The U.S. are traditionally Latin America’s main trading partner, but since their economical agreements come along with their insistence on imposing the conventions of open markets and Western style democracy, the countries of Central and South America are increasingly tempted to do business with China, who offers cash while making no such demands.
With important primary resources like oil and soybeans and with an acute need for capital, the Latin American countries seem to be the perfect trade partner for China. Not only have Chinese investments in Latin America risen by 71% within the last year, but, according to President’s Xi Jinping declarations, China’s plan is to double its trade volume with this region over the next decade, in order to reach a figure of $250 billion. Even though U. S. remains the main trade partner for most of the Latin American countries, four of them (Brazil, Argentina, Peru and Venezuela) are already trading more with China. Furthermore, the loans that China has granted the Central and South American countries (going up to $22 billion last year) are larger, according to Inter-American Dialogue expert Margaret Myers, than the sum which both the World Bank and the Inter-American Development Bank put together have lent to these countries in the same interval.
Meanwhile, North-American interest in the countries of Latin America is slowly decreasing – direct investments from U. S. firms in the region have diminished by around 20% in the past three years (as Commerce Department data reveals).
Signs of the Chinese-Latin American friendship are beginning to show not only when it comes to economy, but when it comes to politics as well – the last important meeting of CELAC (the Community of Latin American and Caribbean States, an alliance formed in 2010 which excludes Canada and the U.S.) was held not in Washington, but in Beijing, where the connections between China and the South American region was discussed.
While it is true that both economies (Chinese and Latin America) are beginning to slow down, the potential of a long-term partnership is still a good prospect for both, and a warning sign for the United States’ play for power in the Pacific region.
image source: CNN Money