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China makes strategic investments in the region

Tuesday, February 6, 2018

Donald Trump’s choice of Rex Tillerson as US Secretary of State seemed to many in the business community as as a move that would promote international commerce, even in complicated conditions.

In a decade-plus experience of leading ExxonMobil, Tillerson dealt regularly with sensitive issues at high levels, including opposition to sanctions against Russia – and even forming a Russian affiliate of Exxon, thanks in part to a personal relationship with Vladimir Putin.

Times change.

Tillerson began his current tour of Latin America, expressing opposition to efforts by Russia and China to develop economic relations with Latin America, which – he said - “does not need new imperial powers that seek only to benefit their own people”, taking particular aim at what he described as Beijing’s unfair trading practices.

"China's offer always comes at a price," and involves "onerous loans and unsustainable debt.", said Tillerson.

In fact, China loans to Latin America amounted to some $9 billion last year, only about half as much as two years earlier.

On the other hand, Chinese investment in Latin America has largely switched from commodity-based sectors as oil and mining to projects that may be seen as sensitive, including Brazilian solar-panel factories, an Argentinian rail system, Peruvian energy and aluminum, and Mexican auto assembly.

Last November, Panamian President Carlos Varela and and his Chinese counterpart Xi Jinping signed a Memorandum of Understanding for cooperation in the framework of the Maritime Silk Road initiative.

Panama and China established diplomatic relations last June.