China’s search for natural resources is taking it to Latin America, and bringing considerable economic clout at a time when U.S. trade with the region is steadily declining.
In Peru, China has locked in control of copper production with its multibillion-dollar purchase of a mountain that holds most of Peru’s copper reserves, according to the Christian Science Monitor.
Venezuela, meanwhile, has sealed a new agreement that will increase crude oil exports to China to one million barrels daily by 2012, reports Portworld.com. Other Chinese investments in Latin America include $1 billion for a hydroelectric plant in Ecuador and a $10 billion loan to Brazil’s national oil company, The New York Times reports.
China is now Latin America’s second largest trading partner, with trade increasing by almost 40 percent in 2008, up to $140 billion, according to China Daily, while a Foreign Policy magazine essay states that China is signing currency swap agreements worth more than $100 billion. These agreements will replace the dollar with the yuan as the currency of choice for many of its trading partners, including Argentina, Malaysia and others.
Meanwhile, in February, U.S. trade with Latin America dropped by nearly 30 percent to $35.3 billion compared to February 2008, reports Latin America Business.
In April, China signed a free trade agreement with Peru — its second in Latin America, following its 2005 agreement with Chile.
But the economic strings also have their entanglements. Mexico, which has considered itself a door to Latin America trade with China, is now taking a hit in the wake of the swine flu outbreak, after China banned all Mexican and U.S. pork products, reports Chinese state media.
— Ronnie Lovler/Newsdesk.org
The Christian Science Monitor, April 18, 2009
China Daily News, February 8, 2009
RTT News, April 28, 2009
China Daily (Chinese gov’t-owned), April 8, 2009
Foreign Policy, April 22, 2009
Portorld.com, April 15, 2009
New York Times, April 16, 2009
China View (Chinese gov’t-funded)