China in the World

 China in South and Central America

Chinese interests have focused on Latin America only recently, and while the United States is still the leading partner in trade with most of the countries to its south, China is certainly aiming to challenge that position. A landmark visit in 2004 by President Hu Jintao to Brazil, Argentina, Venezuela, and Cuba, as well as his promises of up to US$100 billion (€74.4 billion) and $20 billion (€14.8 billion) in investment to Brazil and Argentina respectively, demonstrate how serious China’s goals in the region are.

Although much of Hu’s words concerned future investment, Chinese economic activity in South American until recently was primarily based on trade. In fact, trade between the two jumped from “US$200 million in 1975 to US$40 billion in 2004.”Goods are flowing in so quickly that many in Mexico are concerned about the rapid exit of low-wage industries to China. For example, China’s rapid growth in chili production has worried Octavio Pozo, spokesman for Mexico's National Council of Chili Producers.

Chinese companies have been wary of actually investing in South America, though, whose customs and business practices are “foreign and culturally distinct to the Chinese,” instead preferring to put most of their money in nearby East Asia. However, the scarcity of resources that has plagued China for years has begun to bring investors to the region, whose primary exports are raw materials. When Hu visited Latin America, one of his main stops was Brazil, resulting in predictions of a future of incredible Sino-Brazilian cooperation and interaction. Indeed, 30% of Brazilian exports to China are soy products, of which Brazil is the second largest producer worldwide.

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More reports on South and Central America [coming soon]

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