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Show Me the Money
China's South American Headache

As Chinese Premier Xi Jinping tours Latin America this month, one might think they would receive a warm welcome, on account of the anti-U.S. stance Beijing and many of the region’s leaders share. Not so, according to an analysis in the Financial Times. China has been encountering many of the same problems that have long bedeviled the U.S. in its dealings with Latin America: governmental mismanagement, late payments, and a tendency to renege on deals:

So while Mr Xi, who sets off for Argentina from Brazil on Friday, may well announce new commercial initiatives on his tour and extol the virtues of deepening South-South ties – especially after this week’s creation of a Shanghai-based “Brics” development bank—there will probably be some testy background conversations too.

That is likely to have been so in Brasília, which has long complained that cheap Chinese goods undercut local manufacturers even as Brazilian companies such as Embraer, the aircraft manufacturer, struggle to make inroads in China.

It is probable in Argentina, where in 2012 the government cancelled a rail concession in which a Chinese company had a stake, shortly after Wen Jiabao, former Chinese president, announced a $10bn loan facility from the China Development Bank.

It is almost certain to be true in Havana, where China is impatient with Raúl Castro’s dawdling economic reforms that Beijing once thought would mimic its own speedy economic rise.

But it is especially certain in Caracas, which has taken almost $50bn in oil-backed loans since 2007. In 2011, Beijing reportedly dispatched inspectors to Venezuela’s ministries to study how its loans had been spent.

As we wrote about Beijing’s efforts to keep the peace in Africa, if China aspires to be a global superpower, it will have to suffer the headaches that come with it.

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  • FriendlyGoat

    But China will keep trying.

  • Jacksonian_Libertarian

    The Chinese deserve to get cheated, they themselves cheat where ever they can.

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