Monday, January 20, 2014

China’s Importance As a Trading Partner For Latin America

article from October 3, 2011
By Jamie Douglas

October 1, 2011, Chinese National Day, was respectfully observed by Latin American nations that have become dependent on China’s resource-hungry economy gobbling up thousands of tons of their exported foodstuff, minerals and energy resources.

From Mexico to Argentina, high officials of the region’s governments visited the Chinese diplomatic envoys in their countries to pay respect to the nation that has made them less dependent on the whims and winds of their northern neighbor, the USA.

Colombia offered up a “Discover China” event, intending to showcase the benefits brought by the ever-increasing trade between these two nations. With the Colombia-USA Free-Trade Agreement still in limbo because the US Congress, with its incredible inability to come to a consensus about anything, has not yet held a vote on this bilateral agreement, Colombia is smart to cultivate other options. Many see Colombia’s vote in the Security Council against Palestinian statehood as the result of strong-arming by US threats to continue to delay the ratification of this treaty, which will bring at least a billion-dollar windfall of US exports. But the benefits to Colombia’s economy are yet to be assessed.

Cuba, having been the first nation to officially recognize China 51 years ago, celebrated their bilateral bonds with exuberant newspaper and television propaganda from the Cuban government.

Uruguayan President José Mujica stated that China’s explosive growth over the last few years has been a blessing for the region, with China having made substantial investments in the small Eastern Republic of Uruguay, and there are more projects on the horizon.

The Dominican Republic, meanwhile, has expressed its gratitude for China’s generous donation of various forms of aid for reconstruction efforts, after several recent hurricanes have put great strains on this Caribbean nation’s ability to take care of its poorest citizens. Chinese workers are on the ground helping with very important efforts such as rebuilding water and electrical grids as well as aiding with reestablishing the all-important tourism sector.

Argentina’s Luis Susman, a spokesperson for the Foreign Affairs Ministry, has stated that both nations have been engaged in important efforts to increase trade between them. Recently, China’s state-owned agribusiness company, Beidahuang, signed an agreement to purchase almost 800,000 acres of land in Rio Negro, a deal that was initially kept secret from the people of the province, as there were sure to have been some serious favors passed to the officials making possible this dirty deal, which includes water and port rights. Juan Accantino, Rio Negro’s deputy secretary for agriculture, has repeatedly touted the benefits of this arrangement: “It makes great economic sense. We can foresee global shortages of land, water and energy, and our province can offer all three.” And once again the good people of Argentina got screwed by their corrupt leadership leaving off the end of the sentence, “...to the Chinese.”

Chile and Peru are also very grateful for the Chinese having become major investors in their countries’ mining industries. The recent 23% drop in value of copper will have severe impacts on the economies of both nations, with Chile’s currency already having suffered the worst loss in value since the Lehman Brothers collapse. The Chilean peso fell 11% during September and will probably fall more, since copper makes up more than half the country’s exports.

The huge buildup of trade between Latin America and China is evidenced in the fact that, between 2007 and 2010, the figure went from US$100 billion to $183 billion, with 2011 expected to exceed $200 billion.

Jamie Douglas
San Rafael, Mendoza
Where that Fine Malbec Wine is staring to grow!

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