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
Sources:
“U.S. no longer towers over Latin America”
The Christian Science Monitor, April 18, 2009
“Mexico could be door for Chinese investment in Latin America”
China Daily News, February 8, 2009
“China, Peru sign free trade agreement”
RTT News, April 28, 2009
“Viva la progress: China’s Latin links”
China Daily (Chinese gov’t-owned), April 8, 2009
Foreign Policy, April 22, 2009
“Venezuela-China accords to kick in next year”
Portorld.com, April 15, 2009
“Deals help China expand sway in Latin America”
New York Times, April 16, 2009
“China takes preventive steps against swine flu”
China View (Chinese gov’t-funded)