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South America's China Syndrome

In his thoughtful and engaging review of my book, Revolution! South America and the Rise of the New Left, Michael Busch raises an important point (see “Something is Happening There,” Brooklyn Rail, June 2008). Busch takes issue with the book for not addressing South America’s growing economic ties to China. “Throughout South America,” he writes, “Chinese direct investment and trade have increased.” Currently, South America exports its resources not just to the United States but also to China in exchange for inexpensive manufactured goods. “As a result,” Busch observes, “local industries are undercut, and the region’s economic development has gradually been cast in doubt.” Busch would like to know whether South America’s increasingly close economic relationship with China will give rise to “classically colonial trade policies” which encouraged great social inequities in the past.

During the course of my travels to South America I had extensive conversations with experts, activists, and government officials about this exact point, though for reasons of space it proved difficult to really delve into the issue. Simply to address the current trajectory of the left in South America and its distancing from the u.s. required a huge effort, though to be sure China will be a serious concern in the not too distant future. In order to spur the creation of a so-called “multi-polar” world South American nations have indeed boosted exports to China. Having suffered through the ravages of “neo-liberal” economic policies backed by Washington and the International Monetary Fund, it’s somewhat understandable that countries throughout the region would seek to build up trading relationships with powerful nations other than the u.s. Right now South America is trying to recover from the social catastrophe of the past twenty years and sees China as a convenient market for its raw resources.

Busch thus raises some valid long-term points. Historically, the export model of development encouraged by large international financial institutions and the United States has spurred gross inequality and social tensions. The question now facing peoples throughout the region is whether China trade will result in more of the same. There are already disturbing indications that this might indeed be the case. In April, I penned an article entitled “Soy Has Its Consequences” for Counterpunch. In the piece I discussed Argentina’s increasingly close economic ties to China, which has contributed to political and social tensions in the South American nation. Argentina, with its fertile soil and favorable climate, has been devoting much of its land to soy, which later gets shipped abroad to China. Within the Asian country there’s an insatiable demand for soy—China simply does not have the necessary land or water to produce more of the crop.

Many Argentine cattle ranchers have been tempted to switch over to soy, given the increased market prices and the Kirchner government’s export caps on meat. Some experts say Argentine soybean farming is currently three times more profitable than cattle ranching. Indeed, the trend against ranching is so powerful that today half of all cultivated farmland in Argentina is dedicated to soy. Soy production has increased owing to the fact that soybeans need just eight months to reach harvest, far less than the 2 -?3 years needed to raise a cattle herd. While researching my book, I interviewed Gonzalo Sánchez Paz, a lecturer in international affairs at George Washington University and an expert on South America’s ties to Asia. “You cannot understand the miraculous Argentine recovery after the financial crisis of December 2001 without considering the boom in soy exports to China,” he told me.

On the other hand, though the soy trade has represented an economic boon, it has exacerbated social tensions and has fostered the emergence of a new export elite in Argentina, one that has become an important political actor in its own right. Concerned about rising inflation on domestic food goods, the cash-strapped regime of Kristina Fernández de Kirchner recently sought to check the growing power of the farmers by raising export taxes from 35% to 45%. The farmers reacted angrily by going on strike, presenting Fernández with her first political crisis as Argentina’s new president. Blockading roads in protest of the tax increases, the farmers strangled the flow of farm goods to cities and caused acute shortages of meat, milk and fresh produce across the country. At a political rally attended by 20,000 supporters including trade unionists, Kirchner railed against the soy farmers. “Is it good that highways are cut so that food cannot be transported to market?” she asked. “Don’t do more harm to the people, lift the roadblocks so Argentines can get food,” she implored. Unfortunately for Kirchner, the soy farmers have shown no sign of giving in and have doggedly pursued their protests and road blockades which have so disrupted the country over the past several months.

The knock-on effects of China trade are most evident in Argentina, but we may see social problems in other neighboring countries. In Brazil, farmers have been rushing to plant soy on the fringes of the Amazon rainforest, thus exacerbating environmental problems. Even worse, Brazilian planters have been spreading into Paraguay en masse, where increasing amounts of land have been thrown over to soy production. Such developments pose a thorny problem for Paraguay’s incoming president, Fernando Lugo, a progressive who has long campaigned for land reform and social justice in the countryside. Elsewhere in South America, China is gobbling up key economic resources in its effort feed its voracious drive towards industrialization. So far, China has not backed up its economic influence in South America with the kind of political and military muscle that has characterized u.s. foreign policy in the past. However, the Asian Tiger’s rising investment profile could give rise to unforeseen social consequences in the long term. China will invest $1.5 billion in the Bolivian onshore oil and gas sector. China is also interested in developing the country’s largest tin mine, Huanuni. Meanwhile, the Asian nation has imported millions of tons of oil and iron ore from Brazil and has signed a deal to help construct a major natural gas pipeline. In Chile, China will set up a joint venture with the state copper company, Codelco. Meanwhile, a Chinese-led consortium bought oil and pipeline assets for $1.4 billion in Ecuador. In Venezuela, China has invested millions in the oil sector.

During my travels through South America, political activists who I spoke with did not seem that concerned with China’s role, though that could change in the near future. In Chile, the government’s growing ties to China have led to some controversy. In 2006, the Bachelet government signed a free trade deal with China in an effort to boost sales of copper, fruit, and fish oil. Since then, Bachelet has traveled to the Asian nation in an effort to improve relations. The Chilean president boasted of figures showing a $1.4 billion increase in trade between the two nations last year. “When Chile considers how to continue its development, Chile thinks big,” Bachelet remarked. “And to think big means to think China.” When asked by the press about the Chinese crackdown in Tibet, Bachelet was tight-lipped, lest she offend her trade partners. “Chile has taken a clear stance on the issue through our Chancellery [Ministry of Foreign Relations],” she remarked. “The Chinese government knows of this position, and it understands it and respects it.” Chinese troops have brutally silenced protests calling for independence in Tibet and have reportedly killed scores of people. Nobel Peace Prize winner the Dalai Lama has condemned the repression and requested an international investigation.

Bachelet, whose regime boasts of its adherence to human rights and overcoming the brutal military legacy of General Augusto Pinochet, has fallen under heavy criticism for its “neutral” position on human rights abuses documented in Tibet and China in the build-up to the June Olympic Games in Beijing. To her discredit, Bachelet has ignored calls by Amnesty International to take a tougher stance in denouncing such violations. Chilean officials have unconvincingly justified Bachelet’s position by claiming that business and human rights are two distinct areas and should be treated as such when making political decisions. Hoping to outfox Bachelet, Chile’s lower-house Chamber of Deputies recently approved a resolution calling upon the country’s Foreign Minister Alejandro Foxley to “condemn the violence and repression in Tibet and request that the Government of China open direct conversations with the Dalai Lama to find a peaceful solution” to the conflict. The resolution passed 35-8, with one abstention.

In a further slap in the face of progressive forces, however, the Bachelet government opposed the resolution. In seeking to blunt calls from the Chamber of Deputies, Bachelet has resorted to some rather remarkable moral acrobatics and jujitsu. Presidential spokesman José Antonio Viera Gallo actually argued that taking up the cause of the Tibetan people could invite similar criticisms of Chile. Remarking upon an outstanding conflict with indigenous peoples in Chile’s south, he declared: “I don’t know if we would like it if a foreign parliament opined on situations like that of the Mapuche.” The Mapuche have long suffered abuses at the hands of the government and accuse the security forces of killing indigenous activists and occupying Indian lands. In an ironic twist on the Tibet imbroglio, the pro-indigenous Web site MapuchExpress remarked, “The government of Bachelet and Viera Gallo know that they have their own Mapuche: Tibet.”

Bachelet’s caving on human rights is all the more puzzling in light of her own personal story. Bachelet’s family suffered considerable violence during the 17-year regime of former dictator Pinochet. Bachelet’s father, former Air Force General Alberto Bachelet, died from a torture-induced heart attack and Michele and her mother were forced into exile. Regardless, Chileans are starting to see through Bachelet’s hollow rhetoric on human rights. During a recent pro-Tibet demonstration in front of Santiago’s presidential building, Amnesty International coordinator Pablo Galaz remarked, “Chile maintains a very weak and hypocritical position today” regarding human rights in China. One onlooker remarked, “It’s embarrassing...At the bottom of it, it’s about how much does Tibet weigh in copper? That’s how I’d sum up the government’s attitude.”

Given Chile’s embrace of free trade, it’s perhaps not too surprising that Bachelet would kowtow to China on human rights. It’s particularly jarring, however, to observe Hugo Chávez’s firm embrace of the Chinese “communist” government. Venezuela has a lot of economic interests at stake in its trade with China. Chávez has signed a number of agreements with the Asian nation to deepen technological and energy cooperation. In particular, Venezuela seeks to increase the supply of oil to China. Venezuela’s strategy is to diversify its markets so as not to depend so much on supplying oil to the United States, its political adversary. Chávez’s ultimate goal is to create a more “multi-polar” world in which the United States cannot act unilaterally.

Chávez’s efforts to counteract u.s. imperial designs are understandable, but China is hardly a model country to lead a multi-polar world. Currently, China’s human rights abuses are staggering. For example, the authorities have detained hundreds of thousands of people, including political activists, for “reeducation” programs, or (more to the point) forced labor camps.

Given Chávez’s championing of labor protections in Venezuela, his support for China is disappointing. According to Human Rights Watch, Chinese workers are forbidden to form independent trade unions. Because Chinese workers have few realistic forms of redress against their employers, they have been forced to take to the streets and to the courts in an effort to press claims about forced and uncompensated overtime, employer violations of minimum wage rules, unpaid pensions and wages, and dangerous and unhealthy working environments. “Workers who seek redress through strike action are often subject to attacks by plainclothes thugs who appear to operate at the behest of employers,” writes Human Rights Watch in a recent report. In one recent incident, a group of 200 thugs armed with spades, axes, and steel pipes attacked a group of workers in Guangdong who were protesting over not having been paid for four months; they beat one worker to death.

If Chávez fans had any doubts about where the firebrand politician stood on the question of international human rights, the Venezuelan leader has surely cleared up the confusion by defending China’s nasty crackdown in Tibet. As I remarked in a recent article (provocatively titled “Enough with the Hugo Chávez Hero Worship”) that appeared on World War 4 Report, Chávez has ridiculed attempts to protest the Olympic Games. Putting his foot in his mouth, Chávez stated that Venezuela was strongly behind Beijing and that Tibet was an integral part of China. True to form, Chávez added, “The United States is behind all that is happening as it wants to derail the Beijing Olympics.” The Venezuelan leader added that the protests against the Olympic torch were an example of the u.s. “empire” “going against China” and trying to divide the Asian powerhouse. “America is the main force behind whatever is happening in Tibet,” Chávez said, “and its motive is to create problems in the Olympic Games.” Such comments are a slap in the face of socially progressive forces in South America as well as those on the u.s. left, which have been generally supportive of the Pink Tide sweeping across the region.

But aside from human rights, what are the likely economic effects of South American nations’ trade with China? In his review of my book, Busch wonders whether growing commerce with such nations as China will really lead to sustainable development and social equity. The answer is, probably not. While the Asian nation is willing to help construct ports and railroads, such infrastructure projects will be linked to the transport of raw materials. In this sense China is little different from the United States, which historically sought to promote the type of “development” which would merely facilitate the extraction of South America’s resources. Nevertheless, there is some reason to be optimistic about South America’s long-term political prospects. Today, in Argentina, Bolivia, Ecuador, Brazil, and even Chile, a whole host of social movements have emerged and across the continent indigenous peoples, environmentalists, workers, and landless peasants are at the vanguard of political struggle. As China moves more forcefully into South America, the Asian nation can ignore such forces only at its own peril. Having fought a long and protracted battle with local globalizing elites backed by Washington, these social movements are now pressing their respective governments to adhere to progressive principles. In Africa, where China has been busily extracting raw resources such as oil, the Asian nation has propped up brutal regimes that fail to observe any semblance of human rights. In the absence of any real organized left in Africa, China has been able to achieve its economic goals without too much resistance. In South America, however, the story could unfold quite differently.


Nikolas Kozloff

Nikolas Kozloff is the author of Revolution! South America and the Rise of the New Left (Palgrave-MacMillan, 2008).


The Brooklyn Rail

JUL-AUG 2008

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