April 2005

Over the past year, 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 twelve Latin American and Caribbean nations still maintaining diplomatic relations with Taiwan to shift their diplomatic recognition to China. Some analysts maintain that China’s involvement in the region could pose a future threat to U.S. influence. Others assert that China’s inroads in Latin America are marginal and likely to remain overwhelmed by the economic and geographic advantage of the U.S. market. Although many Latin American countries welcome the new Chinese investment, some view China as an economic threat, and are concerned that both their domestic industries and their U.S. export markets will be overwhelmed by cheap Chinese imports.