The US Erodes in Latin America

The influence of the U.S. is beginning to erode in Latin America; Brazil is prepared to reach an agreement with Peru and China regarding the construction of a transoceanic railroad that will connect the Atlantic and Pacific oceans between the two South American countries. The job is estimated to cost $30 billion. The ambitious project will have the important participation of Chinese investors.

According to the newspaper Folha de Sao Paulo, during his visit to Latin America, Chinese Prime Minister Li Keqiang took up the subject of Brazilian agricultural products, especially soy seeds. He is interested in creating a route by which these seeds can reach the Pacific and avoid the Panama Canal, which is under U.S. domain. He also spoke with the leaders of Colombia, Chile and Peru.

In July 2014, the Brazilian president and her Chinese counterpart, Xi Jinping, signed a joint agreement to propel Chinese investments of railway materials in the Latin American country.

In the opinion of analyst Adolfo Manaure, the announcement made by the Chinese president about his country’s plans to invest $250 billion in Latin America during the next decade sends a clear signal to American companies. “Now you have competition,” he wrote in an article for the website CVIO America Latina.

The journalist pointed out that total trade between China and Latin America has rapidly grown in the last decade, reaching a historic high $500 billion in 2014, according to data from the ADB (Asian Development Bank) Institute.

Even before that last promise of Chinese investment, the expectations of growth for 2020 were at least $750 billion. “The new reality throughout the world is that the United States’ political and economic hegemony is beginning to crack, and China is at the head of the group of nations that seek to fill the breach,” Manaure wrote.

The financial support of the Chinese government, particularly in the fields of technology, and automotive and alternative energy, benefits Chinese businesses engaged in international competition by threatening the points of vulnerability of American companies.

One of the best examples of such a change in the balance of power in the international market is the company Lenovo, which not only snatched the leadership role from the American company, Hewlett- Packard Co., in the global supply of computers, but now also possesses a recognized brand of smartphones in order to forcefully break into the Latin American market, after buying Motorola from Google.

Analysts confirm that in business terms, China has surpassed the U.S. in Argentina, Brazil, Peru, and Venezuela, and continues getting closer to Latin American countries by means of assistance and financing.

CNN explains that in 2015, the Chinese banks continue to increase their investments in Latin America by 71 percent, as the reverse process is observed with American capitals, which are abandoning the region. It adds that, “This is happening at the same time that the United States’ power in Latin America is starting to erode.”*

Expert Patrick Gillespie, author of the article, “The Power of Relations Between Peking And Central And South American Region Is Strong In The Long Run,” wrote, “The president of China, Xi Jinping, has promised to double business between his country and Latin America in the next decade up to $250,000 million.”**

For his part, Ilan Berman, vice president of the American Foreign Policy Council, stressed that China has already contributed toward financing a nuclear plant in Argentina and launching the first satellite in Bolivia, and by the same token it plans to help Venezuela initiate its own drone program.

According to Margaret Myers, an expert at the Inter-American Dialogue center, in 2014 the Chinese banks loaned $22 billion to Latin America in 2014, which is more than the amount that both the World Bank and the Inter-American Bank sent to the region.

*Editor’s Note: This quote, although accurately translated, could not be verified.

**Editor’s Note: This quote, although accurately translated, could not be verified.

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1 Comment

  1. Good luck to the new South American colonial power, The People’s Republic of China. They will need it judging by all such past attempts. Let me make some predictions: projects will cost more than budget; the locals will be critical of the newcomers; there won’t be enough money generated to pay back creditors; China will end up like all previous colonizers — running for the hills at the end of the day.

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