Colombia is unprepared to handle the risks of Chinese tech investment

This article, co-authored with Daniel Poveda and Christian Heinze, is part of the report “Understanding China’s Tech Footprint in Colombia“, published on December 5th, 2023 by Colombia Risk Analysis. Daniel is the Analysis Coordinator at Colombia Risk Analysis. Christian interned at Colombia Risk Analysis and is a graduate student at ESCP Business School.

Colombia and China are becoming increasingly closer trade partners and strengthening their political ties. Cutting-edge Chinese technology and its applications in mobility, transportation, renewable energy, infrastructure, healthcare, and security are essential to understanding this growing relationship. While many opportunities are on the horizon, the Petro administration seems eager to take advantage of the economic benefits of coupling with China but may be losing sight of the potential risks.

The People’s Republic of China (PRC) has steadily increased its political and economic influence in Colombia. In late October, Colombian president Gustavo Petro flew to Beijing, where he shook hands with Chinese President Xi Jinping and agreed to upgrade the relationship between the two countries to a “strategic partnership,” a step short of joining China’s Belt and Road Initiative. Although the world is reasonably focusing on the geopolitical conflicts wreaking havoc in Eastern Europe and the Middle East, it is becoming increasingly clear that the tech industry and the digital space will play a central role in shaping the global order. 

While Colombia remains and will likely continue to be the United States’ closest ally in the region, its growing relationship with Beijing is raising eyebrows in Washington. These concerns arise as Colombia is on the verge of making critical decisions regarding technology investments, including the upcoming 5G tender and ongoing contracts with Chinese companies in transport and mobility, healthcare, renewable energy, transportation, and security. 

Colombia has set ambitious goals for digital connectivity, aiming to close the gap between urban and rural areas and maintain industrial competitiveness. The Petro administration’s investment plans rely heavily on clean energy, mobility, and transportation infrastructure. Our previous report, Local Perceptions of Chinese Investment in Colombia, suggests China has already invested heavily in Colombia. Further Chinese tech investment in the country could be beneficial but has impactful geopolitical and strategic implications. The quality and price advantages of Chinese technologies should not prevent or postpone a necessary and urgent discussion on the potential privacy and security risks they may generate in Colombia.   

As Colombia is preparing to welcome additional investments by Chinese companies in tech-related sectors, there are four key considerations we suggest Colombian policymakers take into account.

1. Colombia does not view China through a coherent or well-thought-out geostrategic and geopolitical lens. The public discussion about China in Colombia remains short-sighted and littered with prejudices. Colombia has yet to fully develop a strategic plan to guide its relationship with China, which can help maximize its benefits and mitigate risks. The country lacks a clear plan for priority investments in critical sectors based on a comprehensive assessment of the comparative advantages and potential dangers of an increased engagement with China.

2. Technology investment decisions should be evaluated not only under technical criteria but also under geopolitical considerations. Unless Colombia establishes clear standards and specifications for investments in the technology sector to promote interoperability, it could open space for unwarranted dependence, influence, or put the country at risk of being anchored with Chinese providers, which could put other competitors at a disadvantage and go against some signed trade agreements.

3. Despite the actions taken by other countries after suffering cyber attacks, in Colombia, neither the whole of government (including Congress) nor public opinion assimilates the urgency of addressing and preventing cybersecurity threats. Despite the evident vulnerabilities in its public and private sectors, Colombia has not created a National Cybersecurity Agency (proposed by the current government but rejected by Congress) and lacks a centralized approach to dealing with cyberattacks from foreign entities. Responding to these threats will likely require additional efforts from authorities and regulators.

4. Colombia maintains a passive posture regarding the possible technological dependence created by international actors and their influence on decision-makers. Procedures to screen, analyze, and limit exposure to malicious international actors by considering security or national interests seem absent in the technological sector, among other critical infrastructure. This situation could make it more challenging for authorities to address security concerns, specifically privacy challenges, alleged “back doors,” and digital lock-in. Furthermore, there are few regulations or disclosure requirements on foreign lobbying at the congressional level, which will likely affect the integrity of discussions on the issue.

Colombia does not have a sophisticated or clear strategy to address China’s growing economic influence, and the Petro administration’s international agenda is likely to prioritize domestic political considerations over geostrategic goals as it seeks additional investment from Chinese contractors. Lawmakers in Colombia should focus on addressing the country’s digital vulnerabilities, strengthening the integrity of decision-making, and reducing technological dependence on a handful of suppliers while bridging the country’s digital divide. As the Petro administration seeks to reap the benefits of additional Chinese investment in the technology sector, it should also prepare to understand, analyze, and mitigate potential risks. We doubt they have this in mind.

Picture credits: Alcaldía de Bogotá