Latin America will be the biggest US diplomatic and economic fiasco yet.

Trade between China and Latin America reached a record of more than $140 billion last year, 40 percent higher than the $101 billion of 2007. U.S. exports to Latin America, in the same year, grew at 9.1%.

I wonder how much trade the US will end up with between itself and say Iraq and Afghanistan? How much trade has the US lost to China in Latin America? Take a look:

Viva la progress: China's Latin links

China Daily

There is little doubt that deals will be done when Venezuelan President Hugo Chavez arrives for top-level talks in Beijing Wednesday. His mission, after all, is to improve his nation's ties with China. But no matter what agreements he pens with President Hu Jintao, it will be little more than a diplomatic triumph, likely having little impact on the lives of common Chinese citizens. Right?

Wrong, claims 72-year-old Huang Shikang, the ex-ambassador to Chile, Mexico and Colombia between 1986 and 2000, who feels the bonds brokered today herald a better future and seem far from the days when relations with South America were first forged.

Trade between China and Latin America reached a record of more than $140 billion last year, 40 percent higher than the $101 billion of 2007. But decades ago, it was a very different story.

"In 1986, Chinese commodities could hardly get on to the shelves in supermarkets in Chile, and it was the same in Mexico in early 1990s," recalled Huang, who witnessed the progress of Sino-Latin American ties on the frontline.

Huang first arrived on the continent in 1959 as an interpreter with a visiting Chinese media group. Eight years later, he started his diplomatic career as part of the first long-term delegation to Chile under the China Council for the Promotion of International Trade (CCPIT).

"For many Latin Americans, China was a mysterious country, far away," he said, adding that Beijing had occasionally sent music groups and staged Chinese art shows for locals.

Apart from his daily job of reading the local press for the chief representative of the CCPIT office in Chile and accompanying him to meetings with Chilean officials and communities, Huang said another major task was to "make more friends".

Former Chilean president Salvador Allende, whose term saw the first diplomatic ties with China in 1970, became a good friend, he said, but it was clear that, for Latin American countries, recognizing China was mainly a political need before the 1980s as the country was a permanent member of the United Nations' Security Council.

Things improved dramatically after China started economic reform and its wealth began growing, and Huang found more countries in the region keen to learn more about this "economic powerhouse". By 2004, the annual growth rate of trade volume between China and Latin America stood at 50 percent.

After an extensive working life in Latin America, Huang said the prospect for developing ties further is "promising".

And, today, cooperation between the two has moved on to a much broader agenda than trade.

On March 24, Chavez inaugurated the construction of an $800-million, 290-mile railway project in central Venezuela, financed by the China-Venezuela Strategic Development Fund set up last year. Meanwhile, the nation's first satellite roared into space last October from a launch pad in Sichuan province.

China signed the Free-Trade Agreement with Chile in 2005, extending cooperation from trade to service sectors, while talks on a similar deal with Peru is expected to be finalized soon, according to media reports. And following the onset of the global financial crisis in January, China jointly formed the Inter-American Development Bank.

But China's initial links with countries in Latin America and the Caribbean drew harsh comments from skeptics who questioned Beijing's motives.

The Council of Hemispheric Affairs (COHA), a Washington-based think tank, published a paper last month arguing the blooming ties between China and Costa Rica were Beijing's "aggressive expansion" into the "backyard of the United States".

"China's multifaceted involvement in Latin America means it is expanding its economic and political presence in a region the US concretely has long regarded as its preeminent sphere of influence," it said in its report "China Courts Costa Rica; Expands its Presence in Washington's Backyard".

The COHA also added China's deeper involvement had come at a time when US President Barack Obama's administration had still to "react to new Latin American realities".

In May last year, while still running for office, Obama said: "While the US fails to address the changing realities in the Americas, others from Europe and Asia, notably China, have stepped up their own engagement."

But analysts have not been pleased with this view, not least Peter Lewis, a researcher at the University of Chile's institute of international studies, who wrote in a recent article that China's strategic goal had been over-estimated as people have not understood Beijing's "internal goals".


Lewis said that when China develops its ties with South and Central America, it is because the country is looking for new markets for its exports and for natural resources to power its domestic growth. He added: "Without such comprehension, China will be strategically over-estimated by the US, causing harmful economic and politically consequences for the US, Latin America and China, amongst many others."

In Beijing, Wu Guoping, a professor in Latin America studies at the Chinese Academy of Social Sciences (CASS), said any claim China had branched out into the US' "backyard" was absurd and based on a "Cold War mentality".

"In the age of globalization, a viewpoint like 'Who is within whose sphere of influence?' doesn't stand," Wu said, adding that seeking closer ties with Latin America "aims at no one while no one in Latin America would consider their homeland as the US' backyard."

Barbara Schieber, editor of the Guatemala Times, agreed and has already urged the US to stop referring to Central America as its "backyard". "We find that term offensive and a sign of outdated imperialistic thinking", she wrote online when commenting on the COHA paper.

Along with COHA's controversial viewpoint, though, others have also accused Beijing of trying to "grab" natural resources from Latin America.

"China has been hoovering up South America's commodities to satisfy its booming economy: soya and iron ore from Brazil, soya and oil seed from Argentina, copper from Chile, tin from Bolivia and oil from Venezuela," said the British Broadcasting Corporation, based in London.

Chinese analysts have strongly denied the claims leveled at the nation, while pointing out that the cooperation deals are to the benefit of both countries involved.

Professor He Shuangrong, also with the CASS, agreed China needed resources from Latin America but added the nation's economic growth was "surely a good thing for Latin America", while the need for Chinese investment in the Americas, mainly to build and improve infrastructure, was "very, very big".

The money used in joint-funded projects helped to create more opportunities for people, she added, citing that the Venezuelanalysis had reported the $800-million railway project will create more than 1,800 jobs in the country. The progress of Sino-Latin American relations alongside China's increasing globalization was "only natural", He added.

Last November, Beijing published its first policy paper on Latin America and the Caribbean and, as a general guideline, it outlined the intention to strengthen "comprehensive cooperation" in the region in areas of politics, economics and culture, as well as on peace, security and judicial affairs, said the Foreign Ministry.

The paper also clearly marked out China's goals to promote mutual respect and trust, achieve win-win results and boost common progress.

"They share the same principles, with both sides having respect for multilateralism," said Courtney Rattray, Jamaican Ambassador to China, who added China is handling its relations with Latin American and Caribbean countries "based on principles", not just interests.

"China has an understanding as a developing country of what our needs are, and most of the countries in Latin America are developing countries," he said, explaining that China's growing wealth means a "huge market" for Jamaica's exports in "niche products such as coffee, rum and beer".

When asked for his views on the strong ties between China and Latin America, Rattray enthused: "I think it's a perfect match."

Here is a typical Chinese factory that is beating our brains out. Pick out at least ten reasons why that is happening, considering they have to ship half way around the world to the Americas: