Beijing's huge investments present the U.S. with a challenge, and an opportunity.
HUGO RESTALL
Americans tend to see China's economic rise through the prism of the bilateral trade deficit and competition for manufacturing jobs. But the real story is that Chinese institutions are buying equity stakes and making loans to increase their influence in natural resources. And Latin America is the most important arena for China's investments.
Some observers portray this as a threat in the U.S. "backyard." The truth is that the developing trade between China and Latin American countries represents an opportunity—if the U.S. plays its cards right.
There are several reasons to be relatively sanguine about China's increasing involvement in Latin America. Most obviously, the Chinese interest in the region is pragmatic rather than ideological. The goal is to further economic growth at home by opening new markets and guaranteeing a supply of necessary inputs.
Rocking the boat politically is not on the agenda. Even where Beijing is engaging America's foes, like Venezuela's President Hugo Chávez, it is careful not to offer encouragement for their destabilizing activities.
Still, part of the attraction of Chinese money is that it comes with few strings attached. That naturally tends to undermine the leverage the U.S. has enjoyed as the region's biggest trading partner and investor. China's arrival, coinciding with the rise of Mr. Chávez and Bolivian President Evo Morales, makes it more difficult to contain the damage from these populist left-wing governments.
Yet the reality is that the U.S. still has plenty of leverage—for now. China still only accounts for less than 10% of the region's trade. Chinese trade and investment garners more of the attention because that's where the growth is.
Brazil’s President Lula da Silva (left) toasts China’s President Hu Jintao in Beijing, where the two countries signed 13 cooperative economic agreements in May.
No comments:
Post a Comment