Friday, September 15, 2006

China Seizes Opportunity at Cuba Summit

Las Vegas Sun

September 14, 2006

By OLGA R. RODRIGUEZ
ASSOCIATED PRESS

HAVANA (AP) -

China hopes to expand its growing economic and political clout at the Nonaligned Movement summit, influence that analysts say will come at the expense of the United States, which passed up a similar invitation to attend as an observer.

Led by China's Vice Minister of Foreign Affairs Yang Jiechi, the Chinese delegation plans to hold bilateral meetings with a number of Latin American countries and strengthen China's ties to the region where its trade has soared. China's imports from Latin America quintupled to $20.3 billion and exports to the region tripled to $15.4 billion from 2000 to 2004, according to the International Monetary Fund.

The administration of President George W. Bush has declined to attend the summit, and a press officer at the U.S. Interests Section in Havana said it wouldn't comment on the Nonaligned Movement.

That's a mistake, according to Latin America analysts who have tracked declining U.S. influence in a region where it can no longer count on the unconditional support of political leaders, even though U.S. trade remains the most powerful engine for their economies.

"Bush likes to use the saying 'You're either with us or against us' and they are writing off the summit because they are non-aligned, which to them means they are not with the U.S.," said Mark Weisbrot, co-director of the Center for Economic and Policy Research in Washington, D.C.

The United States is wary of the region's more leftist governments, some of which have openly opposed Washington's economic prescriptions of economic growth through austerity measures, free trade deals and privatization. The region's economies have largely stabilized - hyperinflation and crippling debts are mostly history. But poverty and unemployment remain huge problems, and many Latin Americans feel the Washington model failed to improve their lives.

Some analysts say the U.S. is out of touch, still trying to impose trade agreements that will make life even more difficult for the poor while raising the rhetoric about the dangers of populism in Venezuela, Bolivia and other countries.

Earlier this year, U.S. Defense Secretary Donald H. Rumsfeld compared Venezuelan President Hugo Chavez to Adolf Hitler, and Bush worried publicly about the leadership of Bolivian President Evo Morales.

Chavez's response was telling: At an event with Fidel Castro in Havana in February, he noted the waning U.S. influence in the region and echoed Chinese revolutionary Mao Zedong's idea that capitalist countries were "paper tigers" to be challenged.

China paid little attention to Latin America until recently, and its commerce with the region still represents less than one percent of its collosal foreign trade, according to a Harvard University study commissioned by Inter-American Dialogue, a Washington research center. But now China is booming and looking to Latin America for the raw materials it needs to support its growth, and for new markets to sell to.

And unlike the United States, which often uses trade deals as political leverage, China has avoided political meddling, said Weisbrot, who predicts that U.S. commerce may have already peaked as a share of Latin America's economies, while their trade with China will grow substantially.

China, whose domestic consumption is expected to grow by $1.3 trillion in the next decade, is increasingly seen by the world's developing nations as both a source of investment and a mammoth emerging market.

China mainly exports machinery, televisions, computers and automobiles to Latin America. In exchange, it buys about 30 percent of its agricultural imports (mostly soy beans) from Argentina and Brazil, China's largest trading partner in the region, and is one of the top buyers of Chilean copper.

While some Chinese products such as textiles and electronics have made it difficult for some Latin American industries to compete, Chinese investments have made it easier for Argentina, Brazil and other countries to buy political independence with early payoffs of their national debts.

"(The U.S. is) refusing to acknowledge the changes that are taking place in Latin America," Weisbrot said. "That's why they are losing influence so rapidly."

While the relationship is purely economic for most developing countries, Cuba, Bolivia and Venezuela see China as a counterweight to U.S. hegemony.

Relations between Cuba and China were tense during the Cold War, when the Caribbean island was strongly allied with the Soviet Union, but warmed after the Berlin Wall fell in 1989 and Cuba lost its preferential trade and aid deals with the Soviet bloc.

China is now Cuba's third-largest trading partner, with a trade exchange of $985 million in 2005. China invests primarly in Cuba's nickel industry as well as tourism, transportation and telecommunications.

"Without a doubt these relations have developed in the framework of our shared political ideology," Cuba's Economics Minister Jose Luis Rodriguez told reporters at the Nonaligned summit this week.

But Communist Cuba has a unique relationship with China - which so far seems unwilling to raise political quarrels with the United States over Latin America, said Javier Corrales, a Latin America expert at Ahmerst College in Massachussetts.

"At the moment," he said, "what China is doing is not costly in its relations with the U.S."

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