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China taps the Latin world

At a time when the United States is mired in addressing conflicts, its contemporaries are busy on a parallel path of economic diplomacy.

The recently held Brics summit in Brazil and the big-ticket initiatives that Russia and China had taken in the backyard of America confirm the phenomenon that multipolarity is just round the corner. Close on the heels of Moscow reassuring Latin American states that they form a fundamental part of its foreign policy, Chinese President Xi Jinping launched his personal diplomacy in the southern hemisphere, signing landmark deals with Argentina, Venezuela, Brazil and Cuba in sectors such as oil sales, infrastructure development and preferential trade concessions.

Beijing’s efforts to buoy and strengthen Argentina’s economy since it defaulted in 2001 had been a corner stone of its involvement in that part of the world. Thus, a $11 billion currency swap with Argentina could not have come at a more opportune time for the embattled government of President Cristina Fernandez de Kirchner. Similarly, the $2.3 billion credit line for Venezuela in return for its crude and other products will go a long way in furthering Chinese influence in the region. Last but not the least, the desire on the part of both Russia and China to stand firm behind Cuba’s rise as an independent and self-sufficient entity, in the backdrop of pressing American sanctions, is genuine leadership. So is the initiative to launch a development bank with a seed capital of $100 billion, sending across message to the US and the Europe that the post-Bretton Woods order is up for a change.

China’s tapping of South America is in continuation of its policy to cultivate new horizons of soft power corners. After having explored Africa, where China has become the biggest overseas investor and stakeholder in extracting natural resources, Beijing wants to consolidate its power pinnacle right in the heartland of the Americas. Beijing’s art of making inroads with the socialist allies without mincing a single political statement is epoch-making diplomacy.