China is good news for Latin America
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With China there is genuine complementarity and cooperation. Latin America has been able to canalize its natural resources toward a Chinese economy that seems insatiable. The region is today the most important source of petroleum, gas and other natural resources, which are crucial to China's energy viability.
In return - the Chinese appetite for the region's commodities has turned into a great financial source for Latin America. Nothing reflects this better than China's relentless investments in the region. Over the last two years, Latin America has been the beneficiary of 50 percent of the $50 billion Chinese overseas investment.
China is also good news as a source of the much needed development loans. This was especially important during the worst phase of the global economic crisis. China gave massive development loans to several Latin American countries that were facing weak economic growth, a fall in prices of commodities and restrictions in access to credits. Examples abound. About round $1.7 billion went to Venezuela.
These significant loans are not just good news, but also indicate China's deep and long-term commitment to Latin America. And if long-term investment and trading is any indication, China is ticking all the right boxes. Take for example the Chinese investment in the oil industry. It has rapidly expanded from Venezuela and Brazil to Bolivia, Paraguay, Colombia, Ecuador and Argentina in natural gas.
In terms of trade and cooperation, Brazil and Argentina are good examples of this new scenario. China has become Brazil's largest trading partner, overtaking the US. And Argentina, another powerhouse in the region, has benefited from China's investment that will allow this Andean country to pay for its imports.
The good news is also the Chinese model of strategic partnership and common development. This is clearly reflected in the technology transfer and integrated development approach taken by China in Latin America (and in other developing economies). China is keen to "teach" Latin Americans how to do things and improve technologies, especially in the area of natural resource exploration and exploitation - from Venezuela's oil technicians to Cuba's electrical white-collar workers.
Once again this is a model that Latin American countries were not used to. The US model was highly predatory. Washington went, exploited and left. In contrast, China stays and associates with local private and public enterprises in developing infrastructure and technological advancement.
This is the key point and perhaps the best news of all - China's model is not in search of a quick quid. It is a model that puts emphasis on building a solid technical foundation for economic growth. This is by all account a long-term commitment and partnership. This is precisely what Latin American leaders are seeking from China, a country that has, hopefully, become the new engine of the region's economic growth and wealth.
The author is a journalist and academic associated with the University of Sydney, Australia.
