China Looks to South America for Trade

In the past decade, China has grown its relationship with Latin America immensely. China has been very interested in South America’s natural resources and their potential for power production. China has been importing South American copper, soybeans, iron ore and many other materials for many years. They have also begun lending money to the major energy companies in the region.

While much of South America has worked very well with China, relations between China and Ecuador have not always been seamless. Ecuadorean President Rafael Correa does not seem to like the way that the Chinese have tried to do business. He questioned their demands concerning high interest rates and guarantees involving building a hydropower plant in the Amazon. 

Still, China has expanded their partnerships with South America so much that they are now in competition with the U.S. to be Brazil’s biggest trading partner. The Chinese Development bank has given loans to both Brazil and Venezuela that are to be repaid in oil. Now smaller banks in China are looking to expand their loan markets as the larger banks have already done. The loans from China are certainly readily available to South American businesses but they are not necessarily low-maintenance. The Chinese want to watch how business is being conducted with their money very closely.

The Chinese are determined to continue to be a powerful force in South American business and trading. The U.S. and Europe also have strong connections with these countries so it will be interesting to see where most of their exports are going in the next few years.