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Thursday, July 9, 2009

China and the U.S. as trade partner for Latin America

More good news about China.

From the article:
All but invisible in Latin America a decade ago, China now is building cars in Uruguay, donating a soccer stadium to Costa Rica and lending $10 billion to Brazil's biggest oil company.

It's supplanted the United States to become the biggest trading partner with Brazil, South America's biggest economy.

China has moved aggressively to fill a vacuum left by the United States in recent years, as the U.S. focused on wars in Afghanistan and Iraq and the global economic crisis sapped its economy.

"China is rising while the U.S. is declining in Latin America," Riordan Roett, a professor of international relations at Johns Hopkins University, said by telephone while visiting Sao Paulo. "China is all over this region. They are following a state-driven policy to expand their peaceful presence."

The article talks about a woman that opened a school in Brazil in 2004 teaching Chinese and today has 300 students including executives from the countries biggest oil company and biggest mineral producer.

More from the article:

China has forged a strategic alliance with Brazil that's allowed the two countries to partner with India and Russia in the so-called BRIC grouping, which is demanding a greater voice in global political and economic affairs. Indeed, China is making inroads with developing countries worldwide.

Beijing's main interest in Latin America has been guaranteeing access to the region's raw materials — principally oil, iron ore, soybeans and copper — to fuel its continued rapid growth.

No doubt the alliance between China, Russia, and Brazil makes an easy source for the military weapons that the drug cartels in Mexico use. Oh, wait, I forgot that all those RPGs and full auto AKs come from Walmart stores in Texas.

This is a familiar refrain:

For many countries, there's a downside in the China trade, through which cheap imports have displaced local textiles.

Soon, China will run all of their manufacturing out of business as well. Sort of like when Walmart and AutoZone move into a small town. They have lower prices on the most popular items and drive the old small town hardware and auto parts stores out of business.

Here is an interesting point:

China's growing role has alarmed policymakers in Washington. However, China has been careful not to establish a military presence in the region, since doing so would antagonize Washington.

If the countries are in China's back pocket economically then China doesn't really need a military presence.

The article does say that overall Latin American trade with the U.S. is much greater than with China, but I'll bet a lot of the products we send to Latin America were made in China.

Then there is banking.

Beyond trade, China suddenly is rivaling the World Bank and the Inter-American Development Bank as a major lender to Latin America, at a time when China is flush with cash and many companies can't get access to bank loans.

Petrobras is borrowing $10 billion from China, to be paid off by shipping 150,000 barrels of crude per day to China this year and 200,000 barrels per day for the next nine years, said Erico Monte, a Petrobras spokesman.

Ecuador is borrowing $1 billion from China to finance investments by its state oil company and another $1.7 billion to build what would be the country's largest hydropower dam.

Venezuela is buying high-tech oil-drilling platforms from China and is sending some 380,000 barrels of oil there per day as Chavez diversifies Venezuelan exports away from the United States, his chief nemesis.

China loans them money and is paid with oil. Sweet deal.

Here is another aspect:

Dan Erikson, a Latin American expert at the Inter-American Dialogue, a nonpartisan research center on Western Hemisphere affairs said China was especially attractive to Latin American leaders because of its no-questions-asked foreign policy.

"The United States talks about the need for a battle against corruption, the need for transparency and improved human rights," Erikson told McClatchy. "China is less ideological in its approach to Latin America than the U.S. is."

I'm not sure if we're talking about exploiting workers in Latin America or China. I would guess both.

Now we get down to the heart of the matter:

Still, China uses its aid as a strategic tool to get countries to shift their diplomatic ties from Taiwan to the communist nation.

You mean economic aid can be used to change a countries foreign policy? Who could have known?

This is just more bad news for us. The only good I can see is that if these countries are more stable and prosperous economically then maybe the number of illegals in the U.S. will decrease. The United States government isn't interested in doing anything about it.

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