Chinese Engagement in Latin America and the Caribbean: Implications for US Foreign Policy. Andrew Tuck

Chinese Engagement in Latin America and the Caribbean: Implications for US Foreign Policy Jon Brandt Nicole Adams Christina Dinh Devin Kleinfield-Hay...
2 downloads 4 Views 4MB Size
Chinese Engagement in Latin America and the Caribbean: Implications for US Foreign Policy

Jon Brandt Nicole Adams Christina Dinh Devin Kleinfield-Hayes Andrew Tuck

AMERICAN UNIVERSITY SCHOOL OF INTERNATIONAL SERVICE DECEMBER 2012

Derek Hottle Nav Aujla Kirsten Kaufman Wanlin Ren

Table of Contents I.

Introduction………………………………………………………............ 3

II.

Economic Analysis……………………..................................................... 3 A. Overview……………………………………………………….......... 3 B. China’s Trade with Latin America and the Caribbean……................. 3 C. Chinese Financing……………………………………………............ 5 D. Chinese FDI………………………………………………….............. 7 E. Energy Policies and Quest for Future Energy Security….................... 8

III.

Security Analysis……………………………………………………….... 10 A. Overview…………………………………………………….............. 10 B. Traditional Security Threats………………………………………..... 11 1b. Arms Sales……………………………………………................. 11 2b. Military Exchanges……………………………………................ 11 C. Non-traditional Security Threats…………………………………..... 13 1c. Human Trafficking……………………………………………..... 13 2c. Counter-Narcotics……………………………………………….. 13

IV.

Regional Organizations in LAC and Analysis of China’s Influence......... A. Overview……………………………………………………………. B. Regional Economic and Political Organizations in LAC………........ C. Fragmentation in LAC……………………………………………..... D. China’s Increasing Role in LAC Regional Organizations……….......

V.

China’s Involvement in the Caribbean Region………………………...... 18

VI.

Conclusion……………………………………………………………….. 20

VII.

US Foreign Policy Recommendations…………………………………... A. Economic Recommendations………………………………………... B. Security Recommendations………………………………………...... C. Regional Recommendations……………………………………….....

14 14 14 15 16

20 20 20 21

VIII. Works Cited…..………………………………………………………...... 22

 



Executive Summary China’s presence in Latin America and the Caribbean (LAC) has mushroomed in the last decade. The region has experienced a dramatic increase in economic, political, military, cultural, and diplomatic ties with China. Our research indicates that while these ties do not pose an imminent threat to the United States’ national interest in the region, the China-LAC relationship should be monitored closely as these ties are likely to expand and deepen in the future. China’s emphasis on building South-South cooperation has given governments and businesses in the LAC region an alternative to the United States. While the United States is still viewed as a preferred economic partner by many LAC nations, there is evidence that US market share of LAC trade is declining while Chinese lines of credit and foreign direct investment in LAC are growing substantially. In addition, some LAC countries are experiencing increased military inter-action with China. LAC’s rising number of small arms transactions, high-level defense visits, and military student exchange programs with China should be monitored closely by the United States. We have also noted that China is interacting with LAC countries via other mechanisms such as high-level visits to the region by senior Chinese officials, the establishment of growing numbers of Confucius Institutes, the spread of Chinese media, and participation by China in LAC several regional organizations. With regard specifically to the Caribbean (often overlooked in analyses of LAC), China has expanded its presence in this region as well. China’s interests in the Caribbean are focused on acquiring raw materials, obtaining full diplomatic recognition (as opposed to recognition of Taiwan), and seeking support in international organizations. While we conclude that the dramatic expansion of China’s interests and presence in LAC warrants careful monitoring, it does not significantly threaten US national security or other interests. In our paper, we identify opportunities for trilateral cooperation among the United States, China, and the countries of Latin American and the Caribbean. Overall, we argue the United State should welcome China’s involvement in LAC by encouraging it to be a responsible and productive stakeholder. While US and Chinese interests will diverge in some sectors, this is not a cause for alarm. Engaging China multilaterally in the region can benefit not only Latin America, the Caribbean, and China, but also the United States.

 



I. Introduction China’s presence in Latin America and the Caribbean (LAC) has grown dramatically in the last decade. Its economic, political, military, cultural, and diplomatic ties with the region have mushroomed. China has become an alternative partner (to the US and Europe) for governments and business in the LAC region. However, the US is still a -- if not the -- prominent actor in the hemisphere and we do not believe China’s role in LAC threatens the US national interest. Nevertheless, there are some trends relating to China that need to be monitored closely. II. Economic Analysis A. Overview Over the past decade Chinese economic engagement with Latin America has exploded. Today China is the top trade partner of Brazil and Chile and the second largest trade partner of Argentina and Peru. We have also seen similar effects in financing and foreign direct investment in energy, natural resource extraction, and commodities. These trends should provide impetus for the US to act strategically towards China’s recent engagement with the region. The US has the opportunity work cooperatively with the Chinese in Latin America and the Caribbean and promote economic, financial and development norms. B. China’s Trade with Latin America and the Caribbean During the Obama administration, US exports to Latin America increased by more than $200 billion to $650 billion and today comprise 42 percent of overall US exports.1 This record-breaking level of exports supported 9.7 million exports-related jobs in 2011, an increase of 1.2 million exports-related jobs since 2009.2 Yet despite an increase in US exports to Latin America in dollar terms over the past decade, the US’s share of Latin American trade declined from 53 percent to 39 percent over the same period.34 China’s market share of Latin American trade grew from less than 2 percent in 2000 to 11 percent in 2010

                                                         1

According to the World Trade Atlas, US exports to Mexico dropped from 73 percent in 2000 to 48 percent in 2009, US exports to Colombia from 34 percent to 29 percent, and US exports to Argentina from 19 percent to 13 percent. 2 Fact Sheet: President Obama to Sign the Export-Import Bank Reauthorization Act of 2012, May 30, 2012, http://www.whitehouse.gov/the-press-office/2012/05/30/fact-sheet-president-obama-sign-export-importbank-reauthorization-act-2. 3 Eric Farnsworth. “Memo to Washington: China’s Growing Presence in Latin America,” Americas Quarterly, Vol. 6, No. 1, (2012): 84. 4 According to the World Trade Atlas, Mexico's imports from China increased from less than 2 percent of its total imports a decade ago to 14 percent today, Brazil's from 2 percent of Brazil's 12 percent, Argentina's 5 percent to 12 percent, Chile's from 6 percent to 13 percent, and Peru's imports from 4 percent to 15 percent.

 



Essentially, Latin American countries, which have long been big buyers of US goods, are increasingly making a larger proportion of their purchases from China.5 Assuming this trend continues, there are huge implications for US exporters and jobs. Although US exports do not necessarily compete with China’s (the United States primarily sells high technology goods such as aircraft, and medical equipment to the region, while China sells mostly apparel and consumer electronics), US exporters face the challenge of competition not only from China’s undervalued currency but also from China’s manufacturing sector.6 For example, Chinese automakers are making valuable gains in emerging auto markets by focusing less on quality and design and more on ruthless cost-cutting. These measures significantly challenge companies like General Motors that are looking to emerging markets for growth but have considerably higher sticker prices on their cars. 7 A trade agenda is one of the best tools that the US has not only to increase exports to Latin America and create jobs for American workers but also to promote a trade and investment regime that will enhance the Western Hemisphere’s economic competitiveness. While the negotiation of a Free Trade Area of the Americas (FTAA) has struggled to advance over the past decade,8 the United States could take the initiative to organize the existing 12 US Free Trade Agreements (FTAs) in the Western Hemisphere into a more coherent (and integrated) regional group. An example would be to lessen the impact of restrictive rules of origin, which can distort trade and can increase transaction costs, thus facilitating the movement of goods between countries with similar agreements. Another benefit of a regional group is an increase in scale economies, which lowers the average cost of production.9 A trade agenda also has important foreign policy implications. China’s growing economic presence in the Americas provides Latin American and Caribbean nations with additional trade and investment options that reduce US leverage to promote open market, democratic values. US efforts to promote labor and environmental reforms through trade agreements are undermined when other nations have the ability to sign similar agreements with China that do not include similar provisions.10 For example, China’s FTAs with Chile and Peru liberalize agriculture and markets for lower value-added manufactured goods but do not include deregulation and liberalization of services and investment and stronger protection of intellectual property rights.11 US FTAs seek to                                                          5

Andres Oppenheimer. “Commentary: In Latin America, US Exports are Losing Market Share,” The Miami Herald, September 6, 2010. 6 Farnsworth, “China in Latin America,” 86. 7 Keith Bradsher. “Valuable Gains for China in Emerging Auto Markets,” The New York Times, July 5, 2012. 8 J.F. Hornbeck. “US-Latin America Trade: Recent Trends and Policy Issues,” Congressional Research Service, February 8, 2011. 9 Cintia Quiliconi and Carol Wise. “The US as a Bilateral Player: The Impetus for Asymmetric Free Trade Agreements.” In Competitive Regionalism: FTA Diffusion in the Pacific Rim, edited by Mireya Solís et al. (New York: Palgrave MacMillian, 2009), 109. 10 Farnsworth, “China in Latin America,” 84.  11 Carol Wise. “China’s Free Trade Agreements in South America,” China and Latin America Economics Brief, November 12, 2012.

 



raise the economic competitiveness of both signatories through the harmonization and modernization of services and investment.12 It is worth noting that the US and Brazil have shared challenges with respect to China and can develop a common agenda on several issues.13 For example, both Brazil and the US face the challenge of competition not only from China’s undervalued currency but also from China’s manufacturing sector. In Brazil, for example, textiles, clothing, footwear, industrial machinery and equipment, and office machines have been hard hit in the domestic market. This explains the rise of anti-dumping investigations by Brazil against Chinese imports.14 In the last two months, Brazil has initiated anti-dumping investigations on Chinese carbon steel pipes, tires for motorcycles, basic refractories, and nylon yarn.15 This may provide an opportunity for the US and Brazil to pursue a common diplomatic cause to press the Chinese to allow the renminbi to appreciate against the US dollar and the Brazilian real. C. Chinese Financing China’s insatiable demand for natural resources has prompted its foreign and commercial policies to be focused on ‘going out.’ Due to China’s massive population, domestic resource constraints, environmental degradation and global creditor position, the Chinese have set out to exchange dollars for resources and diplomacy. China has begun to make notable inroads all around Latin America in the supply of credit and financing to resource-rich and credit-deficient nations throughout the region. Most of China’s loans, which have grown immensely in the past decade, are aimed at natural resource extraction. Since 2005 China has provided approximately $75 billion in loan commitments to Latin America. The China Development Bank (CDB) and Chinese Export-Import Bank (China Ex-Im) are the number one and two sources of credit respectively.16 Since 2005, China Ex-Im Bank has out-financed US Ex-Im by a factor of four, or $8 billion as opposed to $2 billion.17 As China’s loans have continued to grow, its relative influence in the region with respect to the US and Western lending institutions has grown alongside it. “As of 2010, China loaned more to Latin America than the World Bank, Inter-American Development Bank and US Ex-Im Bank combined.”18 Perhaps the most intriguing trend is to whom the Chinese are lending in comparison to western lenders’ debtors. The top recipients of Chinese loans are Venezuela, Brazil, Argentina and Ecuador in that order. Outside of Brazil, these countries are ‘non-credit                                                          12

Wise, “China’s Free Trade Agreement,” 3. Farnsworth, “China in Latin America,” 86. 14 Osvaldo Rosales. “Trade Competition From China,” Americas Quarterly, Vol. 6, No. 1, (2012): 100. 15 “Brazil: Trade Remedies – New Anti-dumping Investigations and Revisions.” Accessed November 25, 2012. http://www.mondaq.com/x/205202/Export+controls+Trade+Investment+Sanctions/Trade+Remedies+New +Antidumping+Investigations+and+Revisions 16 Gallagher, Kevin P., Amos Irwin and Katherine Koleski. “The New Banks in Town: Chinese Finance in Latin America.” Inter-American Dialogue (March 2012), 5. Accessed October 5, 2012. 17 Ibid, 7.  18 Ibid, 5. 13

 



worthy’ nations that are unable to obtain credit in international capital markets. There is a visible pattern between the loans the Chinese have provided and the natural resource, energy or other commodity extraction tied to them. Since 2007, CDB has loaned Venezuela $42.5 billion collateralized by revenue from the world’s largest oil reserves, according to data compiled by Bloomberg from announcements of deals by the Chavez government. That’s around 23 percent of all overseas loans by the state-run lender and more than the $29 billion the US spent rebuilding Iraq between 2003 and 2006. At least $12 billion was promised in the past 15 months, when stagnant oil output and the highest borrowing costs among major emerging markets would’ve made raising capital more expensive.19 Earlier in the year, China and Brazil signed a massive ten-year, $10 billion loan in which Petrobras agreed to send oil to China for a decade.20 Similar loan agreements have been with Venezuela and Argentina as China continues to leverage its position as the largest creditor in the world to ensure its energy security and deepen political ties within the region. Of the $194 billion in global lending provided to Latin America from 2005-2011, China’s contribution was just under $74 billion while the next largest contributor was the Inter-American Development Bank at $67 billion.21 The Chinese presence in Latin America, while a catalyst for growth in countries where concessional loans would otherwise not occur, has also created friction in the international community. The CDB and Ex-Im Banks are subsidized by the Chinese government, which allows them to offer credit at below market interest rates. The global arbiter for transparent, fair lending practices is the Organization for Economic Cooperation and Development (OECD), which “promotes efficient, open, stable and sound market-oriented financial systems, based on high levels of transparency, confidence, and integrity.”22 The opaque financial engineering in which the Chinese have engaged in Latin America is contradictory to OECD standards (which are largely embraced by much of the world’s financial markets). The OECD places country-risk premiums on interest rates for individual countries throughout the world, thus measuring a country’s financial risk in terms of transferability and convertibility. The risk premium reflects a country’s possibility of limiting exchange or enforcing capital controls on withdrawal or conversion of currency. China's rates consistently fall one to two percent below US and OECD rates in Latin America, creating a disadvantage for western lending institutions. "This underscores China's development model of channeling 'aid' through its Ex-Im Bank by                                                          19

Devereux, Charlie. “China Bankrolling Chavez’s Re-Election Bid with Oil Loans.” Bloomberg Finance (September 26, 2012). Accessed October 23, 2012. http://www.bloomberg.com/news/2012-09-25/chinabankrolling-chavez-s-re-election-bid-with-oil-loans.html. 20 Huang, Zhe. “China Signs $10 billion Loan-for-Oil Accord with Petrobras, Sin.com Says”. Bloomberg Finance (May 25, 2010). Accessed November 1, 2012. http://www.bloomberg.com/news/2010-0525/china-signs-10-billion-loan-agreement-with-petrobras-sina-com-says.html. 21 Gallagher, 4.  22 “Financial Markets, Insurance and Pernsions”. Organization for Economic Cooperation and  Development (2012). Accessed November 15, 2012.  http://www.oecd.org/daf/financialmarketsinsuranceandpensions/. 

 



offering 'concessional interest rates' in comparison to US rates. China Ex-Im receives subsidies from the Ministry of Finance, mixing development aid and export credits, also against OECD regulations."23 Although China’s Export-Import Bank provides below market credit, the CDB actually offers more expensive financing than western lending institutions. This seemingly counter-intuitive scheme is attributed to China’s exclusive clientele of noncredit worthy nations. These loans provide an otherwise unobtainable financial solution for the Bolivarian Alliance for the Americas (ALBA).24 This underscores China’s strategy of taking advantage of countries that cannot access international capital markets to leverage their own credit and therefore influence. Both the China Development Bank and China Ex-Im have supported a wave of Chinese business interests in the region at an essentially unbeatable cost, a major reason why Chinese trade and investment have risen so sharply over the past decade. Aside from the consequence of diminishing the influence of Western lending institutions in the region, the Chinese have also undermined environmental and labor conditions in the region by lending to and financing projects that do not meet the rigorous norms and practices that the World Bank and other international financial institutions require. In 2007, the OECD recommended that China develop standards for more prudent regulatory oversight and higher environmental standards in its overseas projects. China Ex-Im came out with its own guidelines shortly thereafter; while they are less rigorous and less comprehensive than the World Bank’s or Inter-American Development Bank's guidelines, they nevertheless reflect a change the Chinese government’s responsiveness to pressure (at least with regard to labor and environmental best practices). Given LAC’s on-going ability to attract foreign investment from a variety of countries, the US should consider launching negotiations for a hemisphere-wide agreement to establish foreign investment-related labor, environment and perhaps other norms D. Chinese Foreign Direct Investment (FDI) China, despite its staggering increase in trade with Latin America, has under-invested in the region. In fact, Chinese investment made up less than one percent of LAC FDI inflows in 2010, despite China’s constituting 11 percent of Latin America’s trade.25 As we have pointed out, China’s imports from Latin America are heavily weighted towards commodities and natural resources. While LAC has benefitted from this, the region runs the risk of an economic downturn if/when commodity and natural resource prices decline. An increase in Chinese FDI in the region should be welcomed by both Latin America and the US, but it is essential that this investment go toward value added, down stream production that will underpin sustained economic growth and ameliorate LAC’s                                                          23

Gallagher, 12. Ibid, 12.  25 “Shaping the Future of the Asia and the Pacific- Latin America and the Caribbean Relationship”. Asian Development Bank & Inter-American Development Bank. 2012. http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=36836575. 24

 



dependence on commodity and raw material exports. The Chinese economy has grown at double-digit percentages over the past three decades, amassing enormous currency reserves and up until recently maintaining a small Outward Foreign Direct Investment (OFDI) portfolio. The volume of Chinese OFDI is expected to blossom over the next decade or so. However, in the near term Chinese trade has far outpaced Chinese investment in LAC. In fact, while China accounted for nearly half of Asia’s trade with LAC in 2010, Japan continued to lead in Asian based investments despite only having 18 percent of the inter-regional trade.26 This statistic implies two overarching trends in the relationship between Latin America and Asia. Firstly, the Japanese, despite having an increasingly smaller percentage of the aggregate Asian trade with Latin America (where they had historical precedence during the 20th century), still maintain dominance in Asia-Latin America investment. Secondly, the Chinese have made impressive jumps in aggregate trade with LAC, but a lack of robust investment and preconditions for Chinese investment will hamper the development of potential new economic partnerships. China is at the tip of the iceberg with respect to the amount of outward FDI it will invest in the coming decades. The Chinese central government is seeking to diversify its assets beyond US Treasury bonds. Although Chinese OFDI remains modest with proportion to the size of its gross domestic product, it contributes over $29 billion in OFDI to Latin America, a similar quantity to Chinese OFDI in Asia and in Africa.27 China’s OFDI is estimated to reach $1 trillion over the next decade and, while it is unknown exactly where the Chinese will invest, it is important for the US to be aware of Latin America’s potential importance in China’s long-term investment strategy. E. Energy Policies and Quest for Future Energy Security   Resulting from three decades of continuous economic growth, urbanization and a massive social transformation, China is one of the world’s most important players in the LAC energy sector. However, with only one percent of the world’s proven oil reserves and the second largest in terms of consumption, the country has no option but to secure sustainable supply sources elsewhere. Countries in Latin America (especially Argentina, Brazil, Colombia, Ecuador and Venezuela) are among China’s premier investment destinations. 74% of all Chinese lines of credit to LAC is in oil loans to guarantee future energy supply and energy security.28 While China’s quest for energy security is not a direct threat to US energy security, the relationship between China and Latin American oil exporters should be closely monitored. One area of potential growth and trilateral cooperation is in renewable energy investment. Historically speaking, the United States has led the way in renewable energy investment,                                                          26

“Shaping the Future”, 18. SinoLatin Capital and the Heritage FoundationGraphic, 2012.  28 Kevin Gallagher, Amos Irwin, and Katherine Koleski. "The New Banks in Town: Chinese Finance in Latin America." Global Development and Environment Institute at Tufts University. ase.tufts.edu/gdae/Pubs/rp/GallagherChineseFinanceLatinAmerica.pdf (accessed September 20, 2012) 27

 



but over the past several years, China has made remarkable advances with a surge of new investment in and emphasis on renewable energy technology. Investments in renewable energy reached new heights in 2011, topping $257 billion, up from only $39.4 billion in 2004 (552 percent increase in eight years).29 China has surpassed the US in the volume of renewable energy investment, is second behind the EU, and is looking to expand its markets for renewable energy. China and other Asian countries have set ambitious targets for renewable energy as part of their primary energy portfolios. Government grants, subsidies and other tax incentives have prompted a wave of Chinese manufacturing in wind turbines, solar photovoltaic panels and other renewable products. For example, Chinese solar panel production has actually outpaced demand globally and the Chinese are aggressively trying to develop Latin America’s market for solar panels. Latin America provides an attractive market for Asia in the renewable sector and there is great potential to foster increased cooperation in the energy security of both regions as they strive to become less dependent on expensive and dwindling hydrocarbons. Alternative energy provides a green platform to promote closer economic ties, ultimately helping to mitigate the all-inclusive threat of climate change. Beijing and Washington have similar concerns in their energy policies and face the same set of challenges: high dependency on foreign sources of energy, rising energy-related environmental impacts, how to achieve energy conservation and efficiency, and the effect on their economies of energy price spikes. Although China and the United States do not rely on each other for energy supplies, as the two largest oil-consuming countries they are natural energy bedfellows in coping with similar challenges. They should cooperate, through joint or parallel action, to keep global energy supplies open, secure, and at an affordable price level. Both countries would win if they choose to cooperate rather than confront each other in their pursuit of energy security and efficiency. If the US and China can promote the expansion of renewable energy in Latin America, it will help exporters and producers within the US and China by expanding trade and investment opportunities throughout the LAC region. By partnering with capital-rich China and an innovative US, Latin America has the opportunity to expand its own knowledge and manufacturing base and grow its renewable energy market into one that can provide sustainable solutions for the region whose diverse climate should take full advantage of the benefits of renewable energy. The US should take the lead in coordinating trilateral trade fairs and business forums, an initiative often pursued bilaterally or intra-regionally.

                                                         29

"Who's funding the green energy revolution?" CNN.com. http://www.cnn.com/2012/06/12/world/renewables-finance-unep/index.html (accessed November 8, 2012). 

 



III. Security Analysis A. Overview The last decade has witnessed substantial growth in military relations among China, Latin America and the Caribbean region, taking the form of rising arms sales, high-level defense visits, and military student exchanges. While these developments warrant close future monitoring, they presently do not threaten US national security interests, and may even represent an opportunity for trilateral cooperation among China, the United States, and the countries of Latin America and the Caribbean. A number of high-level defense visits have occurred between China and Latin American nations.30 While these interactions have not resulted in groundbreaking bilateral strategic initiatives, they serve as confidence building measures and provide openings for arms transactions.3132 Defense visits are coupled with a rise in military personnel exchanges, which build upon China’s objectives to establish goodwill in Latin America. Chinese entities like the PLA Defense Studies Institute, Army Command College, and Navy Command School welcome officers from about 18 Latin American countries, offering Spanish and English courses on military planning, special forces operations, aerial communication, artillery repair and security strategy.33 These exchanges are supplemented with “port visits by military training ships and warships by each side.” 34In 2009, a Chinese naval flotilla visited Chile, Peru, and Ecuador and, though “benign in character, such visits benefit the PLA Navy, helping it to identify requirements for the use of Latin American ports by its ships in the future for maintenance, resupply, or other purposes.” 35Furthermore, while presently inconsequential to US interests, it is important to note that both China and Chile have military facilities located next to each other in Antarctica.36

                                                         30

In 2010 “eight clusters of visits at the Minister of Defense or Chief of Staff level” occurred between China and officials of Venezuela, Ecuador, Chile, Mexico, Brazil, Columbia, Peru, and Bolivia (Ellis 2011). In 2011, the Defense Ministers of Peru, Chile, and Bolivia traveled to Beijing. 31 For example, following the December 2011 visit to China, Bolivian Foreign Minister Carlos Romero and planning minister Viviana Caro closed a deal to buy six Chinese H425 helicopters. 32 AGENCE FRANCE-PRESSE. "Bolivian Army Buys 6 Chinese Helicopters." Defense News, December 22, 2011. http://www.defensenews.com/article/20111222/DEFSECT01/112220302/Bolivian-Army-Buys6-Chinese-Helicopters (accessed November 21, 2012). 33 Ellis, 2011. 34 Ellis, 2011. 35 Ellis, 2011. 36 Ellis, R. Evan. China in Latin America: The Whats & Wherefores. Boulder: Lynne Reinner Publishers, 2009.

 

10 

B. Traditional Security Issues 1b. Arms Sales China continues to make gains in the LAC arms market. In 2004-2007, China arms deliveries totaled $100 million. In 2008-2011, their deliveries increased to $600 million.37 Some key sales of the past decade include Karakorum (K-8) jets to Bolivia, air surveillance systems (JYL-1 radars) to Venezuela, and WMZ-551 armored personnel carriers to Argentina. Additionally, Bolivia and Ecuador have been the recipients of MA60 transport aircrafts. Another method the People’s Republic of China (PRC) has made inroads into the region is through donated materiel to Bolivia, Guyana, Jamaica, Colombia, and Peru.38 However, Chinese arms sales face certain barriers in the LAC market so that only six percent of China’s global arms sales were to LAC during the 2007-2011 period.39 Some militaries still consider Chinese weapons as inferior to Russian or Western arms. They are willing to pay a premium price for the perceived higher quality or for prestige and status considerations with non-Chinese suppliers. Additionally, many South American countries are reluctant to switch to new arms suppliers because of compatibility challenges as well as the need for retraining and new maintenance and logistics procedures.40 Latin American defense spending is forecast to grow from $63 billion in 2011 to $65 billion by 2014, with a mere 20 percent being available for procurement (the bulk of the additional funding will be going to personnel and upkeep costs).41 In this budgetary climate, only a few countries (Chile, Brazil, Venezuela) can afford equipment modernization so we do not anticipate that China will be able to grow its LAC arms market significantly. 2b. Military Exchanges The PRC’s military interests in LAC are closely aligned with its commercial objectives. Bilateral security ties build political goodwill with regional players, thus reducing the likelihood of actions against Chinese exports and investments.42 China’s economic priorities are seen in its “official system of cataloguing states as cooperative, friendly                                                          37

Richard Grimmett and Paul Kerr, “Conventional Arms Transfers to Developing Nations, 2004-2011,” Congressional Research Service, August 24, 2012. 38 Evan R. Ellis, China-Latin America Military Engagement: Good Will, Good Business, and Strategic Position. Strategic Studies Institute , 2011. http://www.strategicstudiesinstitute.army.mil/pubs/display.cfm?pubid=1077. 39 Grimmett. 40 Ellis, 2011. 41 Marcella, Gabriel. China’s Military Activity in Latin America. Americas Quarterly, 2012. 42 Ellis, R. Evan. China-Latin America Military Engagement: Good Will, Good Business, and Strategic Position. Strategic Studies Institute , 2011. http://www.strategicstudiesinstitute.army.mil/pubs/display.cfm?pubid=1077 (accessed November 21, 2012).

 

11 

cooperative or strategic partners—with the implication that this has for the allocation of economic resources.”43 China’s four “strategic partners” in Latin America - Argentina, Mexico, Brazil and Venezuela – serve as important trading partners and commodity suppliers. China’s strategic posture in the Western Hemisphere is consistent with its publically stated national security priorities. The PRC’s 2010 national defense white paper emphasizes a defensive Chinese military strategy, focusing on strengthening international military relations and countering foreign interference in domestic affairs. The paper highlights Chinese concerns about international military competition in the areas of missile defense, cyberspace, outer space, and the polar regions, while simultaneously insisting the PRC does not seek confrontation or global hegemony. While China’s ties with LAC reflect a growing desire to protect economic and security interests, the PRC is promoting cooperation which reflects “mutual trust and benefit,” not offensive measures that would directly threaten the United States. A number of high-level defense visits have occurred between China and Latin American nations.44 While these interactions have not resulted in groundbreaking bilateral strategic initiatives, they serve as confidence building measures and provide openings for arms transactions.4546 Defense visits are coupled with a rise in military personnel exchanges, which build upon China’s objectives to establish goodwill in Latin America. Chinese entities like the PLA Defense Studies Institute, Army Command College, and Navy Command School welcome officers from about 18 Latin American countries, offering Spanish and English courses on military planning, special forces operations, aerial communication, artillery repair and security strategy.47 These exchanges are supplemented with “port visits by military training ships and warships by each side.” 48 In 2009, a Chinese naval flotilla visited Chile, Peru, and Ecuador; and though “benign in character, such visits benefit the PLA Navy, helping it to identify requirements for the use of Latin American ports by its ships in the future for maintenance, resupply, or other purposes.” 49 Furthermore, while presently inconsequential to US interests, it is important to note that both China and Chile have military bases located next to each other in Antarctica.50                                                          43

De Santibañes, Francisco . "An End to US Hegemony? The Strategic Implications of China's Growing Presence in Latin America." Comparative Strategy. 28. no. 1 (2009): 23 44 In 2010 “eight clusters of visits at the Minister of Defense or Chief of Staff levels” occurred between China and officials of Venezuela, Ecuador, Chile, Mexico, Brazil, Columbia, Peru, and Bolivia (Ellis 2011). In 2011, the Defense Ministers of Peru, Chile, and Bolivia traveled to Beijing. 45 For example, following the December 2011 visit to China, Bolivian Foreign Minister Carlos Romero and planning minister Viviana Caro closed a deal to buy six Chinese H425 helicopters. 46 AGENCE FRANCE‐PRESSE. "Bolivian Army Buys 6 Chinese Helicopters." Defense News, December  22, 2011. http://www.defensenews.com/article/20111222/DEFSECT01/112220302/Bolivian‐ Army‐Buys‐6‐Chinese‐Helicopters (accessed November 21, 2012).  47 Ellis, 2011.  48 Ellis, 2011.  49 Ellis, 2011.  50 Ellis, R. Evan. China in Latin America: The Whats & Wherefores. Boulder: Lynne Reinner Publishers, 2009.

 

12 

C. Non-traditional Security Issues 1c. Human Trafficking As has been broadly reported, human trafficking in the Western Hemisphere involves China, Latin America and the United States.51 The US should work trilaterally to offer technical assistance and training to Chinese internal security and Latin American police forces through workshops and training exercises. Bringing together police and tactical units from all three countries for training and information exchange would improve relations among all three partners, creating the likelihood of improved communication among these agencies and disruption of the transpacific trafficking that affects all parties. 2c. Counter-Narcotics The network among China, Latin American drug producers, and the US has been growing consistently in recent years. The 2011 International Narcotics Control Strategy Report (INCSR) conducted by the US Department of State pointed out that “China is a major manufacturer of ‘dual use’ chemicals, primarily used for licit products, but also diverted by criminals.52 In particular, China is a major source of the precursor chemicals necessary for the production of cocaine, heroin, and crystal methamphetamine. Organized crime or criminal brokers divert these legitimately manufactured chemicals, especially ephedrine and pseudoephedrine, from large chemical industries throughout China to produce illicit drugs.” In addition, the UN Office on Drug and Crime’s annual World Drug Report 2012 states: “The problem was most acute in the United States: organized criminal groups became involved in smuggling heroin from China and Turkey into that country.” The Department of Defense wrote a substantial report on Chinese shipments of meth chemicals to the United States in September 2012. That report cites the US Drug Enforcement Administration: “About 80 percent of the meth in the United States is now made in Mexico mainly using Chinese ingredients shipped across the Pacific.” US authorities believe that, due to weak Chinese government regulation of its chemical manufacturing and export sector, traffickers have developed a production process that can use up to 30 common chemical ingredients legally shipped from China. In fact, the INCSR report did recognize China’s efforts to strengthen its chemical and drug control system but they have been inadequate. We recommend that the U.S. develop with China and Mexico a tripartite database covering Chinese chemical exports and Mexican regulation; this should facilitate Mexican and U.S. interdiction strategies.

                                                         51

"Trafficking in Persons Report 2012." US Department of State. http://www.state.gov/j/tip/rls/tiprpt/2012/index.htm (accessed October 6, 2012).  52 2012 International Narcotics Control Strategy Report, Volume I: Drug and Chemical Control, Bureau of International Narcotics and Law Enforcement Affairs, US Department of State. http://www.state.gov/j/inl/rls/nrcrpt/2012/vol1/184098.htm#China. 

 

13 

IV. Regional Organizations in LAC and Analysis of China’s Influence A. Overview Regional integration has long been a priority of the LAC region. However, the proliferation of regional organizations has created overlapping objectives and conflicting views as to how the integration process should proceed. The lack of a common strategy in LAC coupled with the uneven pace of growth throughout the region and the increasingly significant global role of China has weakened the role of these organizations.53 In an effort to narrow the political differences and competing economic visions in the region, LAC leaders joined in December 2011 to form the Community of Latin American and Caribbean Nations, or CELAC, which excludes both the US and Canada. To better understand why CELAC was created, it is necessary to examine these existing regional structures in LAC, the varied economic growth among countries, and China’s expanding role in these regional bodies. B. Regional Economic and Political Organizations in LAC CELAC exists among a plethora of regional entities in LAC. These regional institutions were formed with the objective of deepening economic and political ties throughout the region. However, as demonstrated in Table 1, intra-trade levels among these groupings are low. These levels are low in comparison to other global intra-trading blocs, such as the European Union (EU), of which intra-regional trade accounts for 68 percent.54 Table 1. Destination of Exports from Principal Sub-regional Integration Groups in Latin America (% of total exports)55 Exporting Group Latin America MERCOSUR CAN

Intra-regional 1995 19.3 20.5 12.1

2008 12.1 14.9 7.4

Additionally, the proliferation of these regional organizations in LAC has added to political distrust and encouraged competing political agendas instead of uniting and deepening political ties throughout the region. This dynamic is exemplified through UNASUR and ALBA, which offer two different alternative regional paths to integration. Brazil has been the driving force of UNASUR and Venezuela is the prominent actor in ALBA, offering an alternative regional path to integration in opposition to neo-liberalism and globalization.                                                          53

Michael Shifter, February 2012, The Shifting Landscape of Latin American Regionalism, Current History pp. 56-61. 54 Alejandro Foxley, 2012, Regional Trade Blocs: The Way to the Future? Carnegie Endowment for International Peace. 55 Ibid. 

 

14 

C. Fragmentation in LAC While it still may be premature to analyze the success of some of these newer regional organizations, the existing regional institutions, which represent an array of competing economic and political visions for the region, have created a fragile structure in LAC. Coupling these existing schisms with the uneven pace of growth throughout the region has further increased vulnerabilities. Between 2002 and 2011, LAC experienced strong growth performance with average GDP per capita increasing by almost 25 percent. However, countries throughout the region have not shared this growth equally. Contributing to the pronounced differences in economic performance were the quality of macroeconomic policies, the degree of trade and financial integration, and the availability of natural resources.56 The economic differences that exist between US-linked countries and the more China-influenced countries are most notable. States like Mexico, Colombia, and Chile are forecast to enjoy solid levels of economic growth, while both Venezuela and Argentina will likely suffer from economic contraction.57 Chart 1. Latin America Regional GDP Growth58

Commodity price adjustments are eroding terms of trade in several LAC economies, causing them to experience widening current account deficits. LAC commodities exports account for 70 percent of the region’s growth in exports.59 The economies with worsening trade positions include: Brazil, whose deficit will be $74 billion by the end of 2013; Mexico, which has yet to implement structural reforms needed to diversify fiscal revenue sources away from oil-linked exports; Venezuela, whose oil profits account for                                                          56

Latin American and the Caribbean’s Long-Term Growth: Made in China?, September 2011, World Bank LAC. 57 Pablo F.G. Bréard, July 2012, Latin America Regional Outlook, Global Economic Research, Scotiabank. 58 Ibid.  59 K.P. Gallagher & R. Porzecanski, 2009, China and the Latin America Commodities Boom: A Critical Assessment, Political Economy Research Institute, University of Massachusetts Amherst.

 

15 

half the nation’s total revenue; Peru, Chile, and Uruguay which are sensitive to commodity prices and experiencing increased deficits.60 Additionally, those countries largely connected to China are experiencing capacity constraints and thus experiencing increased inflation.61 These adverse effects are the result of the heavily commoditydependent trading relationship these LAC countries have with China. This is of concern to the US because if the positions of LAC economies continue to worsen, LAC purchasing power will decrease, potentially reducing demand for US goods. Chart 2. Latin America Current Account Balance62

D. China’s Increasing Role in LAC Regional Organizations In addition, China’s involvement with the region’s organizations has also increased. In its policy paper on Latin America and the Caribbean, China acknowledged its strengthening of exchanges with political parties and organizations of LAC countries and announced China will continue this pattern of engagement in regional and sub-regional organizations as a means for promoting “regional solidarity, development and integration.”63 In the paper, China also stated it is ready to work with LAC countries to strengthen the United Nations by upholding the rights and interests of developing countries. China has maintained close contacts and dialogue with many of the regional organizations of LAC, including the Group of Rio, the Andean Community (CAN), and the Southern Common Market (MERCOSUR). China was admitted as a permanent observer to both the Organization of American States (OAS) and the Latin American Parliament in 2004. China’s financial contributions as an observer to the OAS have been                                                          60

Pablo F.G. Bréard, July 2012, Latin America Regional Outlook, Global Economic Research, Scotiabank. Latin American and the Caribbean’s Long-Term Growth: Made in China?, September 2011, World Bank LAC.  62 Pablo F.G. Bréard, July 2012, Latin America Regional Outlook, Global Economic Research, Scotiabank. 63 “China’s Policy Paper on Latin America and the Caribbean Region,” November 5, 2008, Xinhua.  61

 

16 

modest; between 2005 and 2011 China’s total contributions equaled $1,289,390. China donates money to a number of social programs and departments; its priorities are strengthening multi-dimensional security, protecting women’s rights, promoting democracy and outreach activities, and advancing integral development. In 2008, China became a member of the IDB and has contributed $350 million to various programs. These include funds for special operations (including soft loans to some of the region’s poorest countries), strengthening the institutional capacities of states, and equity funds administered by the Inter-American Investment Corporation (IIC). China and the Caribbean have hosted three meetings of the China-Caribbean Economic and Commercial Cooperation Forum, the highest level of dialogue between the two sides on facilitating trade and economic cooperation for common development. Additionally, there have been six meetings of the China-Latin America Business Summit, a promotion mechanism and platform for economic and trade cooperation focused on key issues affecting China and LAC business. One event of the 5th China-Latin America Business Summit resulted in $10 million worth of proposed contracts, and more than 1,100 entrepreneurs attended the 6th Summit.64 It is also worth noting that China and 18 Latin American countries participated in the East Asia-Latin American Cooperation Forum and that China, Mexico, Chile and Peru are members of APEC (Asian-Pacific Economic Cooperation).65 Earlier this year Chinese Premier Wen Jiabao visited Brazil, Uruguay, Argentina and China in an effort to boost bilateral ties and enhance South-South cooperation. During this trip, China and Brazil signed a 10-year cooperation plan66, which will focus on industries including innovation, space, energy, and education.67 Additionally, the premier proposed establishing the China-Latin America cooperation forum beginning in 2013, which would create an entity to deepen cooperation between China and the region.68 Details have not yet been developed. China’s rising influence presents the states in the region with an alternative to the US model and an alternative to US businesses. The 2011 creation of CELAC, which seeks to create a united voice for LAC, is an example of this. Diplomatic links have now been formalized between CELAC and China and China has offered CELAC $5 billion in economic cooperation and $10 billion in loans for infrastructure development.69 As organizations such as CELAC or UNASUR look to expand their reach, they will continue to partner with China.                                                          64

Business Matchmaker at the China-Lac Business Summit Estimated to Reach $10 Million, October 29, 2012, Mybusinessmatches.com. 65 China Hoy, June 2011, Greater China Latin America Global and Regional Cooperation. 66 Specific goals of this cooperation plan were not publically identified during the announcement; this is typical of Chinese diplomacy. 67 Roundup: Chinese premier’s visit enhances China-Latin America ties, cooperation, June 28, 2012, Xinhua News Agency – CEIS. 68 Latin American and the Caribbean Requires Quality Social and environmental Investment, October 4, 2012, ECLAC. 69 Regional Organization CELAC Forges Links with China and India, August 11, 2012, MSNBC. 

 

17 

Analysis shows that China’s influence in these organizations has been mostly benevolent and, rather than a source of alarm, should be an area for cooperation with the United States. Increased Chinese investment in the OAS and IDB will allow these organizations to function more efficiently. Likewise, this will help force China into becoming a responsible shareholder in the region; as China continues to engage with Latin America, it will be subject to the standards already put in place by the regional organizations. . V. China’s Involvement in the Caribbean Region China has expanded its economic relations with the Caribbean via an increase in both trade and development assistance. China provided $1.5 billion in development aid to the Caribbean in 2002;70 by 2011 it increased to $6.3 billion.71 This compares with U.S aid of $0.57 billion in 2011 and in 2013 it will decrease to $0.49 billion. There is an emerging pattern of new institutional arrangements between China and the Caribbean region; they include the China-Caribbean Economic and Trade Cooperation Forum (2005); consultations between the Ministry of Foreign Affairs of China and the foreign ministers of the nine Caribbean Countries with formal diplomatic relations with the PRC; and a potential “China-Latin American Cooperation Forum” that is quite similar to the existing “China-Africa Cooperation Forum.” China’s interest in the Caribbean is based on the following national interests:  Strengthening PRC linkages with Caribbean countries against Taiwan. Currently the Republic of China (Taiwan) has formal diplomatic relations with 12 countries in the LAC region. Even though the cross-strait relationship has been significantly improved since 2008, Taiwan and the PRC remain major diplomatic competitors so Beijing pays close attention to Taiwan’s international space.  Acquiring raw materials such as bauxite, Trinidad Lake asphalt, and the possibility of discovering oil and mineral deposits in the vast expanses of Guyana as well as unexplored undersea resources of the Caribbean Sea. [China’s largest source of asphalt is Trinidad-Tobago, in 2011 purchasing $1 billion worth.] However, access to raw materials is a secondary motivation for China’s involvement in the Caribbean region due to the limited quantity of those resources when compared with Chile, Venezuela and Brazil.

                                                         70

Richard Bernal, The Dragon in the Caribbean: China – CARICOM Economic Relations, The Round Table, Vol. 99, No. 408, June 2010,p. 284. 71 New York Times, China Buys Inroads in the Caribbean, Catching US Notice, April 7, 2012. http://www.nytimes.com/2012/04/08/world/americas/us-alert-as-chinas-cash-buys-inroads-incaribbean.html?pagewanted=all. 

 

18 

The CARICOM countries and the region as a whole have become less important to the United States since the end of the Cold War. This is reflected in the very substantial reduction in US development assistance to CARICOM countries. Therefore, the Caribbean countries are more likely to seek alternative support to meet their economic development demands, and China has stepped in at this moment. In the Caribbean China engagement is largely driven by a search for commodities, longterm economic ventures, and potential new allies that are relatively inexpensive to win over. Similarly, Caribbean countries’ pursuit of a greater international voice and support in multilateral diplomacy encourages it to cooperate closely with China. One Caribbean issue to focus on is tax havens. Some islands in the Caribbean are renowned international offshore financial centers with low taxes and loose regulations many Chinese companies take advantage of this. The British Virgin Islands (BVI) is a typical example. China has become the BVI's biggest foreign investor and BVI companies accounted for about US$10.5 billion of new foreign direct investment into China, or 10 per cent of the total FDI in 2010. Many Chinese companies set up branches in BVI and transfer their income from international/domestic markets to BVI, then bring money back to China as a type of FDI from BVI. By doing so, Chinese companies can successfully avoid higher taxation within China. The Department of State’s 2011 International Narcotics Control Strategy Report (INCSR)72 states “most money laundering cases currently under investigation involve funds obtained from corruption and bribery.” US law enforcement agencies note that the Government of China has not cooperated sufficiently on financial investigations and does not provide adequate responses to requests for financial information. In addition, since some countries are suspicious of Chinese investment, particularly in mining, telecommunication and infrastructure sectors, Australia and the US have rejected some Chinese SOEs’ investment projects due to security concerns. Chinese companies can avoid such suspicions by setting up a branch at BVI and do the same investment under I s BVI registered name. According to a Chinese lawyer’s argument, some Chinese SOEs are already conducting their mining investment in Australia following this method.

                                                         72

2012 International Narcotics Control Strategy Report, Volume II: Money Laundering and Financial Crimes, Bureau of International Narcotics and Law Enforcement Affairs, US Department of State. http://www.state.gov/j/inl/rls/nrcrpt/2012/vol2/184115.htm#China.

 

19 

VI. Conclusion China’s ties with Latin America and the Caribbean are likely to deepen in the future. The US should welcome China’s involvement in the region by encouraging it to be a responsible and productive partner. While Chinese and US interests will diverge in some sectors, this is not a cause for alarm. The US has broad economic, security, cultural, and historical ties with the countries of the region and it must continue to nurture these connections in order to maintain its influence. Engaging China multilaterally in the region can benefit not only Latin America, the Caribbean, and China, but also the United States. VII. US Foreign Policy Recommendations A. Economic Recommendations • • • •

The United States should continue TPP negotiations. The United States should seek to resume negotiations on an FTAA. Organize the US’ existing FTAs into a more integrated bloc by reducing existing constraints that slow the growth of trade. Negotiate a bilateral tax treaty with Brazil and other interested countries to encourage cross-border investment. The United States should promote joint cooperative projects on green energy with China and Latin America.

B. Security Recommendations •







The United States should organize a joint humanitarian mission between USNS Comfort and China’s Peace Ark to be undertaken in Latin America and the Caribbean. This mission would build confidence between the United States and the People’s Republic of China while also increasing transparency within the PLAN’s activities in LAC. The United States, China and LAC should create a joint peacekeeping research center at the PLA National Defense University and at the US National Defense University with Chinese and Latin American participants. The United States should propose launching an annual U.S.-China-LAC emergency relief exercise to organize and prepare for common disaster mitigation efforts. This would significantly enhance LAC’s inadequate disaster management capacity. In addition, since the PLA is directly involved in disaster response (Chinese disaster relief teams consist of PLA personnel, medical personnel, and earthquake experts), increased cooperation could facilitate greater military interaction and transparency. The United States should invite China to participate in SOUTHCOM’s Trade Winds exercise in the Caribbean.73

                                                         73

The exercise involves OECS nations and American agencies including the Coast Guard, Marine Corps, FBI and Air Force. The objectives of the exercise already include joint training, countering transnational

 

20 







The United States should offer technical assistance and training to Chinese internal security and Latin American police forces through workshops and training exercises to deal more effectively with human trafficking. . The United States should work with China and Latin American drug enforcement counterparts to develop an improved data base and tracking system for precursor chemicals. The United States should develop trilateral training programs to combat drug crime.

C. Regional Recommendations • •

The United States and China should create a joint investment fund for LAC within organizations present in the region, such as the IDB. The United States should continue to work with China on issues of money laundering, offshore financial crimes, and anti-corruption through existing bilateral and multilateral mechanisms. It should negotiate with China the development of a money transfer monitoring system in order to effectively monitor money laundering in offshore financial criminal activities. The Financial Action Task Force (FATF) is an ideal vehicle for China and United States cooperation in this regard.

                                                                                                                                                                      crime, building disaster response capability, and increasing multinational security operational capacity – underscoring areas of desired cooperation between China, Latin America, and the United States.

 

21 

VIII. Works Cited 2012 International Narcotics Control Strategy Report, Volume I: Drug and Chemical Control, Bureau of International Narcotics and Law Enforcement Affairs, US Department of State. http://www.state.gov/j/inl/rls/nrcrpt/2012/vol1/184098.htm#China. 2012 International Narcotics Control Strategy Report, Volume II: Money Laundering and Financial Crimes, Bureau of International Narcotics and Law Enforcement Affairs, US Department of State. http://www.state.gov/j/inl/rls/nrcrpt/2012/vol2/184115.htm#China. Bernal, Richard. The Dragon in the Caribbean: China – CARICOM Economic Relations, The Round Table, Vol. 99, No. 408, June 2010 Bradsher, Keith. “Valuable Gains for China in Emerging Auto Markets,” The New York Times, July 5, 2012. Bréard, Pablo F.G. July 2012, Latin America Regional Outlook, Global Economic Research, Scotiabank. “Brazil: Trade Remedies – New Anti-dumping Investigations and Revisions.” Accessed November 25, 2012. http://www.mondaq.com/x/205202/Export+controls+Trade+Investment+Sanctions/ Trade+Remedies+New+Antidumping+Investigations+and+Revisions. "Bolivian Army Buys 6 Chinese Helicopters." Defense News, December 22, 2011. http://www.defensenews.com/article/20111222/DEFSECT01/112220302/BolivianArmy-Buys-6-Chinese-Helicopters (accessed November 21, 2012). Business Matchmaker at the China-Lac Business Summit Estimated to Reach $10 Million, October 29, 2012, Mybusinessmatches.com. China Hoy, June 2011, Greater China Latin America Global and Regional Cooperation. "China issues white paper on energy policy." Xinhua | English.news.cn. http://news.xinhuanet.com/english/china/2012-10/24/c_131927587.htm (accessed November 5, 2012). Choudaha, Rahul, and Li Chang. "Trends in International Student Mobility." WES Research and Advisory Services. https://www.wes.org/ras/TrendsInInternationalStudentMobility.pdf (accessed October 31, 2012).

 

22 

De Santibañes, Francisco . "An End to US Hegemony? The Strategic Implications of China's Growing Presence in Latin America." Comparative Strategy. 28. no. 1 (2009). Devereux, Charlie. “China Bankrolling Chavez’s Re-Election Bid with Oil Loans.” Bloomberg Finance (September 26, 2012). Accessed October 23, 2012. http://www.bloomberg.com/news/2012-09-25/china-bankrolling-chavez-s-reelection-bid-with-oil-loans.html. Ellis, R. Evan. China in Latin America: The Whats & Wherefores. Boulder: Lynne Reinner Publishers, 2009. Ellis, R. Evan. "Chinese Soft Power in Latin America: A Case Study." Joint Force Quarterly 60 (2011): 85-91. http://www.ndu.edu/press/lib/images/jfq60/JFQ60_85-91_Ellis.pdf (accessed November 12, 2012). Ellis, R. Evan. China-Latin America Military Engagement: Good Will, Good Business, and Strategic Position. Strategic Studies Institute , 2011. http://www.strategicstudiesinstitute.army.mil/pubs/display.cfm?pubid=1077 (accessed November 21, 2012). Fact Sheet: President Obama to Sign the Export-Import Bank Reauthorization Act of 2012, May 30, 2012, http://www.whitehouse.gov/the-pressoffice/2012/05/30/fact-sheet-president-obama-sign-export-import-bankreauthorization-act-2.  Farnsworth, Eric. “Memo to Washington: China’s Growing Presence in Latin America,” Americas Quarterly, Vol. 6, No. 1, (2012).  “Financial Markets, Insurance and Pernsions”. Organization for Economic Cooperation and Development (2012). Accessed November 15, 2012. http://www.oecd.org/daf/financialmarketsinsuranceandpensions/. Foxley, Alejandro, 2012, Regional Trade Blocs: The Way to the Future? Carnegie Endowment for International Peace. ”Full Text” of China’s policy paper on Latin America, Caribbean region, November 5, 2008, BBC. Gallagher, Kevin, Amos Irwin, and Katherine Koleski. "The New Banks in Town: Chinese Finance in Latin America." Global Development and Environment Institute at Tufts University. ase.tufts.edu/gdae/Pubs/rp/GallagherChineseFinanceLatinAmerica.pdf (accessed September 20, 2012).

 

23 

Gallagher K.P. & Porzecanski R., 2009, China and the Latin America Commodities Boom: A Critical Assessment, Political Economy Research Institute, University of Massachusetts Amherst. "Global Flow of Tertiary-Level Students." UNESCO Institute for Statistics. http://www.uis.unesco.org/Education/Pages/international-student-flow-viz.aspx (accessed October 29, 2012). "Global Trends in Renewable Energy Investment 2011." United Nations Environment Programme and Bloomberg New Energy Finance. www.unep.org/pdf/BNEF_global_trends_in_renewable_energy_investment_2011 _report.pdf. Grimmett, Richard and Paul Kerr, “Conventional Arms Transfers to Developing Nations, 2004-2011,” Congressional Research Service, August 24, 2012. "Hanban (Confucius Institute Headquarters) 2010 Annual Report." www.hanban.edu.cn/report/pdf/2010_final.pdf (accessed October 15, 2012). Hearn, Adrian H., and José Luis. León. China engages Latin America: tracing the trajectory. Boulder, Colo.: Lynne Rienner Publishers, 2011. Huang, Zhe. “China Signs $10 billion Loan-for-Oil Accord with Petrobras, Sin.com Says”. Bloomberg Finance (May 25, 2010). Accessed November 1, 2012. http://www.bloomberg.com/news/2010-05-25/china-signs-10-billion-loanagreement-with-petrobras-sina-com-says.html. Hornbeck, J.F. “US-Latin America Trade: Recent Trends and Policy Issues,” Congressional Research Service, February 8, 2011. Latin American and the Caribbean’s Long-Term Growth: Made in China? September 2011, World Bank LAC. Latin American and the Caribbean Requires Quality Social and environmental Investment, October 4, 2012, ECLAC. Marcella, Gabriel. China’s Military Activity in Latin America. Americas Quarterly, 2012. New York Times, China Buys Inroads in the Caribbean, Catching US Notice, April 7, 2012. http://www.nytimes.com/2012/04/08/world/americas/us-alert-as-chinascash-buys-inroads-in-caribbean.html?pagewanted=all. "Office to Monitor and Combat Trafficking in Persons." U.S. Department of State. http://www.state.gov/j/tip/ (accessed October 6, 2012).

 

24 

Oppenheimer, Andres. “Commentary: In Latin America, US Exports are Losing Market Share,” The Miami Herald, September 6, 2010. People.com.cn. "Lay down Development Plan and Cultivate Local Teaching Force – Mdm. Xu Lin, Director-General of Hanban, Provides Insights into the Sustainable Development of Confucius Institutes." Harban News. english.hanban.org/article/2012-08/17/content_455435.htm (accessed October 12, 2012). Quiliconi, Cintia and Carol Wise. “The US as a Bilateral Player: The Impetus for Asymmetric Free Trade Agreements.” In Competitive Regionalism: FTA Diffusion in the Pacific Rim, edited by Mireya Solís et al. (New York: Palgrave MacMillian, 2009). Regional Organization CELAC Forges Links with China and India, August 11, 2012, MSNBC. Ren, Zhe . "The Confucius Insitutues and China's Soft Power." Institute of Developing Economies. 202.244.105.132/English/Publish/Download/Dp/pdf/330.pdf (accessed November 1, 2012). Ribando, Clare. "HumanTrafficking.org, Publications: Trafficking in Persons in Latin America and the Caribbean." HumanTrafficking.org: A Web Resource for Combating Human Trafficking in the East Asia Pacific Region. http://www.humantrafficking.org/publications/487 (accessed October 6, 2012). Ribando, Clare. "Trafficking in Persons in Latin America and the Caribbean." Federation of American Scientists. www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&ved =0CDsQFjAB&url=http%3A%2F%2Fwww.fas.org%2Fsgp%2Fcrs%2Frow%2F RL33200.pdf&ei=2VmyUNXXKqe0QGt24Fo&usg=AFQjCNFoSeG16NpYKF9Cai1oywCwBYeKdw (accessed October 6, 2012). Rodham Clinton, Hillary. "Release of the 2012 Trafficking in Persons Report." U.S. Department of State. http://www.state.gov/secretary/rm/2012/06/193368.htm (accessed October 6, 2012). Rosales, Osvaldo. “Trade Competition From China,” Americas Quarterly, Vol. 6, No. 1, (2012). Roundup: Chinese premier’s visit enhances China-Latin America ties, cooperation, June 28, 2012, Xinhua News Agency – CEIS. "Shaping the Future of the Asia and the Pacific–Latin America and the Caribbean Relationship." Asian Development Bank, Inter-American Development Bank, and

 

25 

Asian Development Bank Institute. idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=36836575 (accessed October 3, 2012). Shifter, Michael. February 2012, The Shifting Landscape of Latin American Regionalism, Current History. "Trafficking in Persons Report 2012." US Department of State. http://www.state.gov/j/tip/rls/tiprpt/2012/index.htm (accessed October 6, 2012). JTIP 2012 Report_FINAL_LoRes_061512.pdf "Who's funding the green energy revolution?" CNN.com. http://www.cnn.com/2012/06/12/world/renewables-finance-unep/index.html (accessed November 8, 2012). Wise, Carol. “China’s Free Trade Agreements in South America,” China and Latin America Economics Brief, November 12, 2012.

 

26