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China and Latin America: Shared Gains

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Latin American countries have come to matter for China more than ever. The countries that matter the least for China are Venezuela and Cuba. The best relations are with Brazil, argues Jorge L. Dominguez.

LATIN AMERICA’S international relations opened the twenty-first century under two exogenous shocks. The first was the growing distance between the region’s governments and the administration of U.S. President George W. Bush over many issues, interrupting an “era of good feeling” in inter-American relations that lasted from the late 1980s to the end of the 1990s. The second was the dramatic entrance of the People’s Republic of China as a significant economic and, in some instances, political partner. (...)

Some next steps are probable. China is likely to keep succeeding at weaning Latin American and Caribbean countries away from Taiwan. China and Mercosur are likely to continue to discuss, but not sign, a free trade agreement. China and Brazil will probably continue to collaborate with regard to the WTO Doha Round. China and Mexico will remain entangled in economic and verbal disputes. President Chávez will make every effort to engage China intensely with Venezuela. General Raúl Castro will, upon his brother’s passing, seek to build political support for his presidency as an avowed emulator of the “China model” of socialism, hoping for substantial Chinese support. China’s relations with its Latin American partners tilt toward open economies, even if the protectionist intent of the Venezuelan and Cuban governments is to reduce their international economic vulnerability.

In January 2006, between his election and his inauguration, Bolivia’s President Evo Morales visited Beijing, where he echoed Hugo Chávez’s approach. He encouraged Chinese investment in Bolivia’s energy sector and pronounced himself an “ideological ally” of China. Wearing his trademark pullover sweater, his visit underscored ease and almost instant familiarity with Chinese leaders. And yet, it is difficult to build a natural gas pipeline from Bolivia to Beijing, and the best route to export liquefied Bolivian natural gas remains through a Chilean port—the strategy that Morales opposed vigorously as an opposition leader. (...)

THE PRINCIPAL EXPLANATION for improved Sino-Latin American relations was the extraordinary growth of China’s international trade. Sino-Latin American trade improved as a function of that worldwide trend, not because China preferred to develop its Latin American relations. Nevertheless, aspects of Sino-Latin American relations have changed little: Latin American voting coincidence with China in the U.N. General Assembly remained fairly constant since the early 1990s. Sino- Latin American military relations improved only somewhat with Brazil and Argentina as indirect benefits from technological cooperation in nuclear energy and space satellite developments. Military relations improved as an effect of the general improvement of Sino- Latin American relations, not as their cause. (...)

There has been a wide multi-partisan crossideological support for relations with China in most Latin American countries. There has also been ample support in Latin American public opinion, Argentina and Mexico partially excepted, for China’s new role in world affairs. One reason for such broad-based domestic political backing in Latin America is that China kept and developed diplomatic and economic relations with South American military regimes in the 1970s, thereby liberating the Latin American military and right-wing political and social forces from their fear of China even before the Sino-Latin American trade boom in the 1990s. In the 1970s, China also developed its relations with civilian governments in Mexico and Venezuela.

Sino-Latin American relations have been pragmatic and non-ideological. Latin American countries followed policies toward China that transcend administrations or personalities, in nearly all instances warranting the judgment that their policies toward China are the policies of each state, not of transient leaders. The exceptions to these generalizations are the decisive role of ideology to explain the swings in Sino-Cuban relations, the lack of a “state policy” toward China in Venezuela prior to the Chávez presidency, and the Fox administration’s break with prior Mexican state policy toward China.

THERE IS ALSO variation in relations between Latin American countries and China. Some reasons are economic: how much does each Latin American country trade, which products can it supply China, and how open is each country’s trade regime? The more complex sources of variation are political. (...)

China itself employs verbal formulas to characterize the strategic value that it assigns to each country. Brazil ranks first. China explicitly ranks Cuba last, and Chile next to last. The ranking in strategic value generally matches the objective economic value of the bilateral relations, though on the economic dimension Chile’s worth to China rises at the relative expense of Argentina and Venezuela. The economies of China and the Latin American countries (...) are largely complementary. The main exception is between China and Mexico, whose economies are mostly competitive. The growth of Chinese imports in Argentina and Brazil has given rise to greater, though still limited, opposition to further expansion of trade with China.

There is not much overlap, however, between China’s assessments of the strategic value of Latin American countries and their objective economic worth, on the one hand, and the extent of political agreement between China and the Latin American governments. Mexico matters greatly to China but its political relations are the worst among those countries that recognize the People’s Republic. Hugo Chávez’s courtship of China is disproportionate to the objective lesser economic significance of current Sino- Venezuelan relations. Cuba’s matters little to China in economic terms even if its political relations with China have become appreciably closer in recent years.

SEVERAL LATIN AMERICAN governments want China to “balance” U.S. influence in the region, but they differ in their expectations. Brazil and Argentina hope that China will be a “soft balancer” of the United States in Latin America. This is evident for Brazil in the context of the Group of 20’s negotiations regarding the WTO Doha Round. In effect, Brazil and Argentina want China to provide new political-economic options, without expecting it to confront the United States. Cuba and Venezuela eagerly search for a political alliance with China to provide a “hard balance” to U.S. power. Cuba and Venezuela are confronting the U.S. government on their own and look for support wherever it can be found. In contrast, neither Chile nor Mexico looks to relations with China as a means to balance U.S. influence.

Latin American voting agreement with China in the U.N. General Assembly seems independent of other variables. Only Cuba adjusted its voting behavior in the early 1990s to correspond to its new closer alignment with China. Mexico votes with China more often than not, even though it fears China’s trade clout. Venezuela votes with China only slightly less often than Mexico, but it adopted that profile well before Chávez’s presidency and has not adjusted its voting behavior under Chávez’s rule. Brazil, Chile, and Argentina disagree slightly with China in their voting behavior and have not adjusted these patterns to reflect the improvement of their relations with China in the current decade.

The military value of China’s relations with Latin America is extremely modest outside of indirect benefits from high-technology ventures in Brazil and Argentina.

LATIN AMERICAN GOVERNMENTS vary in the extent of their professionalism in the design and implementation of their policies toward China. Brazil, Chile, and Cuba have been professional. Argentina, Mexico, and Venezuela have not. The latter three suffer from excessive personalism in policy design and decision making, as well as faulty execution.

In sum, Latin American countries have come to matter for China more than ever, though still modestly so by worldwide standards. China has come to matter significantly for these Latin American countries. The countries that matter the least for China are those whose overriding motivations in their policy toward China are political: Venezuela and Cuba. The best relations are with Brazil, which combines high economic salience, strategic political design, and professional policy formulation and execution. The twenty-first century may or may not be the “China century” in Latin America but this first decade of the century surely is the “China decade.”

Jorge L. Dominguez is the Clarence Dillon Professor of International Affairs, director of the Weatherhead Center for International Affairs, and chairman of The Harvard Academy for International and Area Studies at Harvard University.This column is based on an excerpt from China’s Relations With Latin America: Shared Gains, Asymmetric Hopes, a detailed report from the Inter-American Dialogue. Reprinted with permission from the Inter-American Dialogue.

Originally published May 30, 2006

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