China moves to fill U.S. void in Latin America

Chinese President Xi Jinping, right, and Argentinian President Cristina Fernandez shake hands after signing documents following their meeting at the Great Hall of the People in Beijing Wednesday, Feb. 4, 2015. (AP Photo/Rolex Dela Pena)

With little fanfare, Chinese president Xi Jinping revealed last month plans to bolster economic ties with Latin America to the tune of three quarters of a trillion dollars.

Then in February, the Chinese government pledged billions of dollars to help build hydroelectric dams in Argentina’s Patagonia region and to supply the nation with supersonic fighter jets capable of reaching the Falkland Islands. The move could buoy troubled President Cristina Fernandez de Kirchner, who has recently come under investigation for her alleged role in a failed deal to cover up Iranian involvement in a deadly Buenos Aires bombing in exchange for a trade agreement.

Her government also remains largely isolated from the global economy after effectively defaulting on billions of dollars in international bonds late last year.

The broader Latin American commerce announcement, which involves a ten-year plan to increase two-way trade to $500 billion and add $250 billion in direct spending, came after talks between Beijing and an envoy of regional leaders. The presidents of Ecuador, Venezuela and Costa Rica represented the Community of Latin American and Caribbean States, or CELAC, a coalition of 33 countries touted as an independent alternative to other inter-American groups led by the United States.

Over the past decade, the Asian economic giant has more than doubled its investment in Latin American infrastructure, energy and agriculture.

In an extreme example of regional ambitions, Chinese investors broke ground last year on a $50 billion effort to build a privately-owned 172-mile shipping canal across Nicaragua that would dwarf the capacity of the Panama Canal. While the legal and logistical challenges facing the project are substantial, it could dramatically shift the balance of trade influence in the region if completed.

Other Chinese investment in Latin America seeks to support ambitious energy, agriculture and infrastructure projects, particularly in nations with tense U.S. relations like Venezuela and Ecuador. In addition to its larger economic package, China offered Venezuela $20 billion in investment to help shore up the nation’s flailing economy in the wake of lower oil prices. Oil accounts for about 95 percent of Venezuela’s exports, and prices worldwide dropped by roughly half to a nearly six-year low in January.

The money could provide life support to Venezuelan President Nicolas Maduro’s disastrous administration. His anti-business policies have forced several foreign firms to shut down operations in the country in recent months. As a result, Venezuelans face recurrent shortages of basic household goods and runaway currency inflation that may be the world’s fastest.

Mr. Maduro’s January approval rating stood at a dismal 22 percent, according to a Venezuelan polling firm. If oil prices fail to recover full strength, even China may not be able to save him.

Meanwhile, the U.S. is understandably focused on dual crises in Eastern Europe and the Middle East. There are some signs that Latin America may soon draw greater attention, however. In December, President Obama pushed for renewed relations with Cuba, and he had previously issued an executive order in November that could affect the legal status of millions of Latin American immigrants.Mr. Obama’s constitutional boundary-pushing immigration move seems unlikely to withstand legal and legislative challenges — it was blocked by a federal judge in Texas last week, for example. But it underscores the desperate need for bipartisan immigration reform from Congress.

That need was made particularly clear when thousands of unaccompanied Central American children crossing into the United States strained Border Patrol resources last summer. The spike was caused in part by misinterpretation of an executive directive granting temporary legal status to illegal immigrants brought to the country as children.

The thaw with Cuba stands a much greater chance of long term success, even though it depends largely on the willingness of a Republican-controlled Congress to back the president’s plan to reopen a relationship with Latin America’s most infamous leftist dictatorship. They should not hesitate to support the plan.

The potential of normalized relations to boost democratic sentiment — tourism dollars and cultural influence being key factors — should outweigh any concerns. A January announcement that the Castro regime had met a key U.S. demand by releasing 53 political prisoners should lift hopes that real change is possible. And despite a list of implausible demands from the Cuban government, there appears to be strong bilateral willingness to negotiate.

That’s a good sign for Cubans and the rest of the region. Latin American countries with healthy diplomatic and trading ties to the U.S. tend to have strongly democratic governments, growing economies and expanding middle classes.

So as China maneuvers to become Latin America’s next big economic ally, the United States must work to maintain and strengthen its relationships in the region. Otherwise, the nation risks growing increasingly irrelevant in its own hemisphere.

Our neighbors in the Americas deserve continued support.

Ed Buckley is a Post and Courier editorial staffer. He previously worked in Colombia and Argentina.