China’s Xi Jinping is the latest leader to tour Latin America, offering yet another sign that Asia’s growing economies are increasingly looking to challenge the United States’ long-running economic dominance in the region.
The Chinese president stopped by four different countries during his eight days in Latin America in an effort to boost trade and strengthen ties between China and several strategic economic partners in the region.
The visit was Xi’s first to these countries since taking office — a 2013 trip focused on Central America and Mexico, rather than the southern continent. The region is a key market for China, which saw two-way trade with Latin America increase to $262 billion last year.
Xi arrived in Brazil for the BRICS conference on July 15, where the leaders of the five BRICS nations — Brazil, Russia, India, China and South Africa — met with South American heads of state to discuss economic policy, trade and development. The leaders also announced the creation of the New Development Bank, a fund aimed at counterbalancing the U.S.- and Europe-dominated World Bank and International Monetary Fund.
See also: BRICS summit opens in Brazil
Following the summit, Xi met with President Dilma Rousseff to sign a number of finance, energy and business agreements, including one for the sale of 60 passengers jets to China and another that will provide $7.5 billion of financing for a Brazilian mining company. The two nations are also studying the possibility of building a railroad that would connect Brazil’s Atlantic coast with the Pacific coast in Peru. China is Brazil’s largest trading partner, with trade between the two countries reaching $83.3 billion in 2013.
Brazil was not the only place on Xi’s agenda. On July 19, he arrived in Argentina and announced an avalanche of deals similar to those signed in Brazil. Among the more than 20 agreements supporting the “strategic partnership” between Xi and President Cristina Kirchner are a promise to invest $4.4 billion in bulding two hydroelectric dams in southern Argentina and $423 million for construction of 11 ships. The two countries also agreed to an $11 billion currency swap.
“In today’s world, the best opportunities occur for emerging nations, as demonstrated in the recent BRICS summit in Brasilia,” Kirchner said.
The deals with China, Argentina’s third-largest trading partner, likely could not come at a better time for the South American nation, which is deeply in debt to its creditors and in danger of another default, 13 years after a catastrophic default initially locked Argentina out of international capital markets.
The Chinese leader continued the deal-making parade in Venezuela, where he and Venezuela President Nicolás Maduro unveiled more than a dozen new cooperative agreements, many in the oil and mineral sectors, including a $4 billion credit line in exchange for Venezuelan crude oil. China is the second-biggest market for Venezuelan oil, second only to the United States.
Xi’s last stop, in Cuba, was both strategic and a social visit to a government that has been a longtime ally in the region. As in the other countries, his arrival was quickly followed by a flurry of announced agreements on everything from telecommunications to the creation of a real estate firm associated with a Havana golf course.
Chinese President Xi visited Cuba, signed agreements on (I’m not joking) Cuban cigars and golf course development. And Marx wept.
— boz (@bloggingsbyboz) July 23, 2014
On Wednesday, in Xi’s final stop before departing for China, he and President Raúl Castro visited the city of Santiago, where the two governments have agreed to a multipurpose port terminal construction project.
Growing Asian Influence
Some analysts see Xi’s visit as an attempt to create a more visible Chinese presence in a region that has historically been the economic “backyard” of the United States. It is worth noting that his tour also coincided with a shorter, similar visit to the region by Russian President Vladimir Putin, who arrived a few days before the BRICS summit to hold meetings on economic and trade deals in Argentina and Cuba before heading to Brazil.
As the axis of global economic power continues to shift toward Asia, it stands to reason that nations like China and India will use that leverage to move into growing Latin American markets. Despite the danger of investing in volatile economies like Argentina and Venezuela, these governments appear to feel that the risk is worth it in order to expand their influence and challenge the economic hold that the U.S. has had on the region for decades. With these new, wide-ranging agreements and the introduction of the BRICS bank, these economies seem to be sending a clear message that the world order is changing — and they want Latin America to be part of that change.