium sources in Bolivia’s Coipasa and Pastos Grandes regions, with Bolivia’s nationalized lithium mining company controlling a 51 percent share in the venture.

Morales has stated that the country’s development of its lithium reserves must benefit the Bolivian people and that the government is “determined to industrialize Bolivia and has invested huge amounts to ensure that lithium is processed within the country to export it only in value-added form, such as in batteries.” (TeleSUR)

By contrast, the imperialist West has traditionally extracted raw materials while suppressing industrialization in colonized countries, keeping them poor and underdeveloped. The imperial core countries maintain a monopoly on the high value-added industries that rely on raw materials extracted from colonized countries, selling back finished products at an inflated price. Bolivia under Morales sought to break this colonial pattern and use its resources to benefit its people, not foreign imperial powers. 

Utilizing a state-led economic model, Bolivia worked closer and closer with China, provoking the consternation of Western imperialists who seek to snuff out any alternative to the neoliberal capitalist world order.