China, the CELAC, and Venezuela

Venezuelan writer Luis Britto Garcia discusses the massive impact Chinese investment has had on recent Latin American development, while calling for strict outlines to be drawn to protect Venezuelan sovereighnty in the midst of heightened negotiation.


1) In previous articles I observed how recent radical changes had occurred in the economic structure which in turn affected political and cultural spheres in the world. I pointed to the Popular Republic of China, who became the primary economy on the globe in October of 2014 with a GDP of 17.6 billion dollars, exceeding the 17.4 billion of the United States. I added that it had been predicted this would happen by the year of 2020, but the powerful socialist economy got six years ahead, causing the IMF to calculate that by 2019, the Chinese GDP will be USD$26.9 billion while that of the US will be $22.1 billion. Keeping in mind that for Anglo Saxons [and most anglophones], a billion is one thousand millions. Additionally, China systematically buys gold, in a possible attempt to free itself from the hegemonic dollar which has no other backing other than its value printed in green ink.

2) It is not only China that advances towards the lead role in the global economy. I also indicated that between September 8th and 10th of 2014 the 21 countries of the Asia-Pacific Economic Cooperation laid out the Zone of Free Asian-Pacific Trade, whose economies represent over half of world trade. Those countries constitute the Asian Bank for Investment and Infrastructure, a possible counterweight to the International Monetary Fund, while China invested 40 billion dollars in the ‘Silk Route-‘ a network of ports, trains, energy ducts and fiber-optic conductors that connect Russia, Iran, Turkey, the Indian Ocean, and cities such as Berlin, Rotterdam and Venice.

3) This combination of phenomena cannot help but exercise its influence over Latin America; the Eastern limit of the Pacific Ocean will have another independent route toward the Atlantic and the Caribbean with the canal being opened across Nicaragua. Latin America and the Caribbean is the region with the most natural resources in the world in fresh water, biodiversity, hydrocarbons and other elements, with the added agricultural potential capable of feeding the entire planet and, that which distinguishes it from conflicted Africa, a prevailing common culture and path toward integration through organizations such as Mercosur, the ALBA, Unasur, the CELAC, and others. Chinese demand has made it so the impact of the current global economic crisis has not slammed Latin Americans so hard. China is the second commercial partner in the region, with an amount of 260 billion annual dollars [in trade], exceeded only by the United States. Latin America is an enormous market. Commercial exchange with China has doubled in ten years, and Peking estimates that in the next decade trade will reach 500 billion dollars.

4) The United States project of imposing the FTAA [Free Trade Area of the Americas] ended in resounding failure in 2005. As I write these lines, the same is not coming to pass between China and the ministers of the Community of Latin American and Caribbean States (CELAC) who met in Beijing on the 8th and 9th of January. The United States and Canada are on the outside of the colossal alliance of 33 countries who in these moments are defining their commercial relations with the new primary economic potential of the world. China has placed a fund of 35 billion dollars at the disposition of CELAC member countries, whose modalities of investment will be outlined in the forum.

5) Venezuela, for her part, has gotten since 2008 about US$50 billion in Chinese credits, which it pays for with 524,000 barrels of hydrocarbons daily, a quantity which will have doubled by next year. Numerous companies and businessmen of the Asian country have met with [president Nicolas] Maduro during his visit to Beijing. The Asian presence is a fact as irreversible for Venezuela and Latin America as it is for the rest of the world.

6) New investments should not make us confine ourselves to the dependent mono productive exporter model. They should not impose Free Trade Agreements that will prohibit us from defending our ecology or protecting our agriculture and industry. We should not bestow the investors with fiscal nor legal immunity in local courts, nor should we permit free ports where social and labor laws are suspended. It’s up to us to seal the conditions of this new presence, avoiding the mistakes of the past.

Translated by venezuelanalysis.com.