Beijing seeks Latin trade ties

BEIJING

As Secretary of State Hillary Rodham Clinton headed to Asia on Sunday, China was embarking on a double-pronged diplomatic mission in Latin America, seeking more robust trade ties to temper the impact of the financial crisis and demonstrate its swelling influence in the U.S. backyard.

Visits by two top Chinese officials coincide with calls from U.S. policy specialists for the Obama administration to devote more attention to Latin America - a region where they warn China, Russia and Iran are building alliances as U.S. influence wanes.

Vice President Xi Jinping is visiting Brazil and Mexico, China´s two largest trading partners in the region, Venezuela, which is set to export 1 million barrels of oil a day to China by 2012, Colombia and Jamaica. Vice Premier Hui Liangyu is touring Argentina, Ecuador, Barbados and the Bahamas.

The twin charm offensive is driven by urgent trade needs. As demand for Chinese exports in the U.S. and Europe slumps, China is looking for new markets to prop up its economic growth. It is also eager to secure long-term access to Latin American commodities, notably oil, copper and soybeans.

Even before the global economic downturn, China began courting Latin America.

In November, President Hu Jintao visited Costa Rica, Cuba and Peru. Last month, China became a member of the Inter-American Development Bank, pouring $350 million into the bank´s coffers for infrastructure spending in the region.

Bilateral trade has surged in the past decade, rising tenfold to $103 billion in 2007. China is Latin America´s third largest trading partner, although trade figures still lag significantly behind the U.S. ($560 billion) and the European Union ($250 billion). The explosive rate of growth has been bolstered by free-trade agreements with Chile and Peru, and a pact with Costa Rica is in the pipeline.

The diplomatic tours of Mr. Xi and Mr. Hui are also vital components of a deeper geopolitical strategy, particularly when viewed alongside Mr. Hu´s four-nation tour of Africa, which concludes Tuesday.

“China is attempting to turn lemons into lemonade, converting the financial crisis into an opportunity to improve its long-term economic advantage and energy and food security,” global intelligence firm Stratfor said in a recent report.

“With plentiful cash reserves, Beijing and its state-owned companies can try to secure access to strategic commodities now, while global competitors are hamstrung by credit crunches and retrenching.”

The report also outlined China´s reasons for visiting comparatively minor nations such as Barbados and the Bahamas.

“China needs to show that it will not abandon even its smallest friends during tough times, and that it is not just another colonial power looking to exploit them,” it said.

China´s growing presence in Latin America is not without benefits for the U.S. but also presents major challenges, said Dan Erikson, senior associate for U.S. policy and director of Caribbean programs at the Inter-American Dialogue, a Washington organization that promotes closer U.S.-Latin American ties.

“The advantage for the U.S. is that China can contribute to Latin America´s economic development and help the region to develop a more global outlook.

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