{"id":50006742,"date":"2016-07-07T07:00:47","date_gmt":"2016-07-07T06:00:47","guid":{"rendered":"https:\/\/stage.dialogochino.net\/?p=6742"},"modified":"2023-05-18T12:04:17","modified_gmt":"2023-05-18T11:04:17","slug":"6742-china-and-latin-america-strategic-relations-in-times-of-change","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/business\/6742-china-and-latin-america-strategic-relations-in-times-of-change\/","title":{"rendered":"China and Latin America: strategic relations in times of change"},"content":{"rendered":"

Anxiety over economic and political crises in Latin America is palpable in China. \u201cVenezuela will not drag on its debt\u201d was the title of a recent editorial in the People\u2019s Daily<\/em>, the official mouthpiece of the Communist Party. The piece<\/a> makes a bold claim and a display of realpolitik: \u201cAny country, whatever the political ideology of its ruling party, prioritises economic development and betterment of the livelihood of its people. Which country in this world would not want to ride on China\u2019s express train to economic development?\u201d<\/p>\n

This official editorial was in response to a wave<\/a> of speculation about the solvency of the Venezuelan government, against the backdrop of a failing economy, that could precipitate the end of the Chavista government which, for over a decade, has been friendly towards Beijing.<\/p>\n

The People\u2019s Daily<\/em> editorial first states that \u201cup to now, Venezuela has not missed any [debt repayment] deadline and nor has it breached any agreement terms\u201d. It then estimates that the South American country sits on 300 billion barrels of crude oil, roughly 18% of worldwide reserves, which could last \u201cat least another 300 years\u201d and has a “high potential for monetisation\u201d. The editorial ends by stating that a future change of government in Caracas will not sour bilateral relations. The opposition and Chavistas may be \u201cindulging themselves in political dispute\u201d, but Venezuelan society as a whole believes that Chinese funds and technology are very important and “it is necessary to continue cooperation with China”.<\/p>\n

The decline of the left <\/strong><\/p>\n

These debt woes are set against the backdrop of wider political changes in Latin America: after over a decade of the predominance of left-leaning governments on the continent, more centre-right political parties are taking over. In Argentina, Mauricio Macri\u2019s Cambiemos (let\u2019s change) alliance ended<\/a> over a decade of Kircherismo (a branch of the traditional Peronismo movement). In Brazil, embattled president Dilma Rousseff of the Workers Party has been suspended<\/a> in an impeachment process and replaced by liberal Michel Temer<\/a>. In Venezuela, Hugo Ch\u00e1vez’s appointed successor Nicol\u00e1s Maduro faces an unprecedented economic crisis and increasing pressure to step down after the opposition won an overwhelming majority in the National Assembly last year. And in Cuba, Ra\u00fal Castro\u2019s government has re-established diplomatic ties<\/a> with the United States and ended decades of economic embargo.<\/p>\n

The Leftist governments that swept to power around the turn of the century, led by Chavez and Lula in Brazil, rode a tide of sky-high commodity prices, elevated by Chinese demand. Countries rich in resources prioritised their extraction and export, with little concern about a price crash or the environmental costs<\/a>. Western media have been quick to chastise<\/a> the Latin American left\u2019s management of resources and dependence on China.<\/p>\n

Diplomatic pragmatism<\/strong><\/p>\n

Chinese foreign minister Wang Yi has acknowledged changes in Latin America\u2019s political landscape, but stressed that \u201cChina\u2019s policy of enhancing cooperation with Latin American countries remains unchanged\u201d.<\/p>\n

In an official press release<\/a> after a meeting with Argentine counterpart Susana Malcorra in Beijing on May 19, Wang said that although the volume of China-Latin America commodities trade has \u201cslightly dropped\u201d, the difficulties facing Latin American countries are \u201ctemporary\u201d and cooperation in investment, finance, production capacity and infrastructure will continue.<\/p>\n

Malcorra, on behalf of Macri\u2019s young administration, was in Beijing to ratify infrastructure agreements<\/a> signed by the previous administration. Despite the wish to \u201crevise\u201d certain aspects of the agreements, the new government emphasised a strong desire to \u201cratify the strategic alliance with China\u201d.<\/p>\n

Venezuela woes<\/strong><\/p>\n

In June, the Financial Times<\/em> reported<\/a> that Chinese officials had met with Venezuelan opposition members to gain assurances that the country will honour its debts even in the event of a recall referendum that will cut short president Nicol\u00e1s Maduro\u2019s term. The Chinese government denied the report the next day. The Financial Times<\/em> also reported that Venezuela had requested a moratorium on its debt equivalent to US$ 65 billion.<\/p>\n

There is no official data on the exact amount or terms of the debt from the Chinese side, and media outlets — commercial or official — quote foreign news sources while denying their credibility at the same time. The People\u2019s Daily<\/em> editorial blamed \u201cWestern media\u201d for playing up the issue, asserting that when financial and energy security are at stake, \u201cit is common practice to keep details of the agreements secret\u201d.<\/p>\n

\u201cThe current crisis in Venezuela makes Beijing uneasy,\u201d says Antonio Hsiang, director of the Centre for Latin American Economic and Trade Studies of the Chihlee University of Technology<\/a>. Although South-South cooperation is not necessarily based on ideology, if a poster child like Venezuela defaults, the failure of the \u201cmoney for oil\u201d model will deal a huge blow to Chinese diplomacy in Latin America, Hsiang tells Di\u00e1logo Chino<\/em>. He also believes that \u201cleftist governments have a tendency towards anti-American rhetoric,\u201d adding that the current political shift in Latin America implies a loss of ground for Beijing in the Western hemisphere: \u201cThey are losing comrades on the diplomatic arena,\u201d he concludes.<\/p>\n

Adapting to change<\/strong><\/p>\n

\u201cIn the next 5 to 10 years, right-wing governments will play a leading role in Latin American politics,\u201d a 2015 yearbook published by the Latin America Institute of the Chinese Academy of Social Sciences predicts. The yearbook (not available online) published on June 1 highlights two major trends: \u201cGreat political changes in the making\u201d and an \u201cOverall economic downturn\u201d. The yearbook notices the left-to-right transition, but stresses it\u2019s a \u201csteady\u201d shift within constitutional legal frames, hence overall political stability has been maintained. \u201cThe Latin American left is facing its most challenging time in a decade, right wing parties are gaining ground, the left in Argentina, Venezuela and Brazil have all been dealt a blow\u201d, the research says, and stresses that “deep changes in the political landscape in the region are taking place\u201d.<\/p>\n

Zhang Fan, international relations researcher at the Latin America Institute of the Academy of Social Sciences, believes that diplomatic divisions have started to deepen in the region. In the press release for the yearbook, Zhang is quoted saying that \u201cCuba-US re-establishing diplomatic ties and US policy adjustment towards Latin America\u2019s left-leaning governments are strong signs of extra-regional factors continued influence in the region\u201d. The paper also points out that Latin American countries\u2019 diplomatic priorities are to maintain close ties with countries in the Western hemisphere. Zhang Fan turned down both telephone and email interview requests by Di\u00e1logo Chino<\/em>.<\/p>\n

In the face of these changes, the 2015 yearbook suggests China should carry out \u201cpolicy readjustments\u201d and \u201cstrategic redeployment\u201d in Latin America. With a clear emphasis on pragmatism, the yearbook further suggests pushing for greater cooperation on infrastructure projects to expand bilateral trade and commercial ties.<\/p>\n

End of a cycle<\/strong><\/p>\n

\u201cThe left-turn cycle in Latin America is coming to an end\u201d, acknowledges He Shuangrong, another Latin America researcher at the Academy of Social Sciences in an article<\/a> on the website of the International Department of the Central Committee of the Communist Party of China.<\/p>\n

\u201cThe pillars of the Latin American left\u201d, namely Venezuela and Brazil, \u201care facing great crises from within, hence the left in the region is now headless,\u201d he is quoted as saying.<\/p>\n

The piece, entitled Will the Latin American left rise again? –<\/em> instead of addressing debt solvency concerns or reaffirming a new apolitical pragmatism – looks at the rise and fall of the presupposed ideological allies in the Western hemisphere. The centre-right has won in consecutive elections in the region following policy mistakes during the left\u2019s tenure and a global economic downturn, the article says.<\/p>\n

Wu Baiyi, head of the Latin America Institute of the Academy of Social Sciences takes a longer view of these \u2018inherently cyclical\u2019 electoral processes and says that \u201cthe popular base of the left in Latin America is essentially intact\u201d.<\/p>\n

\u201cIf the right-wing governments cannot find a path out of the economic downturn… the Latin American left will very possibly rise again,\u201d Wu says.<\/p>\n","protected":false},"excerpt":{"rendered":"

Chinese experts predict new pragmatism as Venezuela crumbles but the right also faces challenges<\/p>\n","protected":false},"author":40000225,"featured_media":50006747,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[758],"tags":[544,50040720,600],"hashtags":[],"country":[50000020,50000021,20000110,50002604],"class_list":["post-50006742","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-finance","tag-geopolitics","tag-trade","country-argentina","country-brazil","country-china","country-venezuela"],"acf":[],"yoast_head":"\nChina and Latin America: strategic relations in times of change | Dialogue Earth<\/title>\n<meta name=\"description\" content=\"Chinese experts predict new pragmatism as Venezuela crumbles but the right also faces challenges\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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