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| May 12, 2001 | atimes.com | ||
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China
China struggles for leverage in Latin America STRATFOR.COM's Global Intelligence Update May 11, 2001 Summary China's efforts to expand its influence in Latin America can barely be described as a strategy. Its efforts to nurture new security and trade alliances have been an inch deep and a mile wide. Unless it backs up its rhetoric with hard cash and can offer the region the same or more than the United States, Europe and others, it will gain only a marginal influence in Latin America. Analysis As part of a strategy to increase China's involvement in regional security and trade circles, President Jiang Zemin paid official visits to several Latin American nations in April, including Cuba, Argentina, Uruguay, Brazil and Venezuela. But while senior Chinese officials have made several visits to Latin America in recent years, pledging enhanced cooperation, Beijing now is attempting to accomplish its goals without spending much. Compared to other regional players, China is making only limited investments. Until it significantly increases its financial commitments to the region, Beijing will remain a minor player behind the United States, the European Union and others. And until it puts its money where its mouth is, the picture China is trying to paint of Beijing as a regional power will remain an illusion. Not surprisingly, Jiang focused his efforts on Cuba and Venezuela. Both countries - Cuba under Fidel Castro and Venezuela under Hugo Chavez - have resisted American dominance and are areas Beijing views as its best hope for getting a foothold in America's backyard. But on both the security and trade fronts, China appears to be all talk and no action. For example, Chinese National Defense Minister Chi Haotian visited Havana in 1999 to begin negotiations over the construction of a Chinese spy base at Lourdes, adjacent to a Russian base that operated throughout the Cold War. Officials also discussed plans to modernize China's satellite-tracking base at Jaruco and a telecommunications-monitoring facility located in the Havana neighborhood of El Vedado. But Beijing has not provided the funding to build spy facilities that would be just 90 miles from American shores. It also has not moved to upgrade Cuba's intelligence-gathering apparatus. A separate military cooperation agreement with Cuba signed last year likewise has amounted to little. The same goes for the Panama Canal. While Hutchison-Whampoa, a shipping company affiliated with the People's Liberation Army, has 50-year leases on facilities at Cristobal and Balboa on both ends of the canal, concerns the Chinese military will turn the waterway into a strategic security asset appear unfounded. The Panama Canal is not what it used to be, at least to countries in the Western Hemisphere. It cannot handle US aircraft carriers, supertankers or other vessels over 100,000 tons. The 670,000 barrels per day of oil and oil products that transit the canal, assuming every drop went to the United States, would amount to only 6.9 percent of US crude imports and 3.6 percent of consumption. The canal now handles some 15 percent of goods entering or leaving the United States, including 40 percent of grain exports. Statistics from the Panama Canal's Web site point to substantially greater Asian dependence on the canal than US dependence. Atlantic-to-Pacific traffic through the canal in 1997 amounted to 74.2 million tons, while Pacific-to-Atlantic traffic amounted to 115.5 million tons. Without major improvements, the canal will become obsolete within a decade. Moreover, China's attempts to plant a larger economic and trade footprint in the region also appear half-hearted. Money invested thus far in nourishing more beneficial trade relationships has been miniscule. During his trip, Jiang pledged US$400 million in loans to Cuba. This is a mere fraction of the between $6 billion and $7 billion in direct cash subsidies the Soviet Union provided throughout the Cold War. In Venezuela, Jiang struck a $20 million energy deal. By comparison, Venezuela recently signed a five-year oil deal with Cuba for approximately $5 billion. China also has little to offer on trade. While commodities are its strength, high-tech exports - which the region most desperately seeks - are not. And, in some areas, Chinese commodities would directly compete with domestic production in many Latin American countries. Clearly, Beijing must expand exponentially what it can offer or it will never be able to compete with the United States, which accounts for half of all imports and exports in the region, the European Union's trade expansion or even Taiwan. Taiwan already has invested heavily in Paraguay, as well as in portions of Central America. China's strategy to expand its influence in Latin America barely can be described as a strategy. Its efforts to nurture new security and trade alliances have been an inch deep and a mile wide. Unless it back up its rhetoric with hard cash and can offer the region the same or more than the United States, Europe and others, it will gain only a marginal influence in Latin America. Copyright 2001 Strategic Forecasting, LLC. For republication policy contact: STRATFOR, Inc. 504 Lavaca, Suite 1100 Austin, TX 78701 Phone: 512-583-5000 Fax: 512-583-5025 Internet: http://www.stratfor.com/ Email: info@stratfor.com |
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