As the Chinese leadership prepares to retire beyond closed doors for the 18th Communist Party Congress next month, it sees a set of ties with Latin America that look pretty average. This is noteworthy since eight years ago, the Chinese president's trip to the region mirrored that of a rock star, with the hosts saw China as an extraordinary savior, while the Chinese appeared to view Latin America as a natural resource base for exploitation.
What a change has occurred! Hugo Chavez Frias’victory in early October will herald a continuation of his anti-U.S. policies, but does not represent a dramatic turning point for China's involvement in Latin America. He represents a volatile, unpredictable force from which much of the world shrinks, but Beijing—uncomfortably—needs the petroleum commitment he is willing to make. The desire to lock in resources highlights an ongoing challenge for China. Beijing has made marked strides over the past decade as it has enhanced its ties with the overwhelming majority of countries south of the Rio Grande, but those improvements have all illustrated China's fears of being cut off from resources to continue its economic expansion as much as any grand strategic threat to the stability or security of the western hemisphere. Indeed, one could conclude that China's increased appetite for Latin America's natural resources and food stuff has simply provided an Asian dimension to Latin America's experience with outsiders pursuing inconsistent policies with often ineffectual results.
China has demonstrated an insatiable resource requirement to maintain its economic expansion begun in the late 1970s and accelerating over the past decade. Beijing is particularly interested in access to commodities such as iron ore, copper, silver, soy beans, and petroleum. Latin America offered these exports which resulted in more than $50 billion in revenue for the region in 2010. As late as that date, many export analysts surmised that China's growth was inevitable and that benefits for Latin America could only be similarly and inevitably positive.
Questions have arisen, however, about whether this intertwining with China has the potential to be as destructive for Latin America as previous experiences with the voracious commodity appetite of foreigners who drive up commodity prices. Exporters in the region are too often seduced into relying to rely on welcome but unpredictable revenue, instead of experiencing the severe pains that true market reforms require for states seeking to diversify their economies, as Latin American countries have been trying to do for decades. Indeed, China's desire to buy these commodities has created a familiar price increase over the period from 2000 which has led to a boom for the region.
The increase in petroleum prices particularly led Venezuelan president Hugo Chavez Frias to push away the country’s traditional relationship with the United States as he sought to embrace Beijing as an alternative to Washington's preachy emphasis on democratic principles and true economic openness. He sought to play regional leader to prove his political machismo, as Beijing's ties allowed the Venezuelan president to thumb his nose at the United States by selling petroleum to China. As the Venezuelan highlighted the power that his increasing revenues appeared to bring, Chinese involvement in this strategic resource seemed to upset the traditional balance of power in the region, to Washington's great disadvantage.
What a difference an economic slowdown can make! By mid-2012, China's economic slowdown was an unavoidable reality that few anywhere around the world could ignore, but particularly not in Latin America where commodity prices had fallen in response to the Chinese, European and U.S. economic slowdowns. Suddenly, the inevitability of China's growth went from being legendary to being the pattern characteristic of economies subject to the power (and realities) of the international market. With the exception of soy bean prices, affected by a massive U.S. drought through the summer of 2012, Latin American commodity sales to China fell sharply as has happened to the region many times before.
Of equal importance, China does not appear all that special as a partner in the international community as its leadership increasingly focuses on the domestic political drama of Bo Xilai’s downfall and the jockeying of the imminent Eighteenth Party Congress in late 2012. It seems to Latin America that China was less interested in the region than some optimists had projected. A more critical Latin American look at Beijing’s behavior has led some to wonder how China could be embraced after the region had worked so hard on its own reforms that the Communist Party of China seemed unwilling or incapable of adopting itself.
Beijing has continued to invest in longer-term links with the deteriorating Venezuelan petroleum industry as a hedge against any potential U.S. moves to shut China out of other petroleum sources. China tolerates Sra. Cristina Fernandez de Kirchner's increasingly chaotic behavior in exchange for access to the exports Kirchner desperately needs as she figures out how to keep domestic constituents happy while ignoring fiscal realities.
Conclusions
While commodity ties have improved since 2004, Latin America has ruefully learned that ties with China are no different than with other powers. China offers a partner new to the region during this century, but one subject to the same market forces as is the United States or the European Union. China looks at its national interests first and always will, as do other states. China has, thus, proven a normal nation in the international community, instead of a completely new answer for a region looking to address its role in the world.
Cynthia Watson is a professor at the National War College. These views are exclusively personal and do not represent those of the National Defense University or the U.S. Government.
