The Chinese chequebook; Latin America needs to be more hard-headed with its big new partner

.............Mr Li came armed with proposed investments and loans that could total up to $103 billion in Brazil alone (see article). His destinations and the projects both point to a maturing of China’s relationship with Latin America. This saw explosive growth in trade, as China gobbled up Latin America’s minerals, oil and soyabeans while exporting its manufactures.
Now economies are slowing on both sides of the Pacific. China’s slowdown has prompted a steep fall in commodity prices, and thus the value of Latin America’s exports. Brazil’s exports to China slumped by a third in the first quarter of this year compared with the same period in 2014.

But Chinese investment and loans are set to carry on growing. In January President Xi Jinping said that Chinese companies would aim to invest $250 billion in Latin America over the next ten years, compared with a previous total stock of $99 billion. While early Chinese investment was almost wholly in oil, gas and mining, it is broadening out to involve more companies and industries, including food and agriculture, manufacturing and, above all, infrastructure...........

.......China’s interest in developing Latin America’s infrastructure is not altruistic. It wants to lower the transport costs of its imports, such as soya from Mato Grosso state. Its railway and other infrastructure companies have spare capacity because consumption is replacing investment as the main source of Chinese growth.

Because of the concentration in commodities, Chinese trade and investment in Latin America have been “a major driver of environmental degradation”, according to the team at Boston University. The transcontinental railway is a new concern. Peruvian officials favour a northern route through virgin forests rich in biodiversity. Environmentalists prefer a southern route, to Matarani, beside a new road linking Brazil to Peru opened in 2012. But as with Mad Maria, traffic along this highway has been lower than forecast.

It would be wrong to blame China for these risks. Most of its companies in the region have a reasonable record of complying with environmental standards. Rather, it is up to Latin America to become as effective as its new partner in defending its interests in the relationship. Those interests include protecting the environment and avoiding one-sided deals struck for short-term political convenience...........

(EL PERU COMO SEA DEBERIA ENDEUDARSE PARA QUE SE HAGAN LOS DOS TRENES A LA VEZ, EL QUE DECIDAN LOS CHINOS Y ALLI MISMO SACAMOS DE LAS RESERVAS Y PONEMOS NOSOTROS MISMOS PARA EL OTRO TRAMO)

http://www.economist.com/news/americas/21651889-latin-america-needs-be-more-hard-headed-its-big-new-partner-chinese-chequebook