China to the South

In the past week, Oppenheimer has had two columns on China's influence in Latin America. The first was on how the Chinese are moving into the region economically. The second on how the US should consider it a long term concern, but not an immediate one.

While some US officials are concerned that China is looking for political/military support, China will face the same stumbling blocks the US does as it looks for support in the region. Also, China may be looking for energy supplies, but the US really cannot do anything unless they step outside the free market.

The more immediate concerns really are human rights and labor rights and environmental issues. However well or poorly you think the US does in promoting these issues in Latin America, China does worse.

We make an attempt to improve the human rights records of militaries; China doesn't even bother with the illusion of reform. The worst thing that could happen is that Latin American militaries begin turning to China for training and equipment. I don't think it grants China any special favors if there was a conflict (no Latin American government, however anti-US, is going to allow itself to be used as a Southern front against the US), but it does reduce whatever influence the US has had in reforming these militaries. Also, with China, there will be even less transparency and disclosure on military cooperation issues than is given by the US.

We offer some basic labor and environmental disclaimers in our trade deals; China looks for the absolute lowest price regardless of the conditions. Unlike the US, there is no domestic constituency with any power in China that is going to boycott sweatshops or call for companies to improve the environment. If China enters Latin America under the wrong conditions, it could be that they find countries or regions who will have a race to the bottom to get China's business.

Some Latin American governments, including Brazil and Mexico, are catching on that doing business with China comes at a price not initially seen. The US can't stop China's global expansion, but we should do what we can to make sure Latin American governments don't sell out the reforms from the past few decades in order to make a quick buck with China.