A sharp, geoeconomic shift took place last month in Santiago, Chile at the second ministerial meeting of a forum grouping China and the 33-member Community of Latin American and Caribbean States.
The Chinese Foreign Minister, Wang Yi, told his audience that the world’s second-largest economy and Latin America should join efforts to support free trade. This was about “opposing protectionism” and “working for an open world economy,” he said.
After encouraging Latin American and Caribbean nations to participate in a major November expo in China, Wang delivered the clincher – Latin America should play a “meaningful” role in the ‘New Silk Roads’, known as the Belt and Road Initiative. The Chinese media duly highlighted the invitation.
The Latin American stretch of the Belt and Road project may not turn out to be as ambitious as the Eurasia program. Yet the trend is now clear with Beijing turbo-charging its infrastructure connectivity drive across the region and the Caribbean, with more deals on the way.
The strategic imperative is to build smooth connections across the continent, converging on its Pacific coastline – and forward through maritime supply lines to the Chinese seaboard. You could call it the Pacific Maritime Silk Road.
Last year, Chinese banks and institutions invested US$23 billion in Latin America – the biggest surge since 2010. And they are all in for the long haul.
Predictably, fellow BRICS member Brazil is the largest recipient of Chinese foreign investment for the past 10 years at about $46.1 billion, plus more than $10 billion in acquisitions. Russia, Indian and South Africa are the other nations that make up the BRICS bloc.
Costs plummeted
Marcos Troyjo, the director of the BricLab at Columbia University, has broken down the numbers. Up to mid-2010, Brazil was very expensive. Then suddenly costs plummeted because of the exchange rate or devaluation of companies.
Large Brazilian groups were badly damaged by the incredibly complex ‘Operation Car Wash’ corruption investigation. The infrastructure industry depended on state funds, which suddenly dried up and a wild privatization spree followed with Chinese, American and European groups taking advantage.
China is already the top trading partner of Brazil, Argentina, Chile and Peru. Others will inevitably follow. This is not only because China’s imports of commodities, such as iron ore, soy and corn tend to rise, but also because the Asia Infrastructure Investment Bank will increase lending.
China’s master plan for Latin American trade and investment follows what is dubbed the “1+3+6” framework, mapped out by President Xi Jinping in July 2014 at a summit in Brasilia. The “1” refers to the cooperation plan itself, guiding specific projects and ranging from 2015 to 2019 as Beijing aims for $250 billion in direct investment and around $500 billion in trade.
The “3” is about the key areas of cooperation – trade, investment and finance. And the “6” prioritizes cooperation in energy and resources, and infrastructure construction, as well as agriculture, manufacturing, scientific and technological innovation, alongside information technology.
The top three Latin American powers, Brazil, Argentina and Mexico, who also happen to be G20 members, are all into major infrastructure expansion, which fits into Beijing’s plan.
Of course, there will be serious snags along the way, such as the $50 billion Nicaragua Inter-Oceanic Canal, now competing with a surge in Panama-China relations after the country broke ties with Taiwan. And the game-changing, transcontinental, Atlantic-Pacific railway between Brazil and Peru is also a long way away.
But Foreign Minister Wang was been careful to explain how this proposed Latin Belt and Road program will benefit the Latin American region. “It has nothing to do with geopolitical competition,” he said. “It follows the principle of achieving shared growth through discussion and collaboration. It is nothing like a zero-sum game.”
In the end, China’s geopolitical rewards will end up positively riling the Trump administration, which has taken its eye off the ball in its own backyard. Rex Tillerson, the Secretary of State, decided to hit the road a few days after the China-Latin America summit in Santiago with pit stops in Mexico, Argentina, Peru, Colombia, and Jamaica.
He underlined the Monroe Doctrine a cornerstone of US policy in the region. “[It] clearly has been a success, because … what binds us together in this hemisphere are shared democratic values.”
‘Imperial powers’
Tillerson then bashed China, saying Latin America “does not need new imperial powers.” The Global Times stressed how Tillerson “showed disdain” to China’s “constructive approach.” “China has no military bases in the region and has dispatched no troops to any of the Latin American countries,” it said.
Tillerson most of all bashed Venezuela. He suggested sanctions aimed at “the regime” and not “the Venezuela people,” and claimed that President Nicolas Maduro could face a military coup even though Washington was not gunning for a regime change.
In fact, doubts persist on whether President Donald Trump will even show up at the next Summit of the Americas in April in Peru. The contrast is stark with President Xi, who has visited three times since 2012.
Still, a rash of academic papers has shown how Brazil and Argentina have reoriented their foreign policy from a “pro-South” stance towards a pro-US neoliberal view. Yet, China keeps advancing – geoeconomically and geopolitically.
And that appears to be a trend. Washington will need to invest in a much more sophisticated game if it is to compete economically against China. That would turn out to be the ideal trade and investment scenario which would profit Latin America the most.
Public opinion seems to have made up its mind. Across Latin America, according to a Gallup poll, approval of US foreign policy has dropped from 49% in 2016 to 24% last year. Approval of President Trump stands at a dismal 16%.
In sharp contrast, China’s investment through the Belt and Road Initiative has given President Xi a distinct advantage.
Make trade and commerce NOT WAR! War is destruction and making eternal enemies. It is a zero sum game! Trade and commerce are about production and peace. The sum is greater than the total of all the individual components. Monroe Doctrine! Do not be fooled! It is more like a Doctrine of beggar your South American neighbours. You can cheat someone all the time, all the people some of the time but all the people all of the time? Mr Tillerson, do you think we are morons?
The deal is to the Chinese, it does not matter who the American President is———that really is not important to the Chinese brain trust that has wrapped Global trade and the new Silk Roads as a way to drag the whole world forward. It was a genius move by the Chinese that has become the manufacturing, engineering, and soon high tech leader of the world. This is very "BULLISH" for the world for the next 20 years and in the end America and its allies Great Britain, and Japan will follow————–are be left behind———–this is the Century of Pacific Rim Asia and I for one am very excited about a world that will turn its back on foolish conflict and instead will make business————-the Middle Kingdom continues to march forward———-and I want to wish Happy New Year to all that follow the lunar New Year!!!
Hasta que los leones tengan sus propios historiadores, las historias de caceria seguiran glorificando al cazador
Don’t miss the link to Tillerson’s speech in Austin. Unbelievably, considering US support for fascism in the South, he speaks of shared "values", which is true if he is referring to the oligarchy now firmly entrenched in the saddle after the "pink tide" has been rolled back with strong US support for the oligarchs. His praise for the Monroe Doctrine will please nobody in the South except the oligarchs, who always appreciate US support for coups to protect their power.
The article does not mention Venezuela the nation who has the world’s largest supply of conventional oil. Venezuela’s oil reserves are larger than Saudi Arabia and yet her economy is crashing in a manner similar to the Wheimar Republic of Germany back in the 1930’s.
The reasons are fairly straightforward. Since Hugo Chavez was elected President of Venezuela in 1998 relations between Israel and Venezuela rapidly deteriorated as Venezuela strongly supports the rights of Palestine. In 2006 and 2009 Venezuela expelled the Israeli Ambassador. It was and is that bad. It gets worse.
Venezuela officially recognized the State of Palestine and established diplomatic relations with the Palestinian Authority on 27 April 2009. During a visit to both Russia and China in 2006 Chavez called for Israeli leaders to be tried in the International Criminal Court. Chávez’s speeches and verbal attacks against Israel had earned him praise throughout the entire Arab World
Since then Venezuela has strengthened its ties with Russia, China, Cuba and Iran in order to counter the support that Israel receives from the United States. When Trump recognized Jerusalem as the capital of Israel, President Nicolas Maduro condemned the arbitrary decision made by the US to recognize Jerusalem as Israel’s capital and move the US embassy to Jerusalem.
The response against Venezuela has been two fold. Saudi Arabia increased production even when it cost her to do so. This was done when US shale oil production brought down crude from 115 dollars a barrel to less than 50 dollars. Saudi production further lowered crude to less than 25 dollars a barrel.
In addition America slapped Venezuela with draconian sanctions, with the excuse being that the Maduro government is "too autocratic". Venezuela’s oil industry is owned by the government just as it is in Saudi Arabia. The result is the complete economic collapse of an oil rich nation. China’s silk road into Latin America will also be dealing with Israeli concerns expressed by America on Latin America.
pepe, suas posições pró china são meramente pro bono, por afinidade ideólogica com os comunas???
President Trump respresents a significant number of people in the US who totally lack historical perspective and who believe that ‘American’ is composed only by the US. The entire Western Hemisphere represents a civilization of people mixed together. China understands capitalism, expand & facilitate markets or perish. Maybe the US should try some constructive competition instead of diplomacy by drones.
When US start accusing others of emperialism, it becomes clear that desperate Washington has ran out of ideas.
Chinese "trade" is cronied up and manipulative. Their preference is to trade advantageously in nations more backward and corrupt than themselves… biding their time with regard to developing first world trade relations. America since Nixon has been generous and more than fair with China… To little avail, probably to the great surprise of China, and at great cost to America. No more. China has some very tough choices to make. Doors are still open but many have closed already.
americas back yard – yes thats quite right and america has no respect for and treated the many south american countries and ppl like weeds and pests.
what has america, with it imperialistic agenda, got to offer besides more regime change, economic ruins and human miseries ???
Yashad, this is not Mussolini but a Latin American view, as against old and modern colonialism: " Until the lions will have their own historians, the narrative about hunting will keep glorifying the hunters "
Pero Luca; los leones SON cazadores.
Si James ( Jaime ) Greaves, pero es que cazan para comer y no para vender armas y propagar destruccion..
I think a very important factor is human factor: South Americans have a very positive attitude, friendly, and happy. Meanwhile Americans are becoming more and more arrogant and paranoid.
A billion aspiring consumers in Afraica, 650 millions in Latin America, 500 millions in central Asia/Eurasia. Why wouldn’t China develop trade and markets with these rising economies than trying to fend off Western trade war threats? Let Trump and company deliver on their threat. Chinese factory workers will keep busy producing high quality inexpensive consumer products to appreciative developing countries’. Hell with Costco, Walmart, Bed Bath and Beyond.
Oh, leave India alone too. They are too busy latching onto a western fantasy to appreciate what China has to offer.
Most people in the USA no longer believe the fraud Mainstream US news or the polls. Polls asside, China wins hands down using advanced strategic plainning for their belt and Road global initiative. They are designed to foster human economic development while the US Zionist plan has shown to cause human destruction. Dr. Ronald Cutburth, engineering scientist, intelligence expert.
(Tillerson) "He underlined the Monroe Doctrine a cornerstone of US policy in the region. “[It] clearly has been a success, because … what binds us together in this hemisphere are shared democratic values.”
What a lying pack of s***. If that’s the best reason for Latin America to remain in the US orbit, then the American propoganda machine is completely blinded by its own making.
I happen to live in Tillerson’s nation. There are unmistakable signs everywhere of disease and destruction going on everywhere. We have millions unemployed, millions more with part-time, poor wage jobs. The huge Millennial population isn’t going anywhere with these jobs, and with astronomical college costs. Add to that and you have a cutthroat health care system so defunct by corporate greed, few could possibly become healthy with moderate to serious health conditions.
I hate what has happened to this country. It’s owned, lock/stock and barrel by corporate sharks, oligarchs, and predatory banks. It’s only a matter of time before it implodes.