“China’s Engagement with Latin America:
Economic and Political Implications”
Hearn spoke on the drastic effect of China's
as an economic and political power on Latin
in Latin America, Building
on Local Ties
is no great surprise to learn that there is a Chinatown
in Havana, Cuba. It is more unexpected to discover the
increasingly important role that Havana’s
Barrio Chino businessmen are playing in international trade
and the degree to which Chinese businesses are willing
to play local politics halfway around the world.
his public talk, Adrian Hearn, a postdoctoral fellow at
the University of Technology, Sydney, examined the impact
of Chinese diplomatic and trade relations in Latin America.
He paid special attention to Cuba, where he had observed
firsthand the changes wrought by an increased Chinese presence
in the local business community.
is Cuba’s second largest trading
partner after Venezuela. In 2004, China signed a contract
to invest $500 million in the extraction and production
of Cuban nickel (though China may now be backing out of
this deal). China also negotiated the sale of 1,200 Chinese
buses and is investing heavily in the Cuban transport sector.
A recent Havana trade fair was dominated by Chinese electronics
manufacturers, such as Heier, that are looking to set up
production lines on the island. Key benefits for Cuba include
technical training, capacity building and the growth of
human capital. At the same time, the presence of Chinese
state-controlled companies is politically appealing to
the Cuban government.
Chinese culture may be gaining visibility in mainstream
Cuban life — Chinese soap operas air weekly and tai
chi is increasingly popular — the Chinese have actually
been a presence in Cuba since the mid-19 th century when
they were brought over as indentured servants. From 1840
to 1875, 135,000 Chinese laborers were sent to Cuba to support
the sugar economy. From 1902 to 1959, 150,000 Chinese migrant
workers arrived in Cuba , mostly via San Francisco. Barrio
Chino, the enclave where the Chinese community was initially
forced to live, became the most populated Chinatown in Latin
America during the early 20th century.
After the 1959 Cuban revolution, many Cuban-Chinese left
for the United States as businesses were nationalized. Those
that remained faced a high level of discrimination until
the mid-1980s, though relations have since improved and ethnic
societies have reemerged. As China develops its investments
in the region, Cuban-Chinese are taking a greater role in
bridging the business interests of both countries. Starting
in the late 1990s, visiting entrepreneurs have been teaming
up with local partners in Barrio Chino. While these business
partnerships began legally, high taxation rates led to the
development of an extensive black market.
an attempt to formalize more Chinese business relations,
Havana’s Office of the Historian
dissolved the local Barrio Chino government in 2006 and
established a meticulous level of control over business
practices. By widening the formal sector economy, the government
has been able to generate revenue that in turn has been
used for local development projects such as the improvement
of roads. At the same time, illicit business dealings and
informal, non-state connections have been reduced.
in Cuba, which is more open to China than most countries,
there is a sense of caution when dealing with Chinese business
interests. National sovereignty is of great importance in
Cuba, as it is across the region. However, China has successfully
engaged with many Latin American countries across the political
spectrum, and trade figures reflect strengthening relationships.
2004, Chinese President Hu Jintao signed landmark trade
deals in Argentina, Brazil, Chile and Cuba . The agreements
had significant implications for industries ranging from
natural resource extraction to electronics and transport.
As important as the trade deals undoubtedly were, they were
also an acknowledgment of changes that were already afoot:
between 1999 and 2006, exports of Latin American natural
resources to China increased by over 600 percent.
Despite the wild pace of growth and expansion in trade,
there is an air of caution as Latin America evaluates its
new investment partner.
of China ’s interests is more prevalent
in Mexico and Central America, which lack the natural resources
that attract Chinese investors. Rather, that region’s
exports of manufactured goods are in direct competition with
often-cheaper Chinese products. In 2002, China displaced
Mexico as the United States’ third largest source
of imported goods. In resource-rich regions such as Brazil
and Chile , the concern is that Chinese investment in resource
consumption may not build a sustainable economic platform
and that Latin America may be moving to a new form of dependence
the Chinese presence growing so rapidly in the region,
history suggests that the United States would play a very
active role. Why has the U.S. done so little, Hearn asked,
to address China’s increasing
influence in its own backyard?
scholar gave two reasons for the U.S. stance — its
current focus on the Middle East and the prioritization of
U.S. business interests in China. The fact that 20 percent
of U.S. imports still flow through the Panama Canal where
a Chinese company operates major ports on both sides has
not been enough to change the geopolitical equation. Hearn
did point to potential free trade agreements between Central
American countries and the U.S. which may change U.S. calculations
if they prove to significantly boost investor interest in
higher value-added manufacturing in that region.
China typically downplays its political relationships with
Latin America, there have been some indications that its
new partners are under pressure to recognize the Mainland’s
claim to Taiwan . Currently, 12 of the 25 nations that recognize
Taiwan are in Latin America. However, in the last two years,
Grenada and Dominica switched their allegiance after receiving
large amounts of foreign aid from China.
last decade is indicative of China ’s growing
economic role in Latin America . Hearn’s observations
of Havana suggest that China could benefit from building
relationships with its diaspora communities throughout the
Adrian Hearn is a Postdoctoral Research Fellow at the
Institute for International Studies at the University of
Technology, Sydney. His lecture on February 7 was co-sponsored
by CLAS and the Center for Chinese Studies.
Deborah Cheng is a graduate student at the Energy and