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LatAm ill-prepared for China expansion -experts
June 30, 2009 / 10:21 PM / 8 years ago

LatAm ill-prepared for China expansion -experts

SAO PAULO, June 30 (Reuters) - Latin American countries lack an overall strategy and expertise on China that could help governments and businesses cope with the Asian country’s growing presence in the region, scholars said on Tuesday.

China and Latin American specialists speaking at a conference in Sao Paulo said China sees Latin America as vital to its own future energy, food and economic security, but that the region had been slow to develop China policies.

“Latin America is acting toward China’s expansion in the world in a reactive, disorganized or ad hoc fashion,” said David Shambaugh, professor of political science at The George Washington University.

“When I asked Itamaraty (Brazil’s foreign ministry) about its strategy on China, I got blank stares. There is no strategy.”

China this year displaced the United States as Brazil’s leading trading partner, as it is doing in several other countries in the region, which supplies much of China’s demand for soybeans, iron ore, copper and oil.

Shambaugh noted that the Chinese ambassador to Brazil gave a speech in Portuguese on Tuesday, while nobody at Brazil’s foreign ministry was fluent in Mandarin and no Latin American diplomat in China was able to give a speech in Chinese.

There are only two comprehensive China studies programs at universities in Latin America, one in Mexico City and the Salvador University in Buenos Aires.

“China on the other hand does have a strategy, on the diplomatic, commercial, cultural and military levels toward Brazil and Latin America,” he said at the Brazil-China Business Chamber’s Third International Conference.

“There are individual provinces and cities in China that have a Brazil strategy.”

Among its growing investments in the region, China last month signed a $10 billion deal under which Brazil’s state-owned oil firm Petrobras will supply 200,000 barrels of oil a day to Chinese state-oil firm Sinopec over 10 years.

Chinese demand for commodities had been a major factor in the region’s strong growth in recent years until the global economic crisis struck late last year.

“Argentina’s growth of 8 to 9 percent a year over the past five or so years can not be explained without China,” said Gonzalo Paz, professor of foreign relations at the Elliott School of International Affairs.

Paz said that granting China market economy status by countries like Brazil and Argentina has flooded some sectors with low end Chinese goods and caused problems in the electronics and textile sectors.

“It’s almost as if these didn’t do their homework,” said Shambaugh. “The United States, Europe, Japan and Australia did not grant China market economy status.”

Bilateral trade between Argentina and China has grown from $1.85 billion in 2001 to $12.4 billion in 2008, Paz said. Chile’s trade with China has grown from $2.1 billion to $15.3 billion over the period.

China’s share of world oil imports has grown from 3.5 percent in 2000 to 9.5 percent now. It now accounts for 63 percent of world soybean imports, nearly tripling its stake since 2000. It is also the world’s largest iron ore, copper and nickel importer, according to World Bank data.

Daniel Lederman, a senior economist at the World Bank, said said a lack of long-term planning and investment in education had prevented Latin America from fully meeting the insatiable demand from China and India for natural resources.

“Latin America needs to reinvest in education and training that target natural resource and scientific intensive products,” he said, adding that this was where growth would likely come in the region.

Reporting by Reese Ewing; editing by Stuart Grudgings and David Gregorio

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