Posted on 04/13/2005 9:53:44 AM PDT by hedgetrimmer
The realities of global trade and politics are driving Asia's new economic powerhouse China and resources-rich Latin America closer, with Japan watching warily, according to researchers.
China is searching for energy sources to feed its fast-expanding economy and for new markets to sell its goods manufactured at low production costs.
For their part, Latin American countries are trying to diversify trading partners, shifting away from over-dependence on the United States which is aiming to create a huge Americas trading bloc to compete with Europe.
The Inter-American Development Bank (IDB) called for closer links in trade and investment between Asia and Latin America at its annual meeting held in Japan this week at a time when China is leading global economic growth.
"It is a logical step for China to seek its export markets in Latin America and investment in energy and minerals in the region," said Satoyuki Imai, dean of the Faculty of Modern Chinese Studies at Aichi University in central Japan.
China has to look for new frontiers in less developed countries in Latin America, Asia, the Middle East and Africa since the dominance of its low-priced goods has hit a saturation point in industrialized nations, he said.
Hiroyuki Tani, associate professor in Latin American economy at Sophia University in Tokyo, noted that until recently Japan had been the only gateway to Asia for many Latin American countries.
"Latin American countries realize that too much concentration on the US is not good and they are looking for new relationships, whether with Japan, China or India," he said.
Closer ties between China and Latin America have also stemmed from political considerations.
The leftist Venezuelan government of Hugo Chavez, who is opposed to Washington's dominance in the western hemisphere, has been increasing bilateral trade and investment with communist China.
China, which became a net oil importer in 1993 and ended long-term crude shipments to Japan last year, has signed a contract to buy Venezuela's heavy crude oil to meet its fast-growing needs.
The bilateral deal will also bring in Chinese investment in housing and train projects and agricultural equipment in Venezuela.
"China is exploring for mining rights to oil reserves around the world, from the Middle East to Canada" said Tsutomu Toichi, managing director of the Institute of Energy Economics, Japan.
"Venezuela has a political feud with the US, which makes it even more sense to seek closer ties with China."
Meanwhile, Japan is watching nervously as China becomes a major player on the international scene not only politically but also economically.
Tensions have soared between the two countries since Japan last week approved a nationalist history textbook, leading to violent anti-Japanese protests in China.
Vice Finance Minister for International Affairs Hiroshi Watanabe said he had warned some of his colleagues at the IDB about the threat of Chinese economic might.
"I told them that they have to have clearer plans to split roles in the process from supplying raw materials to assembling parts, the whole of which could be dominated by China," he said.
"In a big market where countries with great growth potential and those with lower potential co-exist, Latin American countries have to proceed cautiously, or they could be swallowed or beaten."
But the researchers said Japan should not overreact to China's emerging status as a threat to its own leadership.
More than 50 percent of Chinese production is actually owned by overseas firms from Taiwan, South Korea and Japan, said Aichi University's Imai.
"Japan has been dealing with Latin America as a stepping stone for exporting to the United States," said Tani at Sophia University.
"Since the Japanese are not so actively seeking ties with Latin America, the reality is that Latin American countries are looking for other options elsewhere in Asia -- China, India and South Korea," he said.
The IDB, Latin America's main multilateral lending agency, has just welcomed South Korea, Asia's third-largest economy, as the IDB's 47th member and only the second Asian nation after Japan.
Latin American exports to Asia grew 34 percent in 2004 to reach 14 billion dollars, which helped propel the region's economic growth to 5.5 percent in 2004, its highest in two decades.
More developing...
This is not just about economics. It is China's counter-encirclement of U.S.
American investment/expansion in the region = bad, and
Chinese investment/expansion in the region = bad.
Quote:It will be interesting to see you tap-dance around this one:
American investment/expansion in the region = bad, and
Chinese investment/expansion in the region = bad.
1rudeboy: see the quote below: notice it says to buy their natural resources ( I have no problem with this..we need resources to keep our engine going) but also notice it says "to sell it's goods" Trust me, china will not shut down it's own factories and move them to latin america.
"China is searching for energy sources to feed its fast-expanding economy and for new markets to sell its goods manufactured at low production costs"
It is a logical step for China to seek its EXPORT (READ AGAIN RUDE IT SAYS EXPORT) markets in Latin America
Notice rude that it does not say "Import". I have no problem with expansion in latin america for the US as long as the containers leave the US full and come back empty.
The chinese are looking out for their own interest
So what's your problem with the U.S. selling its goods to Latin America? Why should we cede the ground to the Chinese?
What kind of reasoning is that? If we can't get empty containers to come back here, then we should let the Chinese have the market?
Quote: So what's your problem with the U.S. selling its goods to Latin America? Why should we cede the ground to the Chinese?
You are twisting my comments again. I want the US to sell to LA and i don't want see the chinese get a foothold in LA.
Quote: What kind of reasoning is that? If we can't get empty containers to come back here, then we should let the Chinese have the market?
Twisting again. I'm making the point I want to see our exports to be larger than our imports hence empty containers being brought back to the us. Again I don't want the chinese to have the markets.
I was just using that line to make a point nothing else. I have no problem with importing their items (especially resources which I pointed out earlier). Just want to see a parity between our exports and imports. You know for fact china will not import more than they export from LA.
Quit twisting. You know what I meant.
The fact is that thanks to the slack foreign policy of Clinton in the 90's the "domino theory" reversed itself and now most of Latin America is run by left-wing kooks.
Heck the most powerful South American Country, Brazil is run by one of Castro's best friends.
"This is not just about economics. It is China's counter-encirclement of U.S."
Counter-encirclement? That's rich.
As for the article, China is not leading global growth (unless you use a narrow definition and look at annual GDP growth, but the article seems to imply - or ambiguously suggest - that China is the locomotive of growth), and the U.S. has been "competing" with Europe just fine on its own. It seeks an Americas-wide trade bloc to extend its economic dominance, not simply to "compete" with the EU. (Not to mention it also already out-competes the EU with its existing trade bloc, NAFTA.)
Of course if you think the OAS is worse than China.....
I think it's important to come down firmly on all sides of the issue.
Quote: More trade with Latin America will mean less trade with China.
Why do I get the feeling that the containers coming to the US will be full but the containers going south( and to clarify with rude) shall I say "less full"
However that being said I would rather run a trade defecit with a free and democratic(for now) LA than the chinese.
Because we are the largest economy on the face of the planet? What do I win?
Give the man a prize.Now tell your buddy hedgetrimmer.
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