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.
LOL! From the guy that would rather be red than dead.
From one of the guys who wants to nuke China now? ROFLMAO!!
If we nuke China now, whatever will Wal-Mart do? Oh, that's right, it'll find the cheapest vendor. [thinking out loud]
FYI, I never said the above. When these assclowns were talking about nuking China, now, I asked, "Better dead than red?"
I guess their answer is "Better dead than a trade deficit with China."
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