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ANDRES OPPENHEIMER S. America crucial to China's future



Published: Fri, February 25, 2005 @ 12:00 a.m.



BEIJING -- Chinese President Hu Jintao spent more time in Latin America last year than President Bush. And China's vice president, Zeng Qinghong, spent more time in the region last month than his U.S. counterpart, Vice President Dick Cheney, over the past four years.

What is going on? Why is China so interested in a far-away region with which it had little contact until recently?

I put these questions to dozens of senior Chinese officials, academics and business people during a 10-day visit here. Before I present what I think lies behind China's foray into Latin America, and whether it will help or hurt the region, let's hear their answers.

UChina needs raw materials: China's economy has been growing at a 9 percent annual rate for the past two decades, and it increasingly needs Venezuela's oil, Brazil's soybeans, Chile's copper and other raw materials abundant in Latin America.

While the majority of China's 1.3 billion population -- the world's largest -- remains poor, there is a rapidly growing middle class of about 250 million people that has more money than ever to spend on cars and other consumer goods.

UChina wants to diversify its suppliers of raw materials: As an emerging superpower that can't rule out a future confrontation with the United States, China wants to reduce its dependence on U.S. and Middle Eastern imports. While China imports much of its food from the United States and its oil from the Middle East, its trade with Latin America accounts for only 3 percent of its worldwide trade. China expects to more than triple its trade with Latin America by 2010.

UChina is looking for a backdoor to the U.S. market: With the U.S. trade deficit ballooning to $617 billion last year, in part because of growing U.S. imports from China, the Chinese government may want to anticipate potential U.S. trade barriers. Setting up factories in Latin American countries that have free-trade agreements with Washington, or are likely to sign them soon, could give China an alternate route into the U.S. market.

UChina wants Latin America's votes at the United Nations and other world forums to help counterbalance U.S. influence: With the rise of left-of-center presidents in Venezuela, Brazil, Argentina and other Latin American countries, China sees an opportunity to get support for its proposals to reform the U.N. voting system and to shield itself from international criticism on issues like the occupation of Tibet and its dismal human rights record.

UTaiwan: China's quest to recover what it calls "the province of Taiwan" is one of the top issues of its foreign policy agenda. There are about a dozen countries in the region -- mostly in the Caribbean and Central America -- that still maintain diplomatic relations with Taiwan, and China wants to change that.

My conclusion: It's no coincidence that President Hu spent nearly two weeks in Brazil, Argentina, Chile and Cuba last year, or that Vice President Zeng spent nine days on a five-country tour that included Mexico, Venezuela and Peru in late January.

"I've been in this office for 25 years, and I've never seen a Latin American fever like this," says Jiang Shixue, a top official of China's Academy of Social Sciences' Latin American Division, a department that, with a staff of 55, he says is the largest academic center on Latin American issues in the world. "We are getting more visits from [Chinese] business people who want to ask questions about Latin America than ever before."

The reasons for China's Latin American charm offensive, of course, are all of the above. But China's growing appetite for raw materials may be a mixed blessing for Latin America. For many countries in the region, it may further delay the market reforms they need to undertake -- like China did -- to get the foreign investments needed to produce finished goods that produce much more income than raw materials.

Sure, China's Communist Party leaders are publicly singing praises to Cuba, Venezuela and a new world order.

But the Chinese are laughing all the way to the bank. While they have privatized one million state-owned companies and are carrying out free-market reforms with a passion while claiming allegiance to socialism, several Latin American countries are doing the opposite -- adopting China's socialist rhetoric and dismissing its free-market actions. Guess who's winning?

X Andres Oppenheimer is a Latin America correspondent for the Miami Herald. Distributed by Knight Ridder/Tribune Information Services.




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