#China's interest in #LatinAmerica is mutually beneficial, but U.S.'s economic influence waning in what was once its "own backyard."

posted Feb 25, 2013, 5:01 AM by Peter Joseph Moons

"China in Latin America: hegemonic challenge?" - 
Isabel HiltonNorwegian Peacebuilding Resource Centre, 20 Feb 2013.

Comments by Peter Joseph Moons.

China's economic contacts in Latin America are growing extensively, including into countries where contracts and connections were minor, such as Nicaragua and Bolivia.  In this geographic area, like in Africa, China is making long-term contracts to extract vital natural resources for use in Chinese manufacturing plants, gain access to ports and transit terminals, and, where beneficial to Chinese businesses, is improving infrastructure.  A difference with Africa, though, is the higher economic status of Latin American countries, which makes the import of finished Chinese products to this region more favorable.

Then Chinese Vice-President Xi visited Chile in 2011.

Curiously, the US filled this role as a core country expropriating resources from peripheral countries, and returning consumer or production goods in trade.  Of course, the era of the Monroe Doctrine ended long ago, perhaps in the early 20th century.  For decades, markets in Latin America were open to trade with the then-Soviet Union, followed by the European Union, and, since the 1980's in strength, Asia.  Certainly, China is filling the role of resource-extractor and major trading partner once dominated by the US. 

A corollary to Chinese state-run and quasi-state business arrangements is the political clout China is gaining from its engagement in Latin America.  Each new business deal is touted with great optics in terms of a signing ceremony, media attention, and promotion of the economic benefits the Latin American state gains.  While Latin Americans may not be rushing to learn Mandarin at their local 'China Cultural Center' sponsored by the Chinese embassy in their country, they are enjoying the employment earned from resource extraction and the selling of (comparatively inexpensive) Chinese products in their local markets.  

For its part, the Chinese are playing the games of capitalism and public outreach well.  Economic activity between nations can breed political favoritism.  The US, and the European Union, should note this possible trend, which may affect their political designs at some future date.  The arenas where Latin American states may favor China over the US include the United Nations, climate talks, World Trade Organization discussions, and in regional political bodies such as the Organization of American States.

In summary, China's economic influence in Latin America is significant, and will result in political benefits for China, as well.