China, Venezuela and the USA -
By Saul Landau
26 May to 01 June 2005
"So what did you think of China's
recent economic foray into Latin America," I asked a university student.
"Huh?" she replied.
"I read something about it," said
another, "but I don't remember any details."
"Why not," said a third. "They make
everything I buy at Wal-Mart. So why shouldn't they invest in other
places?" He shrugged, indifferent to the news. Indeed, Washington warns
China over any moves on Taiwan, but has barely responded to its world wide
A century ago, students might have
known as little as today's unscientific sampling, but US policy planners
looked to a then weak and divided China as the answer to the country's
future trade and economic problems. Anxious exporters implored President
William McKinley to act because "the Chinese market rightfully belongs to
us," a member of the Riverside NY Republican Club told Secretary of State
William Hay. This low-wage labor source and vast potential market to the
east would also supposedly solve the periodic depression problem, which in
1893, shook the country's economic structure and motivated the elite to
think about how expansion eastward would resolve that issue.
"Under the stimulus of a narrowing
marketplace at home and widening market opportunity of an awakening
China," wrote historian Thomas McCormick, "America's leadership made a
conscious, purposeful, integrated effort to solve the economic crisis at
home by promoting the national interest abroad." It did so "by using
America's most potent weapon, economic supremacy, to begin the open door
conquest of the China market" (China Market, 1967, p.19).
Indeed, in 1898, President William
McKinley "took the Philippines" (not just on God's command) because they
made the ideal jumping off base for future China excursions. The US kept
its naval base there for 100 years, when technology no longer required
refueling stops. "East Asia is the
prize for which all nations are grasping," wrote Brooks Adams, John Quincy
In 2005, the weak and vulnerable
"prize" that feuding Europeans had carved up for imperial aspirations at
the end of the 19th and early 20th Centuries now blankets all continents
with its goods - and its capital. As the "made in China" label has become
ubiquitous in US department stores and on the wings of commercial
airplanes, Chinese investors also bought hundreds of billions in US paper.
Perhaps, some farsighted Chinese planner back then thought that the United
States would be China's "prize!" Indeed, in early March a US Embassy
official confided to a visiting businessman that he believed that Chinese
leaders viewed the United States as a declining superpower whose time had
passed and will be forced to share world power with other powerful
nations, including China. To demonstrate how China's strategic position
has changed in the last two decades, the Embassy official explained that
China not only captured the US consumer market, but has invaded the US's
traditional Latin American sphere.
He referred to two high level
visits. In November 2004, Chinese President Hu Jintao signed 39 commercial
agreements with five Latin American nations. Chinese investments in
Argentina alone totaled some $20 billion. He then made an investment trip
to the Caribbean as well.
In January and February, Chinese
Vice President Zeng Qinghong followed his boss's visit with his own
entourage of officials and top business executives. During these two
aggressive trips to pursue investment in strategic areas, China stepped
into potentially contentious turf when they signed an accord with
Venezuela's President Hugo Chávez for future Venezuelan oil and gas
exploration. Zeng also offered Venezuela a $700 million credit line for
new housing construction to help reduce Venezuelan poverty, ignoring US
whining over Chavez's "authoritarianism."
Chavez, who won three free and fair
elections in the last six years, gets stuck with the "authoritarian" label
while his pro-US opponents who staged a 2002 military coup, merit the
"democratic" badge. This labeling mystifies those who continue to think
But Beijing's real poke in
Washington's mostly blind eye came with the announcement that it would
give credits to Cuba. In the globalization era, Cuba remains the exception
to all rules. The Bush Administration's Latin American policy targets the
"containment" of Chavez or the "punishing" of Fidel Castro, who holds the
Guinness World Record for "Most Years of Disobedience." Inside sources in
Cuba insist that despite forty six plus years of castigation, Fidel has
yet to miss a meal or a conjugal opportunity.
Since China did not officially
attach specific political language to its economic policies, official
Washington ignored - or denied - the significance of China's Latin America
strategy. Indeed, as the Miami Herald's Andres Oppenheimer observed,
"President Hu Jintao spent more time in Latin America last year than
President Bush." (February 2, 2005) "And China's vice president, Zeng
Qinghong, spent more time in the region last month than his US
counterpart, Vice President Dick Cheney, over the past four years."
While Bush and Cheney asked
Congress to increase US indebtedness with its additional $81 billion to
maintain forces in Afghanistan and Iraq, China offered more than $50
billion in investment and credits to countries inside the traditional
Monroe Doctrine's shield. That sum surpasses Kennedy's highly-publicized
$20 billion for a decade of the Alliance for Progress in the 1960s.
Promoting specific kinds of trade
with Latin America will help meet China's wildly expanding energy demands.
In 2007, the CIA estimated, China will import 50 percent of its oil. China
also needs primary resources and food as it moves into the number two spot
in world economy sizing.
When Chinese leaders showed up in
capital-hungry Latin America with billions in their suitcases, it showed
that they had thought about their country's future even as US imperial
officials trivialize their crises to justify drilling for oil in the
Alaska wilderness or show their concern for future human life by force
feeding a brain dead woman in Florida.
As US dependency on foreign oil
grows and the price of crude hovers in the mid $50s, the Chinese might
maneuver themselves into a position to actually sell some of that viscous
substance to the United States - long before the Alaska drilling results
in a drop of crude prices, China's new investments have targeted oil, gas
and minerals, signs that the Chinese pursue strategic and market rather
than simple profit designs.
China already operates two
Venezuelan oil fields and after signing a January agreement in Caracas,
China will also begin developing
other fields - seemingly in decline - in eastern Venezuela. China also
agreed to buy 120,000 barrels of oil a month and build an additional fuel
producing facility. Venezuelan officials announced that they expect trade
with China to reach $3 billion in 2005, more than double 2004. And - hold
onto your hats, Castro haters in the Bush Administration - a huge Chinese
oil company will begin searching for potential oil fields off the Cuban
Why did Chinese leaders choose late
2004 and early 2005 to make their whirlwind spending tour of several Latin
American nations? First, they may well have noticed that Latin American
governments no longer race to sign onto the US-backed Free Trade of the
Americas agreement as they did previously to NAFTA in the 1990s. Because
the free-trade-free-market model failed to perform as predicted - in
Argentina it led to bankruptcy - governments that question Washington's
economic model now sit in Uruguay, Argentina, Brazil, Venezuela and Cuba;
Bolivia and Ecuador may be next. Indeed, if the radical populist Mexico
City Mayor Andres Manuel Lopez Obrador succeeds in winning the 2006
Mexican presidential election - he is currently the leading contender -
US-sponsored trade agreements may all be doomed.
Second, the petroleum mavens don't
expect supply to rise above demand in the near future. So, given this
climate, China's gaining access to oil and gas sources in the US backyard
has flustered the Bushies, who remain preoccupied with Iraq, Afghanistan,
North Korea and Iran and their religious commitment to change social
security, execute underage murderers, stop legal abortion and rescue the
brain dead. Is it hard for the Bushies to see the world strategic big
picture while they mobilize around family values and religious issues?
For more than a century, US policy
planners have produced wonderful schemes for informal empire. Just as the
China star shined in the eyes of late 19th Century policy intellectuals, a
group of late twentieth century, mostly Jewish neo cons and anti-Semitic
Soldiers of God decided to restructure the Middle East
in the name of God,
Israel and the free market. One group used the concept of advancing
freedom, the other of advancing Rapture.
This kind of ethereally based
transcendent thinking, however, often falls short of details - as the
invasion of Iraq has shown. Neither the neo cons nor their strange
Christian bedfellows have evinced much concern about the approximately
100,000-plus Iraqi civilians who have died in the post March 2003 US
invasion. But the 1,600 US and British soldiers who have also perished
causes serious political fallout. Iraq was destroyed. The Iraqi oil
profits that Deputy Defense Secretary Paul Wolfowitz (now World Bank
president to be) predicted would pay for the whole invasion have not
materialized. No one in the Bush Administration seemed overly upset over
the destruction of a country or over their calculated devastation of
international law and the UN.
Ironically, US planners casually
discarded the very order and law they had imposed on the world sixty years
earlier. Bush's invasion of Iraq nullified both the Nuremberg laws that
outlawed aggressive or pre-emptive war and, by bypassing the United
Nations Security Council, the UN's important function: the exclusive right
to make war.
The neo cons and their Christian
counterparts wanted US leaders to take unqualified command again, as they
did in 1945. They dismissed as inconsequential the massive changes that
had occurred during the six intervening decades. In those heady post war
days, the United States possessed 55% of the world's manufacturing
capacity, a wildly growing economy and a monopoly over atomic weapons. The
disastrous war had sapped the juice from the other imperial nations. The
Soviet Union didn't loom as a threat. Victorious on the battlefield, the
Soviets were also deeply crippled: fifty plus million dead and wounded,
200 cities destroyed, no food, no boots for the soldiers.
US planners also projected that
their corrupt, puppet regime of Chang Kai Shek could hold out against the
encroaching red armies of Mao Tse Tung. By October 1949, Chiang had lost
his ability to attract even the support of dishonest. So much for
Washington told its cooperating
allies - including the newly vanquished Germany and Japan - that they
should prosper as good albeit junior trading partners and sources and
sites of investment, but not to the point of becoming rivals. For nations
emerging from colonial rule, the US had no realistic plans. But the
crippled Soviets kept preaching "revolution," a word that gained resonance
in the countries that came to be known as the third world. And movements
in those emerging nations threatened to disturb the new order that US
leaders had placed upon the world.
The problem with their plans
derived from their inability to predict the dynamism of third world anti
colonialism. Instead of supporting de-colonization, the United States
played an ambiguous role, supporting the idea but not the practice of
"free nations." For example, by not recognizing the Ho Chi Minh-led
Republic of Vietnam - which declared independence in August 1945 -
Washington helped France retake its former colony.
The most important revolution,
however, occurred in China. In 1949, the Chinese Communists led their
people to overthrow western colonialism, tossing the United States out of
the very place that 19th Century planners had staked their hopes for the
Now, China apparently sees its
future in the US market and in its previously shielded sphere of Latin
America. Thirty five years ago, China remained "unrecognized" by the
United States and most of its lackey governments in Latin America. In
1975, Chinese trade with the region amounted to $200 million; in 2004,
over $40 billion. China has become one of the foremost players in the era
of globalization, which US leaders promoted without considering that China
might avail itself of this opportunity to move into previously sacrosanct
US spheres - like Latin America.
While government leaders silently
wring their hands in frustration over China's capital moves into "our
backyard," some journalists spoke directly about the meaning of China's
investment invasion of US clients. China is "nurturing alliances with many
developing countries to solidify its position in the World Trade
Organization, flex its muscles on the world stage and act as a
counterbalance to US power," opined Gary Marx (Chicago Tribune December
Caribbean Council director David
Jessop (Week In Europe, February 6) said the Chinese moves into Latin
American "suggest the emergence of a global order in which the countries
of the South begin to forge new alliances based on a very different
perception of the world."
"Beijing is attempting to throw an
economic spear into the heart of the Monroe Doctrine," commented Anthony
Gancarski (FrontPageMagazine.com, January 20, 2005). He warned that
"Failure to do something about that will be interpreted as a sign of
America's loss of mettle - and of vulnerability."
Indeed, China has succeeded in
forcing an Open Door policy on the United States, one similar to that
fashioned in 1898 by Secretary of State Hay.
leaders now say implicitly to
Washington what Acting Secretary of State Edwin Uhl wrote to the US
Minister in China in 1895: "This country will expect equal and liberal
Now China expects the United States
to offer it "equal and liberal trading advantages," even with governments
that Washington has placed on the official black hat list. Senator Richard
Lugar (R- IN), chair of the Senate Foreign Relations Committee, worried
about the contradictions that arose from Venezuela's new deals with China.
Like other prudent and truly conservative Republicans, Lugar wonders
whether Bush's aggressive anti-Chavez rhetoric and actions might lead
Venezuela to retaliate and cut the US off from its oil supply. After all,
China will pick up the purchase slack!
"For years and years, the
hemisphere has been a low priority for the US," said an aide to Lugar,
"and the Chinese are taking advantage of it. They're taking advantage of
the fact that we don't care as much as we should about Latin America."
(New York Times, March 1, 2005)
Likewise, China has undercut
Washington's policy of starving Cuba from resources. Chinese leaders
pledged large investment credits for Cuban nickel.
Beijing thus befriends US enemies,
Chavez and Castro, as US prestige slips in its own "backyard." It has used
the "open door" ploy against the United States in Latin America as the US
once used it against Europe to get at Chinese resources and labor. Hey,
doesn't globalization mean that all's fair in the game of trade?
at Cal Poly Pomona University and is a fellow of the Institute for Policy
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© 2004 Bulatlat
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