January 25 2014 image description
by: jmhumire 0 Comments

China comes to the Caribbean

Since China’s emergence on the global scene the pursuit of its strategic goals has led to speculation, especially concerning how and why it exercises its growing financial and economic power.  Its ability to promote trade, provide easy loans, grants and investments has led some to ask whether China is engaging in a modern day version of dollar diplomacy.  The similarities and differences from previous efforts at dollar diplomacy provide some useful lessons. 

The original dollar diplomacy promoted by William Howard Taft and his secretary of state P.C. Knox encouraged US investments, commercial and financial involvement in the Americas, but also used this financial power as a diplomatic and political weapon.  

At its worst, dollar diplomacy was the thin wedge of a long history of US intervention by force in the internal affairs of countries in Central American and the Caribbean.  Nor was it always beneficial to US investors some of whom were defrauded as they were encouraged to purchase large amounts of foreign bonds on which issuing countries had defaulted. 

China may now be exercising its economic power in the Caribbean but it would be a stretch to call it dollar diplomacy in its original form.  Instead, a more thorough assessment of China’s interests and objectives in the region may be in order. 

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December 19 2013 image description
by: jmhumire 0 Comments

The Trend of Chinese Investments in Latin America and the Caribbean

Recently Roberta Jacobson, Assistant Secretary of State for Western Hemisphere Affairs, declared that the U.S. does “not in any way see China as a threat.”   Xinhua cited Ms. Jacobson’s comments at the Sixth China-US Sub-Dialogue on Latin America that the US sees more potential in partnerships with China in the region than adversity.   Ms. Jacobson was largely referring to U.S.-China economic relations in a region of enormous potential for both countries. 

Growth in trade between China and Latin America and the Caribbean (LAC) has expanded exponentially since President Hu Jintao’s first visit to the region in 2004. In 2012, total trade between China and LAC countries reached U.S. $261.2 billion, only a quarter of US-LAC trade.  Nevertheless, Latin America and the Caribbean have registered the fastest growing trade in exports to China.  In fact, by 2009, China overtook the US as Brazil’s second largest trading partner registering $56 billion in trade. 

Beyond trade relations, however, China has embarked on a larger relationship with Latin American and the Caribbean to include increasing overseas investments that will help position it in the global marketplace. 

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