Sunday, August 23, 2009

The red invasion- China's Caribbean and Latin American policy!

China is on a fast march towards the Caribbean and Latin America. As China emerges as a global leader and lender, the Caribbean and Latin American region can benefit significantly from Chinese investments.

Neglecting the geo-political manoeuvring over Taiwan and gaining votes in the U.N., the main and direct issue for the Caribbean and Latin America, being within the USA's sphere of interest and with culturally engrained social and left leaning tendencies in South America, at least, is that China may be seen as a catalyst that would encourage communist revolution, to the extent to which it will make the Bolivarian dream seem as a mere afterthought. But, is this train of thought applicable and does China want, itself, to trade with more communist like countries?

For the most part, a stark issue for consideration is how in fact China reconciles outward investment from the underpinning of a national communist infrastructure. It seems paradoxical to suggest that a communist state can, in turn, make capitalist type investments in organizations and countries. But, such has China done.

Also, as China emerges as an economic power house- with growth slated over 8% currently- it most obviously understands that that economic engine is not powered by communism, as much as the political directorate in China seems to be tethered to its ideology.

In saying that, China's actions towards its partners with regard to adhering to western style rules and regulations with respect to market access and competition, has been most capitalistic and in fact, nothing seems communist about it at all aside from the issue that it's national corporations are monopolies run by the communist government.

With regard to the World Trade Organization and other Asian regional trade bloc's, like their participation with the Association of Southeast Asian Nations (ASEAN) and their membership in the Asia-Pacific Economic Cooperation (APEC), China has effectively circumvented its commonly understood national economic policy, to now become integrated into the global arena, where communism, for the most part, is certainly not a normal practice with its trading partners. In fact, China's largest trading partner and one in which they seek the most value, by far, is the USA.

In any event, for the Caribbean and Latin America, the Chinese government has produced a policy paper, directed at providing the region with China's strategic plan for partnerships and investments. The plan - as with most foreign policy directives- hinges on investment and social support as well as providing additional lending.

Sebastian Castaneda, Research Fellow at the Council of Hemispheric Affairs (COHA) in a commentary released on the Caribbean Net News, made mention of an initial investment of $350 million USD made by China to the Inter-American Development Bank. Additionally in his report, he stated that China has already facilitated a currency swap with Argentina to the tune of $9 billion USD. In a separate report by the Financial Times of London, China has inked a $1 billion dollar oil deal with Ecuador.

The policy is clear, to the extent that we see an investment focus for China's domestic consumption and offering a credit option to Caribbean and Latin American partners. But, what about the social support and development through shared cultural values? The social development aspect is always the most important and the least focused on dynamic when it relates to partnerships between entities.

This brings up a critical issue as it relates to China's track record with respect to the social development of its own country, let alone its partners.

In fact, China has not only been confronted their "human rights" record within China, but also on their investment policy and strategy within resource rich Africa, to the extent to which certain established Euro-centric organizations have felt the need to address their concerns for their own respective development initiatives within the African region, to that of China's involvement and how that may impact or negatively alter the significant work conducted on behalf of Africa, especially on Sub-Saharan African development- political, economic and social.

With the former, as much as it may be painful to witness these issues play themselves out, by some who may or may not be over-reacting to the birth pangs of a rapidly growing China, to the extent that they are birth pangs and are the normal manifestations of a power struggle in the middle of a balance of power political mainframe, is something that China must and will undergo- as all countries do- under a currently changing market economic model, which does and will continually influence the decisions of the political directorate, towards more equitable and stable solutions.

With regard to the latter, the main thrust of the claim has been that China has neglected every obligation for reform within Africa and has gone at engagement from a purely cost/benefit approach towards achieving a certain result and bottom line. With the weak democratic institutions in Africa, for the most part, we can appreciate the need for a coordinated strategy from all sides as to not disrupt the progress being made by external government's, non-governmental agencies and African government's themselves.

The issues with Chinese-African-Euro relationships may or may not be a true concern to that of the Caribbean and Latin America. For the most part in South America, at least, left leaning government's or left leaning supporters, are larger in numbers than that in the Caribbean. Secondly, while this may indicate that there is fertile ground to foment a communist uprising in Latin America, to the extent to which this is a Chinese directive for it to be a catalyst for that uprising, hasn't been proven or even thoroughly analyzed to show in any way that this is an intended outcome- especially with China's stance to it's regional partners and more importantly to their forays in Sub-Saharan Africa.

Also, the progress to which Latin America has made with respect to building democratic institutions, even in Venezuela and with minor exception for Cuba- with even the latter taking small steps towards reforming the current state structures- there is little notion that there will be massive communist regimes building at the USA's back door.

On all sides, the benefits from democracy and capitalism as they relate to providing freedoms to individuals and building prosperity, is evident.

China, as far as their track record is concerned, is as much interested in spurring governmental attitude changes through exporting social values at the same time as they attempt to strengthen social safety nets through communist principles they employ at home, as we are with China's policies as it relates to anything else but lending and investment facilities for the region.
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