The future of Chinese influence in Latin America

Chinese President Xi Jinping and his Venezuelan counterpart Nicolas Maduro meet in Caracas, July 20, 2014
July 20, 2014: Chinese President Xi Jinping (L) and his Venezuelan counterpart Nicolas Maduro meet in Caracas. China has found itself pulled into domestic politics in the region due to its huge loans to countries such as Venezuela (source: dpa)

China’s role in trade in the region has created huge economic distortions
Its investments in and lending to Latin America have thrust it into the spotlight and given it unprecedented geopolitical influence
Latin American countries have learned there is a big downside to giving China such a big influence over their geopolitics
China’s sway in the region is likely to remain stable, as it hews a pragmatic posture in terms of trade and investment

Between 2000 and 2012, Chinese demand for commodities fueled economic expansion in Latin America and underwrote expensive populist measures that kept left-leaning governments in power in Venezuela, Ecuador, Chile and Brazil. It also dramatically reduced poverty in Argentina and Brazil. Then, in 2012, the Chinese economy began to slow and the commodities boom collapsed, contributing to the destabilization of governments in many of the same countries.

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