Latin America's new amigo

RIO DE JANEIRO, Brazil — All but invisible in Latin America a decade ago, China now is building cars in Uruguay, donating a soccer stadium to Costa Rica and lending $10 billion to Brazil's biggest oil company.

It's supplanted the United States to become the biggest trading partner with Brazil, South America's biggest economy.

China has moved aggressively to fill a vacuum left by the United States in recent years, as the U.S. focused on wars in Afghanistan and Iraq and the global economic crisis sapped its economy.

"China is rising while the U.S. is declining in Latin America," Riordan Roett, a professor of international relations at Johns Hopkins University, said by telephone while visiting São Paulo.

China is beefing up its embassies throughout Latin America, opening Confucian centers to expand Chinese culture, sending high-level trade delegations throughout the region and opening the door for ordinary Chinese to visit Machu Picchu, Rio and other tourism hot spots.

Aiping Yuan came to Rio de Janeiro from Beijing in 1997 on a lark, fell in love with the city and decided to stay. She studied Portuguese, and when Brazilian President Luiz Inácio Lula da Silva made his first visit to China in 2004, she opened a small school in Rio to teach Mandarin.

She began with six students and today has 300, including senior executives at Petrobras, the country's biggest oil company, and Vale do Rio Doce, the biggest mineral producer. Both have growing business with China.

"Chinese is the language of the future for Brazil," she said with a big smile.

China has forged a strategic alliance with Brazil that's allowed the two countries to partner with India and Russia in the so-called BRIC grouping (after the countries' initials), which is demanding a greater voice in global political and economic affairs.

China's main interest in Latin America has been guaranteeing access to the region's raw materials — principally oil, iron ore, soybeans and copper — to fuel its continued rapid growth. For many countries, there's a downside in the China trade, through which cheap imports have displaced local textiles.

China has been careful not to establish a military presence in the region, because doing so would antagonize the United States, which has considered Latin America to be in its sphere of influence since the Monroe Doctrine of 1823.

Trade between Latin America and China rocketed from $10 billion in 2000 to $140 billion in 2008. China is buying zinc from Peru, copper from Chile and iron ore from Brazil. It's shipping electronic equipment to Brazil, buses to Cuba, clothes to Mexico and cars to Peru.

Peruvian President Alan Garcia is trying to position his country as a major commercial hub for China in South America. He's hoping to capitalize not only on Peru's ports in the center of South America but also on a shared history: Thousands of Chinese immigrated to Peru in the 19th and early 20th centuries to do manual labor. These immigrants have left a legacy of the so-called "chifa" restaurants, which offer Chinese food throughout Peru.

China suddenly is rivaling the World Bank and the Inter-American Development Bank as a major lender to Latin America, at a time when China is flush with cash and many firms can't get access to bank loans.

Petrobras is borrowing $10 billion from China, to be paid off by shipping 150,000 barrels of crude per day to China this year and 200,000 barrels per day for the next nine years, said Erico Monte, a Petrobras spokesman.

Ecuador is borrowing $1 billion from China to finance investments by its state oil firm and $1.7 billion more to build what would be the country's largest hydropower dam.

Venezuela is buying high-tech oil-drilling platforms from China and is sending some 380,000 barrels of oil there per day as President Hugo Chávez diversifies Venezuelan exports away from the United States, his chief nemesis.

China uses its aid as a strategic tool to get countries to shift their diplomatic ties from Taiwan to the communist nation.

After Costa Rica became the first Central American country to establish ties with China, the communist country bought $300 million in Costa Rican bonds. More important to average Costa Ricans, China is spending $74 million to build a new national soccer stadium in San Jose. It's scheduled to open in 2011.

Not everyone in Latin America welcomes China's presence.

Chinese firms are taking business away from Mexican firms that exported clothes to the United States.

Peruvians have tried to block the expansion of a Chinese mining project near the border with Ecuador they say would pollute local rivers.

China has angered Brazilian companies by taking their place as the biggest exporter of clothing and textiles to Argentina.