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China Establishing Economic Ties with Latin America

China is expanding its economic and political ties with Latin America, a region traditionally seen as within the sphere of influence of the United States. Some analysts say the Chinese move is accelerating as Washington has become more preoccupied with other parts of the world, particularly in conducting the war on terrorism and Iraq. What's driving the Chinese strategy?

Chinese President Hu Jintao paid a visit to Mexico recently, where he met with his Mexican counterpart, Vicente Fox, and members of Mexico's Senate. The two leaders presided over the signing of various agreements, including one that may eventually allow Chinese companies to mine iron and other minerals in Mexico.

It was Mr. Hu's second visit to Latin America in less than a year. His stops last year included Argentina and Brazil where he met with the presidents of those countries and signed commercial agreements to increase Chinese imports of agricultural products and other commodities. China's initiative toward Latin America appears to be part of a wider global strategy.

Michael Shifter is a Latin American expert at the Washington-based policy group, Inter-American Dialogue.

"I think they are finding opportunities here and those opportunities are opportunities that the United States isn't taking advantage of. There is a sense that the United States has looked elsewhere and hasn't really put the energy and effort into taking advantage of the economic opportunities in this hemisphere. I think China has discovered that there may be some interesting ways they can take advantage of them so I think that's happening, but I think this is part of their global strategy as a major power."

China is looking at Latin America primarily as a source of raw materials like oil, timber and minerals. It also is importing agricultural products such as beef. These Latin American imports are supplying China's rapidly expanding manufacturing sector and helping to feed its huge population.

The Bush administration, which in August signed a free trade pact with Central America and the Dominican Republic, says it is not too concerned about China's initiatives in the hemisphere, noting that U.S. trade and investment in Latin America dwarfs China's.

However, Roger Noriega, who until last week was the State Department's Assistant Secretary for Western Hemisphere Affairs, warns Washington does not want to see Beijing establish security ties with certain countries.

"If there's intelligence cooperation, or an effort to build security relationships, military-to-military relationships, in a way that would be detrimental to our security or the interests of our neighbors in the Americas, that would be a concern for us,” said Mr. Noriega. “We don't see that as a major problem but it's something that we have to pay close attention to."

Mr. Noriega points to the growing ties between Venezuela's Hugo Chavez and Cuba's Fidel Castro as the main source of concern should Beijing establish security relations with those nations.

China's expanding role in the region prompted the U.S. Senate Foreign Relations Committee to hold hearings on the issue Tuesday. Some lawmakers wondered if China posed a threat to U.S. influence in the Americas.

Administration witnesses played this down, but Roger Pardo-Maurer of the Defense Department highlighted the differences between the U.S. and Chinese approach toward Latin America.

"There is something very real out there, which we call the Inter-American system which is undergirded [supported] not only by binding institutions between governments, but by ethics and mores, and a common vision of the world. China is not part of that system at all. It's not a democracy, it's not a place where you can speak freely, it's a place whose interests in Latin America are economic."

For their part, Brazil and other Latin American countries view China as a promising new business partner -- a sign that Latin Americans are looking beyond their traditional economic and political relationship with the United States.