Governments in Latin America and Africa are scrambling to build so-called "stategic trading partnerships" with China. But is it really a win-win situaiton?
SANTIAGO — Chinese loans and investments in Africa, Latin America and the Caribbean represent a new brand of colonialism, a gradual economic dominance that the target countries, as it turns out, are eager to welcome with open arms.
The self-styled progressive governments of Latin America and a good many African leaders, befuddled by China's largesse, have laid out the red carpet for big Chinese capital without stopping to think what the "generous" credit and promises of vast investments in key sectors of their economies might ultimately imply.
In their eagerness to establish so-called "strategic trading partnerships," they fail to comprehend that behind China's political and economic maneuverings lies an emerging imperial domination. Loans with minimal interest and few conditions are fuelling excessive debt among African and Latin American states, and reshaping global dependencies.
Although these countries have evidently, and partially, freed themselves from the imperial claws of the United States and European powers — as leftist leaders like Nicolás Maduro (Venezuela), Evo Morales (Bolivia) and Daniel Ortega (Nicaragua) keep crowing to the world — they are inadvertently falling into another imperial trap, one that may turn out to be singularly ruthless.
China's approach differs from classic colonialism in that it eschews any involvement in local politics or issues of civil rights and liberties. The results, though, are the same. Using credit and investments, China is little by little taking over key parts of the the economies in question. Its main objectives are to eventually control strategic natural resources, trade and infrastructures.
In Latin America, China has displaced the European powers and is already the second trading partner and main source of regional investments. Bilateral trade between China and Latin American and Caribbean states was worth $260 billion in 2014. Most of the money relates to raw materials such as oil, gold, copper, iron, gas and agricultural products, which China is both consuming and heavily investing in.
Brazil, Argentina, Venezuela, Ecuador, Bolivia, Chile, Peru, Nicaragua and Mexico are the main settings of these investments. China has become the main export market, in the meantime, for Brazil, Chile, Argentina and Peru. Venezuela is more or less mortgaged to China, having received loans worth more than $70 billion in exchange for oil.
In Peru and Bolivia, the Chinese already control more than 40% of the mining and energy sectors. China revealed at a recent Community of Latin American and Caribbean States (CELAC) summit in Beijing that is plans to invest another $250 billion in the region over the next decade.
In the case of African states, China overtook the U.S. as principal trading partner years ago. Bilateral trade between China and Africa has increased from $10 billion to some $215 billion in the past 15 years, and more than 2,650 Chinese firms operate in 50 of the 54 African states.
Together the companies control more than 65% of all public works projects and dominate the mining, oil, telecom and energy sectors in half the African states.
China has also become the second leading supplier of weapons to these states. As the Congolese writer Mbuyi Kabunda observes, Africa has become China's El Dorado and Latin America the setting of an economic and strategic turf war with the U.S.