Thursday, 16 October 2008

Passive Domination - China in Latin America


Washington does not see Chinese economic penetration of Latin America as inherently antithetical to American interests, though there is now genuine concern over how the accelerating interactions might lead to military or strategic cooperation at a later stage.

The deployment of Chinese peacekeepers in Haiti—the first in the Western Hemisphere—has particularly inflamed these anxieties. Beijing has already attempted to sell arms to Venezuela. The Chinese government also reportedly conducts intelligence activities in Latin America through visitors, students, and front companies, and there are concerns about the PRC using Cuba as a listening post to monitor developments in the United States.

Given the rapid expansion of trade, commercial, and investment ties between the countries of the region and China, it is important to understand Beijing’s motivations. The Chinese regime is engaged in a prolonged commitment to Latin America. The principal and overriding goal is access to the rich reserves of foodstuffs, minerals, and energy resources. Differing to how the Europeans once traded, limiting commerce with other nations during the 18th and 19th century, the US General predicate of free-trade-open-to-all could now come to haunt them as the Chinese begin to beat them in their own game of import and export.

Latin America is clearly at a rush to build infrastructure to suit not only China but the whole of Asia – for the past ten years Asia’s growth has been growing at a steady 10% compared to Europe’s 3%. Similarly Latin Americans are told persuasively that Red China and other success stories such as Vietnam are the land of the triumphant peasant revolution.

Rivalry with Taiwan plays into China’s courting of Latin American countries, with its continuing political objective is to isolate the island. China actively will court those 12 countries in this Hemisphere that recognize Taiwan diplomatically. Against this backdrop, conservative voices in Washington argue that the United States has a vital interest in aiding Taiwan in maintaining its alliances in Central America and the Caribbean, if only to check the expansion of Beijing’s geopolitical reach.

Funny and interesting cases of China courting Latin American countries -

GRENADA - And though in 2003 Grenadian Prime Minister Keith Mitchell said that maintaining ties with Taiwan is “practical,” by 2005 he had changed his tune, signing a joint communiqué declaring support for the “One China” policy. In exchange for ending this 15-year relationship with Taiwan, Grenada received support from China for rebuilding and expanding its national stadium for the 2007 Cricket World Cup; the construction of 2,000 housing units; new hospital facilities; agricultural support; a $6 million grant to complete projects previously financed by Taiwan; and an additional $1 million scholarship fund. In February 2007, Grenada committed one of its most grievous errors in recent memory when officials accidentally played the Taiwanese national anthem at the inauguration of a new national stadium built by China at a cost of $40 million. Prime Minister Keith Mitchell watched in horror as the planned moment of triumph descended into an unmitigated diplomatic fiasco, and he quickly ordered an investigation into the matter, saying that “it has saddened and ached my heart.” Other Caribbean countries were both amused and troubled by the incident, which they viewed as a cautionary tale that reflected the region’s delicate balancing act.

HAITI - The PRC contributed 125 riot police to MINUSTAH, the Brazilian-led UN stabilization the fletcher forum of world affairs force deployed in Haiti, and then subsequently leveraged its permanent member status on the Security Council to prevent Taiwanese Premier Su Tseng-chang from attending the inauguration of Rene Préval in May 2006. Since MINUSTAH is currently the principal force preventing a complete disintegration of the security situation in Port-au-Prince, the Haitian government had no choice but to bend to Beijing’s will. Haiti, the poorest and most vulnerable nation in the Western Hemisphere, is thus caught in a war of attrition between China and Taiwan that threatens to undermine international efforts to bring the country back from the brink of state failure.

PARAGUAY - As the sole Taiwanese ally in South America, Paraguay is another possible candidate for withdrawal of support. Paraguay’s membership in Mercosur prevents it from signing a free-trade agreement with Taiwan without approval from all other Mercosur members, which presents a serious obstacle to the deepening of bilateral trade. Even without formal diplomatic ties, China already buys a good proportion of Paraguay’s soy crop while supplying about one-fourth of its imports, so normalized relations would undoubtedly bring significant trade benefits. Paraguayan recognition of Taiwan is in many respects a “holdover from the rabidly anti-communist Stroessner regime.” Given that Stroessner’s dictatorship has been out of office since 1989, officials in Asunción may just decide at some point that the time has come to eliminate this relic of a policy.

PANAMA - Speculation surrounding potential “swing states” also tends to center on Panama, one of the most strategically significant countries in Central America, where President Martín Torrijos invited Beijing to aid in the expansion of the Panama Canal. Panama’s voters approved a referendum on this massive infrastructure project last October, which will surely create new economic openings for Chinese construction companies. Relations between Taipei and Panama had cooled visibly when Torrijos assumed office; Torrijos turned down Chen’s request to visit Panama during a trip to Latin America in 2005. Much has also been made of the fact that Hutchinson-Whampoa, a Hong Kong-based Chinese shipping company with historically close affiliations with the China’s People’s Liberation Army, already holds a 50-year lease on management of key port facilities at both ends of the canal. Panama is a significant leader in the region, so if the Torrijos government arrives at the conclusion that the benefits of a relationship with Beijing are just too overwhelming to ignore, the rest of the isthmus may well follow suit.

The links suggesting Hutchinson-Whampoa as a front company for Red China in Latin America are tenuous. The company deals in import and exports for many countries the world over. In response to fears the company replied, "We have no pilots. We have no tugs. We have no boats. We have no ships. We have no containers. All we have is cranes." Following Hutchinson’s Bahamas port takeover – it was noted that Hutchison employs about 500 Bahamians. Only five managers are not Bahamians, mostly British nationals. None are Chinese.

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