Latin America Divided Over Ties with China

Latin America Divided Over Ties with China

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“We do not want to be China’s next Africa,” Neil Dávila, head of ProMéxico, Mexico’s federal agency to promote foreign commerce and investments, is quoted as saying in a diplomatic cable released by the whistleblower website Wikileaks. “We [Mexicans] need to be owners of our own development.”

His comments reflect a growing trepidation across Latin America in response to the rapid ascendance of Chinese investments throughout the region, as nations from Mexico to Brazil to Chile express concern about Chinese motives in the southern hemisphere – motives that, in the opinion of many people in Latin America, have been damaging to Africa in its business dealings with China.

“Colombia is wary of China’s motives and its lax labor and environmental standards,” Alejandro Ossa, Colombia’s commercial attaché in Beijing, is quoted as saying in another cable dated March 30. “China’s interest is motivated by a desire to expand its influence [in the region],” he adds, before taking a swipe at Venezuela’s Hugo Chavez -- who has unstintingly embraced Beijing’s overtures – noting that Colombia “is unwilling to be trampled by China, like Africa and Venezuela.”

Such sentiments -- the latest in a series of revelations to come out of the leaked cables -- mark an abrupt contrast to the lavish reception Chinese delegations have recently enjoyed in Latin America. As the United States has grown increasingly obsessed with Iraq and Afghanistan, nation after nation in Latin America has begun to feel neglected by Washington. China, aware of the gap, has quickly moved in to fill the vacuum, offering aid, making investments and entering into ambitious commercial deals with countries in the region. “Relations between the U.S. and Latin America had been ignored by the Bush administration and China sought to fill that void,” Daniella Menezes, first secretary of Brazil’s embassy in China, told American diplomats in a cable.

Chinese officials are fuming at the growing suspicions, seeing them as part of a larger strategy on the part of American diplomats to sow mistrust. When Chinese Vice-President Xi Jinping – current President Hu Jintao’s likely successor -- arrived in Mexico in February 2009 as part of a 15-day diplomatic mission that included Jamaica, Colombia, Venezuela and Brazil, he alluded to American attempts to undermine Chinese diplomacy in the region. “There are well-fed foreigners who have nothing to do,” Xi said during a lunch meeting, referencing American diplomats in Latin America “who point a finger at China and make unnecessary accusations.”

Xi then added a comment that reverberated throughout Latin America: “China does not export revolution. China exports neither hunger nor poverty. We do not cause problems. What more can be said of us?” With that, China hoped to continue its commercial expansion throughout the region. In fact, China has emerged as the largest market for raw materials from Chile, Peru, and Argentina, according to World Bank figures, and China today represents 10 percent of all sales from Latin America to the outside world, up from a mere 0.8 percent as recently as 1990.

The apex in China-Latin American relations came during the 2008 Summer Olympic Games in Beijing, when nothing but superlatives were used in Latin American media to describe all things Chinese. In addition to the compliments, there was a daunting spike in exports, and travel between the two regions jumped dramatically, with Aeromexico launching direct service between Mexico City and Shanghai.

Last year’s World’s Fair in Shanghai and a badly bruised U.S. economy generated further momentum in relations, with Mexican business executives eager to expand ties with the rising East Asian superpower. Beijing, meanwhile, financed the expansion of Mandarin Chinese schools, known as Confucius Institutes, in Mexico City and Monterrey.

But, while seemingly benign, as recently as 2005, Mexico’s Congress began to express concern about a growing imbalance in China-Mexico trade. A Congressional report dated that same year on “recent economic developments” between Mexico City and Beijing offers a “series of reflections on the unequal relations between both countries.” Half a decade later, commerce between Mexico and China remains a one-way affair: Mexico exports raw materials to the Chinese, primarily oil, while China has shown only polite interest in other Mexican products.

Colombia is very mistrustful as well. "Do you believe them?" says one of the official communiques from the Colombian Embassy in Beijing. Brazil is also leery, fearing that the only "interest" that China expresses in Brazil is to secure natural resources: Beijing has so far failed to reciprocate on Brazilian wishes for help on its science and technology aspirations. Chile, too, has started to show concern. It has buyer’s remorse of a kind, wondering why so much of its natural copper and nickel has been signed away to China. Only Argentina, ever cash-strapped, is enthusiastically courting Beijing.

Indeed, while Mexico’s growing disillusionment with China is shared with Colombia, Brazil, and Chile, it does not resonate in Argentina, Venezuela or Peru. Venezuela and Argentina remain convinced that they must end their dependence on the United States, and it is China that offers the greatest opportunity for growth in their respective export markets. Other leaked diplomatic cables show Argentine officials wondering why China is not more aggressive in investing in Argentina, while Venezuelan officials are seen maneuvering to leverage relations with Beijing as part of Chavez’s rhetoric against the United States.

The divisions in Latin American attitudes toward Chinese business have been noticed worldwide. Writing for Spain’s “El Pais," columnist Oscar Gutierrez notes the growing “mistrust generated by Chinese expansionism in Latin America” and how worrisome it is becoming for Latin American leaders, who remain divided on the growing Chinese presence.

Politics aside, in practical terms, there are those who point out that it is precisely Latin America’s relations with China that allowed the region to weather the current global recession with remarkable resilience. Erik Bethel, head of the investment bank SinoLatin Capital, argues that Chinese-Latin American trade has benefited consumers throughout Latin America by creating jobs and keeping inflation in the region at bay.

That may not be enough, however. As economic signs of recovery around the world accumulate, many in Latin America are wondering what comes next from a China that claims it doesn’t export revolution, but whose presence in Latin America seems to be expanding significantly, and going beyond just business. There's a growing consensus that Latin American embassies in Beijing need to cooperate to have a united policy in order to avoid being divided and conquered by China. The indications are already there that a great wall of wariness is rising between China and Latin America.