Generosa Chinese investment in Latin America, including key infrastructure projects, is a geopolitical chess game, but also high risk, writes columnist Frank Sieren DW.
In geopolitical terms, the project's most important infrastructure world today is in Nicaragua. To the tune of $ 50 billion, the Chinese began work last December on a new canal linking the Pacific and Atlantic. 280 km long and 30 meters deep, Nicaragua Canal can accommodate ships too large for the Panama Canal, bringing an end to the monopoly its100 years long.
The Grand Canal is an excellent example of how Beijing skillfully navigates the world stage. Use conditions favorable to gain politically valuable contracts and major infrastructure projects that bring a supply of resources such as oil and natural gas credit and foodstuffs such as corn.
The new waterway is just one of many ambitious projects that China is deploying at the door of the United States. Earlier this year, Beijing hosted the first summit of the 33 countries of the Community of Latin American and Caribbean States (CELAC). Despite the many historic decisions made at the meeting, which was ignored by the Western media.
The president of China, Xi Jinping, for example, promised to ringfence an additional $ 250 billion for the partners of China in the next 10 years. But there is no such thing as a free lunch. In the past, Beijing approved loans in exchange for raw materials.
January summit emphasized a development that has been underway for some years; namely that China's role in Central America and South America are defined less by the country's thirst for resources and for general thrust of influence. Beijng no longer satisfied only with the purchase of oil. The lion's share of their investment has gone to infrastructure in the countries of the CELAC in a move designed to boost trade relations.
On a visit to Latin America last year, Chinese President Xi Jinping signed agreements as if they were fashionable. Argentina got new rail projects; 29 contracts were signed in Cuba, including one for a new port, while China has signed more than 300 agreements with the number one cooperation partner, Venezuela, a country that has received loans worth more than $ 40 billion in last four years. Beijing is now in the spotlight not only raw materials from Latin America, but increasingly, their markets, too.
Hitting the US It was the first
As always, trade is not the street from one direction. 25 percent of Chile's exports and make their way across the Pacific; 15 percent of Brazil and Uruguay to, while 8 percent of total exports of Colombia and Argentina are destined for China. Trade volume is 20 times higher than it was at the beginning of the 21st century China is now the largest trading partner of Brazil, Chile and Peru, and the second trading partner of Argentina.
It seems obvious that President Xi is the aim of replacing the US as a trading partner in the region, reducing its influence on the process as an added bonus. It is a goal that will most likely achieve.
Washington is barely able to finish generous financial injections of China. But he can console himself with the knowledge that China's strategy is risky. After all, the faltering economies of Latin America are failing to retrieve the most efficient way to Beijing would like.
Foreign investors are taking their money out of these unstable emerging economies. Inflation is rampant in Brazil, the largest economy in the region. The economies of Argentina and Venezuela shrunk in recent quarters. If these markets back on track, rain Chinese investment could begin to decline rapidly. But after the recent summit in Beijing, the above countries can breathe a sigh of relief - at least for now. Beijing has not lost his patience yet. But setting higher prices to its geopolitical gains. These, however, should not be underestimated.