THE SOUTH – SOUTH COOPERATION: THE SINO –
LATIN AMERICAN AND THE CARIBBEAN
RELATIONS AND THE
"TAIWAN FACTOR"
Prof. Luis Ernesto Nava Molero
Universidad Simon Bolívar
Venezuela
[email protected]
The promotion and enhancing of the South – South cooperation is an unavoidable
commitment to all developing countries. In this sense, the cooperation between People’s
Republic of China and the Latin American and Caribbean nations should benefit all the
involved states, and, at the same time, should contribute to the world peace and
development. In 1988, “Chinese leader Deng Xiaoping said, “People are saying that the 21st
century is the Pacific era… I firmly believe that at that time there will also be a Latin
American era, and I hope the Pacific era, Atlantic era, and the Latin American era appear at
the same time.” He also said, “China’s policy is to develop and maintain good relations with
Latin American countries, and make Sino – Latin American relations a model of South –
South cooperation.” (Jiang, 2007). But, this kind of cooperation’s model should not to harm
the interest of Taiwan.
Among the characteristics that China has are being the world’s oldest continuous
civilization, as well as being nowadays the one of the top three destinations of foreign direct
investment, the third largest importing and exporting country, and the fourth economy in the
world (after the United States, Japan and Germany). The power of this Asian nation has
risen and declined, and from 1949, after the civil war, has been divided in two territories: The
People’s Republic of China (PRC) and the Republic of China (ROC) common called Taiwan.
These two States since the beginning of the 21st century have done of the Latin
America and the Caribbean the major battleground of their foreign policy regarding
international legitimacy, and recognition.
But has been the China’s renovated interest in Latin America the new phenomenon
that has reached the interests of both the political and the epistemic communities.
According to the Report RS22119 of the Congressional Research Service:
“… over the past years, increasing attention has focused on China’s growing interest in Latin
America. Most analysts appear to agree that China’s primary interest in the region is to gain
greater access to needed resources — such as oil, copper, and iron — through increased
trade and investment. Some also believe Beijing’s additional goal is to isolate Taiwan by
luring the 12 Latin American and Caribbean nations still maintaining diplomatic relations with
Taiwan to shift their diplomatic recognition to China.” (Dumbaugh, K., & Sullivan, M.,
2005, p. 1)
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In my opinion isolating Taiwan is not just an additional goal of the China’s foreign
policy to Latin America and the Caribbean but the major one. Approaching to analyze the
Chine’s interest in Latin American and Caribbean states just from the economic point of view
is only a partial approach due the geopolitical interest of China is the relevant key of the
China’s interest in expanding economic and trade relationships with Latin America and the
Caribbean. The main reason in which is based this affirmation is that PRC is pressuring
those nations to sever their ties with Taiwan in favor of establishing it with mainland China
based on PRC’s point of view of “One China” Policy.
BRIEF HISTORY
In an interesting study William Ratliff (2009)
divided on four stages the history of
Chinese relations with Latin America between 1949 and mid 2008. These stages are:
•
First: the 1950s
•
Second: the 1960s
•
Third: from the early 1970s until the death of Mao Zedong
•
Fourth: began with Deng Xiaoping’s reform and continues today.
From his research and according to the period of time the current paper is focused, it
is important to pay attention to the third and fourth stages he argues to have a big picture of
the historical panorama of this contemporary relationship.
“At the beginning of the 1970s, China had diplomatic relations with only the two selfproclaimed socialist governments of Latin America, Cuba and Chile.” (Ratliff, 2009, p.5). In
Ratliff’s opinion the visit in 1972 of the USA President Richard Nixon and Henry Kissinger
open the door for that many Latin American countries established diplomatic relations with
PRC; so, Argentina, Guyana, Jamaica, and Mexico did it in 1972; then Brazil, Trinidad and
Tobago, and Venezuela in 1974; and Surinam in 1976. Panama already -in 1971- had
established diplomatic relations with PRC.
While the fourth stage other Latin American and Caribbean nations, such as
Barbados in 1977; Ecuador and Colombia in 1980; Antigua in 1983; Bolivia, Grenada, and
Nicaragua in 1985; Belize in 1987; and Uruguay in 1988 established diplomatic relations with
People’s Republic of China at the expense of the Republic of China. Currently, in South
America only Paraguay remains recognizing Republic of China as the One China.
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ECONOMIC INTEREST
Economically, China has two major goals: (a) to secure the raw materials it needs
and to diversify the sources in order to reduce the country’s vulnerability; (b) to maintain a
high level of access to the market in order to assure the exports of its dynamic manufactured
products. While economic aims toward Latin America have been of a secondary importance
for China, the economic relationship between the two has grown significantly in recent years.
The Chinese economic relations with Latin America and the Caribbean are relatively modest
compared to those with Asia or the United States.
Most analysts appear to agree that People’s Republic of China started to strengthen
its relations with Latin America and the Caribbean with the economic liberalization initiated
by Deng Xiaoping as of 1978. Nonetheless, for instance, the significant increasing of
Chinese imports from Latin America has been done in recent years: from $5.4 billion in
2000 to $21.7 billion in 2004 which implies an average annual growth of 42 %.
According to Barbara Hogenboom (2008), most of the imports come from Brazil,
which with $8.7 billion represented 40 % of the region’s total in 2004. Other important
countries are Chile (17 %), Argentina (15 %), Mexico (10 %) and Peru (7 %). Latin America
exports consist mainly of primary products, and manufactures based on natural resources,
which represent respectively 46 and 30 per cent of the exports in 2004. China depends on
Latin America for products like sugar and fruits, soy oil (e.g. from Argentina), minerals
(Brazil) and copper (Chile). While Latin America is providing mostly raw materials, China’s
exports to Latin America are strong in low technology products (e.g. clothing and footwear).
These Chinese imports threaten local production, especially in Mexico, Central America and
the Caribbean. Moreover, low Chinese production costs in these sectors are harming Latin
America’s chances for export production for the US and European markets.
Other factor playing an important role in the economic interest of PRC in Latin
America is that in the WTO Ministerial Conference in Doha, Qatar, on November, 10th, 2001,
the member states approved the terms of China’s accession –after 15 years of multilateral
and bilateral negotiations-, and in 2004 it became a permanent observer of the Organization
of American States (OAS) and of the Latin American Parliament. Likewise, regarding other
sub regional Latin American organizations, People’s Republic of China, since 1990,has
attended the annual meetings with Foreign Affairs Ministers of the countries of the Group of
Rio (a permanent regional consultation mechanism), mainly to search for joint positions in
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international institutions. In 1991 China became a permanent observer of the Interamerican
Development Bank, and in 1994 of the Latin American Integration Association ALADI. In
1998 the People’s Bank of China became a member of the Caribbean Development Bank.
Moreover, China has established mechanisms of permanent dialogue with MERCOSUR and
with the Caribbean Community and Common Market (CARICOM). In March 2001, then
Foreign Minister Tang Jiaxuan attended the first foreign ministers meeting of the East AsiaLatin American Forum held in Santiago, Chile.(Cornejo, 2005; Li, 2005)
In 1996, in Caracas, Venezuela, at the Headquarters of the Latin American Economic
System (SELA), Prime Minister of the State Council of the People's Republic of China, Li
Peng sustained:
“China attributes great importance to fostering ties with the nations of Latin America and the
Caribbean. I would like to take this opportunity to present the principles my country applies in
this respect: directing interstate political dialogue to improve mutual knowledge and trust,
develop economic and technical cooperation in several modalities to promote shared
development, foster contacts at the private level to enhance the spheres of exchange and
cooperation, support one another in the international arena in protection of the interests of
developing nations, and create normal interstate relations with countries that still have none
with China, adhering to the five principles of peaceful coexistence. The Chinese government,
subject to the aforementioned principles, is set to conduct joint efforts with all Latin American
and Caribbean countries, in order to create enduring, friendly and stable ties, under equal
conditions and mutual benefits, thus writing a new chapter for the annals of friendly
Chinese/Latin American and Caribbean cooperation.” (Peng, 1996, pp. 3-4)
Some years later, in 2004, in Brazil, the President of the People's Republic of China,
Hu Jintao, addressing to the Brazilian Congress said that main goal for PRC enhancing its
relationship with Latin America are (1) “deepening strategic common consensus and
enhancing political mutual trust,” (2) “focusing on practical work and innovation and tapping
cooperation potential,” and (3) “valuing cultural exchanges and enhancing mutual
understanding” (Jintao, 2004).
The next figure shows us the amount of commercial interchange of member states of
ALADI with both the Republic of China, and the People’s Republic of China. As can be
observed in the graphic, in 1995 the foreign trade between ALADI and PRC was only an 11
% higher than the interchange between ALADI and ROC. Nonetheless, just five year later, in
2000, this gap between PRC and ROC was 222, 7 % in favor of the first. In 2004 the
interchange between ALADI and mainland China was almost five times higher than the
interchange ALADI-Taiwan; in 2006, six times, and in 2008 in more than seven times.
4
Obviously, this increasing of the commercial relationship between China and member states
of ALADI is related, in first order, to the China’s economic growth, but also it is related to the
political pressure China has exercised on its allies in Latin America and the Caribbean.
ALADI Member States Foreign Trade with ROC and PRC
(Thousand of US dollars)
140,000,000
120,000,000
123,973,225
100,000,000
80,000,000
60,000,000
70,011,251
40,000,000
38,755,241
20,000,000
4,713,358
4,175,968
11,243,013
0
1995
5,047,395
1996
1997
1998
1999
2000
2001
11,510,101
7,767,547
2002
2003
2004
2005
16,850,851
TAIWAN
2006
2007
2008
1995
2000
2004
2006
2008
TAIWAN
4,175,968
5,047,395
7,767,547
11,510,101
16,850,851
CHINA
4,713,358
11,243,013
38,755,241
70,011,251
123,973,225
Source: Latin American Integration Association (ALADI)
GEOPOLITICAL INTEREST
Since the 1949 civil war, Taiwan has been separated from the People’s Republic of
China, and mainland China views Taiwan as a “renegade province” that must be reunified
with the rest of country. Part of the political strategy PRC has to bring Taiwan back into the
fold has been to isolate it diplomatically. In the 1950s, most of Latin American and Caribbean
nations had diplomatic relations with Taiwan. Then, Cuba established ties with China in
1960, and in the 1970s, Chile led a major shift in favor of the PRC. Currently, only 23
countries worldwide accord Taiwan diplomatic status and 12 of them are in Latin America
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and the Caribbean. Taiwan provides for this recognition, development aid and disaster
assistance to these states. (Johnson, 2005)
It is true PRC has economic interest regarding Latin American and Caribbean
nations, but behind the speeches about mutual trust, cooperation, goodwill, and so far, it is
the Chinese geopolitical interest in Latin America and the Caribbean: Isolating Taiwan,
eliminating it as a rival in the “One China” struggle around the hemisphere. (Ratliff, 2009)
For the Republic of China (Taiwan), the states of Latin America and the Caribbean
represent a relatively solid regional commitment to its status as a state separate from the
PRC. If this recognition pattern, representing a significant portion of Taiwan's support for
claims of legitimacy in the international system, were to change, Taiwan's position of
claiming a sovereign state status would be in a severe risk. (Watson, 2004)
According to the official website Government Information Office, Republic of China
(Taiwan), this nation has, currently, the recognition of the following states:
Africa
•
Burkina Faso (1994)
•
Gambia (1995)
•
Saint Tome and Principe (1997)
•
Swaziland (1968)
Americas
•
Belize (1989)
•
El Salvador (1961)
•
Guatemala (1960)
•
Haiti (1956)
•
Honduras (1965)
•
Nicaragua (1990)
•
Panama (1954)
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•
Paraguay (1957)
•
Dominican Republic (1957)
•
Saint Kitts and Nevis (1983)
•
Saint Vincent and the Grenadines (1981)
•
Saint Lucia (1984-1997, 2007)
Europe
•
Vatican City (1942)
Oceania
•
Marshall Islands (1998)
•
Solomon Islands (1983)
•
Kiribati (2003)
•
Nauru (1980-2002, 2005)
•
Palau (1999)
•
Tuvalu (1979)
As can be observed more than a 50 % of the states recognizing the government of
Republic of China are located in Latin America and the Caribbean, and except Paraguay, all
of them are in Central America and the Caribbean Basin. Once in a while a country flips
back to Taiwan, as St. Lucia and Nicaragua have done after shifts in ruling parties. The most
recent to abandon ROC for PRC was Costa Rica in 2007. In consequence, Taiwanese
authorities are worried about a possible domino effect triggered by Costa Rica’s decision to
establish diplomatic ties with the PRC. Some analysts think that Nicaragua, Panama, and
Paraguay can switchover their recognition to Taiwan in favor of Beijing. (Ratliff, 2009). Were
Taiwan to lose their support, it would have ties with only the Holy See and 10 small,
impoverished nations in Africa and the South Pacific, dramatically weakening Taipei’s claim
to sovereignty. (Forman & Moreira, 2009)
But, for instance, in this sense the President of Nicaragua, Daniel Ortega, in 2007,
has ratified the commercial and diplomatic relations with Taiwan by means of the firm of a
memorandum of understanding that guarantees the continuity of the investment, the
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commerce and the financing of social projects of the Asian country in Nicaragua.
The
closing signature of the document was in charge of the Minister for Foreign Affairs of
Nicaragua, Samuel Holy, and its Taiwanese counterpart, James Huang, accompanied by the
president Chen Shui-bian, who left to his country after participating in the act of takes of
possession of the Nicaraguan President. (Ortega, 2007)
Likewise, in 2008, the President of Panama, Martin Torrijos, sustained that Panama
will maintain diplomatic relations with Taiwan and commercial with China. "We have the
decision to maintain the same politics. It will vary in nothing the relation with Taiwan and
Chinese the sovereign decision of Taiwan upon electing a president", said Torrijos in
reference to the election of Ma Ying-jeou as new president of Taiwan. Torrijos recalled that
Panama and Taiwan have in force a free trade agreement since four years ago and a
growing commerce based on industrial importing and exports of agricultural products,
processed of chicken and shellfish.
China has asked to Panama that break links with
Taiwan, to which considers a "rebellious province", but the Central American country has
maintained its traditional policy regarding Taiwan. (Torrijos, 2008)
The fact that PRC is one of the permanent five in the United Nations Security Council
constitutes another important factor to attract Latin American and Caribbean nations in favor
of China due the seeking of these countries to play an enhanced role in the UN and other
international agencies. There is a chance that Latin America and the Caribbean region could
be tempted to have a closer relationship with PRC looking for its support in the international
organizations; moreover, when China appears to be using its economic might as a means to
strip Taiwan for its Latin American and Caribbean allies. (Erikson & Chen, 2007)
The region is crucial for Taiwan’s claim to statehood or state like status. Yet,
Taiwan’s international status is also affected by the situation in mainland China, which at
present leaves it little room for diplomatic maneuver. (Li, 2005)
In the long run, China is more likely to leverage its economic clout in the region to
support its political preference, pressing countries to fall in line on its top foreign policy
priority: to recover Taiwanese territory. A report from the Congressional Research Service
of USA (CRS 30341, 2007) sustains that while economic motivations have dominated the
expanding Chinese engagement with South America, Chinese relations with Central
America and the Caribbean have focused on the issue of inducing nations that diplomatically
recognize Taiwan as the legitimate government of China to recognize the PRC. The issue
not only has deep resonance in Chinese domestic politics and ideology, but the international
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isolation of Taiwan is also seen as part of the PRC’s long-term national security strategy for
dealing with the issue as a “domestic” problem.( Kan, 2007)
The dominance of the Taiwan issue in Chinese relations with this sub region reflects
a confluence of the aforementioned factors. In consequence, Taiwan is now hard-pressed to
compete against the growing economic and political clout of China in Latin American and
Caribbean region in order to preserve its international recognition. According to Johana
Mendelson and Susana Moreira (2008), faced with growing competition from the PRC,
Taiwan has redoubled its efforts to secure the support of its allies in Latin America. The most
visible instruments utilized by Taipei are frequent and highly publicized exchanges of highlevel official visits: the first overseas trip of President Ma Ying-jeou of Taiwan after his
inauguration was to Latin America. The main purpose of Ma’s eight-day trip was to attend
the inaugurations of Paraguay’s president, Fernando Lugo, on August 15, 2008, and the
Dominican Republic’s president, Leonel Fernandez, on August 16, 2008. Ma also held talks
with the president of Panama, Martin Torrijos; the president of El Salvador, Antonio Saca;
the president of Honduras, Manuel Zelaya; and the president of Haiti, Rene Préval.
Taiwan also continues to supply much needed technical and medical assistance after
humanitarian or natural disasters. Furthermore, the Taiwanese government encourages
investment by Taiwanese companies in allied countries through the establishment of a $250
million fund and a central coordinating office to facilitate investment projects.
To strengthen economic ties with its allies, Taiwan has signed free-trade agreements
(FTAs) with Panama, Nicaragua, Guatemala, El Salvador, and Honduras; all are in effect,
save for the one with Honduras. FTA negotiations with the Dominican Republic are currently
under way.7 In addition, Taiwan is sharing its technological expertise through initiatives such
as the Central and South America Research Center, although not very successfully.
(Forman & Moreira, 2009)
In response to the pressure China is doing in the area, Taiwan’s new president, Ma
Ying-jeou, has twice called for a diplomatic truce with China. Under his proposal, in order to
build mutual trust toward cross-strait reconciliation, Taiwan would strengthen its relationship
with its existing 23 allies but would not actively seek to establish formal ties with other
countries. According to President Ma’s proposal, China then would also refrain from wooing
Taipei’s existing allies. (Forman & Moreira, 2009)
If President Ma and Beijing continue the rapprochement underway in mid-2008, a
less competitive relationship with Latin American (and other) countries may come about,
9
perhaps with a tradeoff of diplomatic recognition of Beijing and more ROC involvement in
international institutions. However, recently, in March 2009, the government of China
announced the Chinese willing to tighten the relations with El Salvador, that recognizes to
Taiwan, after the elected president Mauricio Funes declared its intention to examine the
establishment of diplomatic relations of the Central American country with Beijing. But the
Chinese government clarified that any approach with El Salvador should base on the
principle that the island of Taiwan is splits member of its territory. (El Universal, 2009, March
19). In conclusion, Latin America and the Caribbean remains one of “China’s main
instruments for eroding Taiwan’s international status and forcing the island to negotiate a
reunification timetable.” (Cesarin, 2007)
DIFFERENT APPROACHES OF LATIN AMERICAN COUNTRIES TO CHINA
In Latin America, China is viewed differently in different countries. Some Latin
American countries see China's staggering economic development as a panacea or
bonanza (Argentina, Brazil, Peru, and Chile view China as an insatiable buyer of
commodities and an engine of their economic growth); others see it as a threat (Mexico, and
the Central American republics fear losing jobs and investment); and a third group of
countries consider China their ideological ally (Bolivia, Cuba, and Venezuela). (Malik, 2006)
The variety of interest in having good relations with China includes: (1) China offering
an alternative source of power and influence, through trade, investments, aid, and largepower orientation, to the United States; (2) China offering new markets to trade, ideally
complementary, particularly for the sale of raw materials and foodstuffs, both to promote
growth at home and to reduce excessive reliance on one major nation, namely, the United
States; (3) increasing foreign direct investment, or FDI, without the strings associated with
Western investments; (4) non-American trade and investment, promoting national and
regional diversification in economic and political terms; and (5) the generally unspoken
appeal of China’s development experiences that maintain elitist political control in the
country while undertaking economic reforms. (Dumbaugh, K., & Sullivan, M., 2005)
That is why an increased Chinese presence in the hemisphere is not seen as a good
thing by all countries in Latin America. For instance, since the entry into force of the North
American Free Trade Agreement (NAFTA) in 1994, Mexico worries that China has viewed
this country only as an access point to the U.S. market.
10
In the first group, Chile has taken the greatest strides in its relations with China
because it has the healthiest market economy in Latin America. It was the first country to
establish a bilateral trade agreement with China and in 2007 China replaced the United
States as Santiago’s main trading partner. On the other hand, Brazil already supplies to
China with US $ 1,7 billion in agricultural products, fundamentally soy, that represent an 8 %
of Brazil’s total agricultural exports. (Davy, 2008)
While in the second group, Mexico and much of Central America nations have
focused so heavily on low-skill, labor-intensive industries as a motor for growth and
employment. Many of these businesses import components for electronics and apparel for
assembly
and
subsequently re-export them to the United States, thereby avoiding the regular tariffs
structure. In other words, Mexico and Central America have built a substantial portion of their
productive economies on the same stage of the production process that China excels in, but
without the global comparative advantage. This strategy made sense in terms of the region's
comparative advantage with the United States, that is, low-skill, labor-abundant production-but China's rise calls into question the long-term viability of Mexico and Central America's
strategy. (Davy, 2008)
The third group - the group with political “ideological” approach to China- is
commanded by the “Bolivarian socialism” of the Venezuelan President Hugo Chavez. An
increasing chain of official governmental visits between Venezuela and China has been
developed. According to Shijue Jiang (2007), it is one of the three factors characterizing the
recent development of Sino – Latin American relations in general, and Venezuela is not the
exemption. In April 2001, the then PRC president Jiang Zeming visited Venezuela and Cuba,
among other states in the hemisphere. In 2004 Venezuelan president Hugo Chavez visited,
by third time, China. In 2005 the vice president Zeng Qinghong visited Venezuela.
China is primarily interested in Venezuela as an energy supplier because of oil, and
Venezuela counts on China as a strategic and ideological partner to reach its goal to
diversify Venezuela’s oil’s export, and to find out a kind of political support in Hugo Chaves’
ideological confrontation with the United States.
A sad example of the damage that the tension between China and Taiwan in the
hemisphere can cause in other spheres of the international life it is when, in 2007, the
Venezuelan government refused to grant the visas to the players of the Taiwan team that
should attend the XIII Base Ball World Championship to be held in Venezuela. In response
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to the Venezuelan action the International Base Ball Federation canceled the championship.
(aporrea.com, 2007)
CONCLUSION
China is emerging as a key player in world politics, so the Chinese foreign policy
regarding Latin American and Caribbean region has shown dramatic changes that
underscore Beijing’s putting a priority of economic growth and its interest in assuming a
larger role in regional affairs. For mainland China, Latin America and the Caribbean are very
important in its strategy against Taiwan.
People’s Republic of China has used a mix of economic diplomacy, and political
moves to keep Taiwan from claiming independence. In the region, China’s strategy has
focused on to marginalize Taiwan. The growing influence of PRC has well increased
pressure on Taiwan to maintain its formal diplomatic presence in Latin America and the
Caribbean, and the struggle between these two Asian nations in Latin America and the
Caribbean has been intensified during the last five years.
Although diplomatic relations with one partner do not preclude efforts to attract
investment and boost economic trade with the other, it seems obvious that under the
pressure done by PRC, the Latin American and Caribbean states could see the
normalization of relations with mainland China potentially more attractive and successful
than to maintain the current ones whit Taiwan.
The confrontation between these two Asian states is a critical question that should be
resolve for the Chinese themselves. Unfortunately, regarding this point I have more
questions than answer, thus the intention of this paper it is no more than to do a wakeup call
to the scholars and other researchers to keep an eye on the possible isolation of Taiwan.
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