Email
Password
Remember meForgot password?
    Log in with Twitter

article imageSouth America promised big investments by Beijing Prime Minister

By Holly L. Walters     May 20, 2015 in World
China's Prime Minister Li Keqiang announced during his recent visit to Brazil his country's intention to invest heavily in South America.
According to the Wall Street Journal, the investment announcement follows the recent slowing of the Chinese economy and is intended to help South American countries like Brazil, Peru, and Chile recoup money they lost due to China's declining demand for commodities and raw materials.
Instead of purchasing corn, soybeans, rubber, and other exports that once were in high demand by Chinese manufacturers, China has hinted it will begin buying more finished products from South America. Even more, it promises to invest significant amounts of money to help leaders of South American countries create better lives for their citizens.
Financial Projects and Proposals
The infusion of money comes at a time when Brazil is readying for its hosting duties of the 2016 Summer Olympics in Rio, reports the Business Insider. The country continues to experience an unsteady economy marked by lagging exports and rising inflation for consumer goods and housing.
Even with China itself overcoming its economic challenges, which includes a growth of only seven percent in the first quarter of 2014, Prime Minister Li promised during his visit that his country will spend $53 billion in South America over the course of the next few years. This money will be earmarked for projects that ideally should improve the economic conditions in South America and solidify China as one of the continent's premiere investors.
In fact, this $53 billion will follow an unprecedented $87 billion spent in South America by China in 2012. The amount of money the country is spending in the continent puts it well ahead of the United States’ investment, which amounted to close to $40 billion that same year. While the United States remains a formidable presence in South America, China's promise to spend even more money will overshadow America's long-time status as a financial benefactor of South American countries.
Relegating America to a secondary position of influence arguably could be China's main intent for wanting to spend so much money in South America. The money that it intends to spend in the coming years will be set aside for infrastructure projects like building new highways throughout Brazil, Argentina, and Colombia.
Additionally, some of the money has been proposed for building a canal across Nicaragua to improve the import and export of goods from China to the continent. China also has proposed building new rail lines across South America for this same purpose.
Concerns with China's South American Investments
While few people could argue South America needs more outside investors, concerns have been raised as to what specific purpose China has for wanting to spend money in this part of the world. Critics argue that the country primarily wants to expand its economic and political influence across the globe, and South America's need for cash provides China with the perfect opportunity to establish itself in this region, writes the International Business Times
Along with expanding its political and economic influence, China is thought to be expanding its military influence by investing in South America as well. In fact, the country intends to purchase and import 22 new airliners from the Brazilian company Embraer. Additionally, Brazil and China are thought to be in the early stages of allowing China to build military hospitals in the country and send military personnel to South America for training.
Finally, critics suggest that China could be getting South America's hopes up for nothing. Recent Chinese-funded projects in the continent have failed because of mismanagement, corruption, and economic factors like worker strikes. The proposed projects could ultimately leave South Americans without the finances and infrastructures they need to live better lives.
More about prime minister Li Keqiang, South america, Beijing
 
Latest News
Top News