Hu visit marks China’s growing interest in Latin America
Written by Meenaa on Monday, November 17th, 2008
Hu visit marks China’s growing interest in Latin America
Sunday, 16 November 2008
Chinese President Hu Jintao begins a Latin America tour tomorrow, taking in Costa Rica, Cuba and Peru, as China tightens economic ties and the region hopes for help in tougher times.
The Asian giant has increased diplomacy and investment in Latin America in recent years, with an eye on its natural resources and developing markets for manufactured goods and even arms.
Many in Latin America hope for an investment boost to help ride out the economic crisis.
Exports from the continent to China include soya and iron ore from Brazil, soya from Argentina, copper from Chile, tin from Bolivia, and oil from Venezuela.
The trade is still only a small percent of the continent’s total, but it is growing.
China’s state-run Xinhua news agency reported this month that exports to Latin America grew 52 percent in the first nine months of 2008 to 111.5 billion dollars.
Hu will visit San Jose and Havana between a G-20 meeting on the global crisis in Washington on November 15 and an Asian Pacific Economic Cooperation forum summit in Peru on November 22.
China and Cuba have remained all-weather friends for decades, their Marxist Socialist past a driving force in relations.
The Chinese leader visited Cuba four years ago to sign bilateral deals, and China was Cuba’s second business partner, after Venezuela, in 2007.
Hu’s visit to Costa Rica, meanwhile, is the highest-level visit by a Chinese official to the first Central American country to break off Taiwan ties in favor of China, in June last year.
Taiwan is now left with only a small circle of 23 international supporters, most of them tiny, poor nations, while Beijing commands the support of 171 nations.
“It’s more than just symbolic that Hu Jintao has decided to come, because it is clearly making the point that it is no longer a Taiwanese stronghold,” said Costa Rican analyst Luis Guillermo Solis.
Both Taiwan and China have been accused of using so-called “dollar diplomacy” to get nations to ally with them.
But China’s economic might is hard to compete with, especially in tough economic times.
Part of China’s incentives to Costa Rica came from China’s enormous foreign exchange reserves with an offer to buy 300 million dollars in bonds.
Many wonder if Costa Rica’s neighbors will be tempted to follow its move.
“I can’t see any changes in recognition back from China to Taiwan. Basically it’s been bit by bit, countries going from Taiwan to China,” said Kerry Brown, a senior fellow at Chatham House thinktank in London.
Costa Rica, a major exporter of computer components, is now prepared to negotiate a free trade deal with China, the foreign trade minister said here this week, dismissing fears of an invasion of Chinese products into the tiny Costa Rican market.
China has expanded its high level missions to the whole continent in recent years, making investments and agreements with such oil producers as Venezuela, Ecuador, Colombia, Argentina, Brazil and Mexico.
“The fact is that China has been locked out of a lot of countries for energy deals” in the past, Brown said. “It’s going to be going into these areas more and more.”
China has also advanced to economic assistance and direct investment, sometimes taking over from the region’s main commercial partner and neighbor, the United States.
The teaching of Chinese in schools and universities and scholarships to China, as in Costa Rica’s deal, add to a charm offensive.
And although Latin American economies are in a stronger position to withstand financial setbacks than in the past, a strong economic partner such as China is more attractive than ever.
Macau Daily Times
