Op-Ed Contributors

China is good news for Latin America

By Antonio Castillo (China Daily)
Updated: 2010-03-19 08:01

Editor’s note: China and Latin American countries, as brothers of third world in last century, will continue their friendship and cooperation to make their way to a refulgent future together.

The establishment of the Latin American and Caribbean Community (LACC) with 25 members in Mexico on Jan 23 is fresh indication that Latin America is continuing to move away from Washington, because the new organization excludes the United States. With Canada, too, excluded, the LACC is a regional body without "foreigners".

The steady erosion of US power in Latin America is in marked contrast to the increasing influence of China in the region. And China's influence is good news for the region. As former Brazilian prime minister Jos Dirceu says, China will be the determining factor for the development of Latin America.

Latin American leaders have had enough of US imperialism and the condescending approach to the region. This feeling intensified with the realization that the 1990s Washington Consensus was no more than a self-serving US policy, profoundly ineffective in Latin America.

With the Washington Consensus dead and buried, "Beijing Consensus" has captured the imagination of a region desperate to find a trusted partner, and China has emerged as a trusted, moderate and pragmatic one.

In the span of just a few years, China has established diplomatic and economic relations with 21 of the 33 Latin American countries and become a welcome presence in the region. According to the US Pew Global Attitudes Project, China enjoys a positive image in Latin America.

China's diplomatic model, too, is good news for the region. The diplomatic model it prefers to develop - soft power, non-interference and multipolarity - has been praised in Latin American countries. This is a far cry from the traditional US model forced onto Latin America: military intervention, unipolarity and political interference.

China is good news on the economic front as well. It has established a genuine partnership with the region. This again is in sharp contrast with the US, which historically kept Latin America in a subservient position (Latin America was effectively the "backyard" of the US).

With China there is genuine complementarity and cooperation. Latin America has been able to canalize its natural resources toward a Chinese economy that seems insatiable. The region is today the most important source of petroleum, gas and other natural resources, which are crucial to China's energy viability.

In return - the Chinese appetite for the region's commodities has turned into a great financial source for Latin America. Nothing reflects this better than China's relentless investments in the region. Over the last two years, Latin America has been the beneficiary of 50 percent of the $50 billion Chinese overseas investment.

China is also good news as a source of the much needed development loans. This was especially important during the worst phase of the global economic crisis. China gave massive development loans to several Latin American countries that were facing weak economic growth, a fall in prices of commodities and restrictions in access to credits. Examples abound. About round $1.7 billion went to Venezuela.

These significant loans are not just good news, but also indicate China's deep and long-term commitment to Latin America. And if long-term investment and trading is any indication, China is ticking all the right boxes. Take for example the Chinese investment in the oil industry. It has rapidly expanded from Venezuela and Brazil to Bolivia, Paraguay, Colombia, Ecuador and Argentina in natural gas.

In terms of trade and cooperation, Brazil and Argentina are good examples of this new scenario. China has become Brazil's largest trading partner, overtaking the US. And Argentina, another powerhouse in the region, has benefited from China's investment that will allow this Andean country to pay for its imports.

The good news is also the Chinese model of strategic partnership and common development. This is clearly reflected in the technology transfer and integrated development approach taken by China in Latin America (and in other developing economies). China is keen to "teach" Latin Americans how to do things and improve technologies, especially in the area of natural resource exploration and exploitation - from Venezuela's oil technicians to Cuba's electrical white-collar workers.

Once again this is a model that Latin American countries were not used to. The US model was highly predatory. Washington went, exploited and left. In contrast, China stays and associates with local private and public enterprises in developing infrastructure and technological advancement.

This is the key point and perhaps the best news of all - China's model is not in search of a quick quid. It is a model that puts emphasis on building a solid technical foundation for economic growth. This is by all account a long-term commitment and partnership. This is precisely what Latin American leaders are seeking from China, a country that has, hopefully, become the new engine of the region's economic growth and wealth.

The author is a journalist and academic associated with the University of Sydney, Australia.

(China Daily 03/19/2010 page9)