Monday, January 30, 2012

Is China eating America's lunch in Latin America?

Long accustomed to its role as the dominant player in the Americas, the United States is now seeing that position eroded by the increasing footprint of China in the Americas.

Since then-President Jiang Zemin’s 13-day trip to Latin America in April 2001 and the subsequent visits of President Hu Jintao in 2004 and 2011, Chinese engagement with the region has exploded. Today, China is the top trade partner of Brazil and Chile and Peru, and the second trade partner of Argentina.

By the end of 2010, Chinese enterprises had invested almost $44 billion in the region, almost a quarter of which was invested in 2010 alone. That is a marked change from 2003, the year before Hu’s first visit, when China invested just $1 billion in all of Latin America.

This is consistent with broader Chinese strategy. As part of the dash for economic growth that the Chinese Communist Party believes will help to maintain its legitimacy, Beijing is on a global quest from Southeast Asia, to Africa, to Latin America and beyond to lock in the natural resources that are fueling growth. Read More