Sieren’s China: Beijing takes the plunge in Latin America

http://www.dw.de/sierens-china-beijing-takes-the-plunge-in-latin-america/a-18230924

China’s generous investment in Latin America, including key infrastructure projects, is a geo-political chess game, but it is also high-risk, writes DW columnist Frank Sieren.

Sieren’s China: Beijing takes the plunge in Latin America
Frank Sieren, Beijing
02.02.2015

In geo-political terms, the world's most significant infrastructure project can currently be found in Nicaragua. To the tune of $50 billion, the Chinese began work last December on a new canal linking the Pacific and the Atlantic. 280 kilometers long and 30 meters deep, The Nicaragua Canal will be able to accomodate ships too large for the Panama Canal, thereby bringing an end to its100-year long monopoly.

El Gran Canal is a prime example of how Beijing skillfully navigates the world stage. It uses favorable credit terms to win politically valuable contracts and major infrastructure projects that bring with them a supply of resources such as oil and natural gas, as well as foodstuffs such as corn.

The new waterway is only one of many ambitious projects that China is currently rolling out on the US doorstep. Earlier this year, Beijing hosted the first summit of the 33 countries that make up the Community of Latin American and Caribbean States (CELAC). Despite the many landmark decisions made at the meeting, it was largely ignored by the western media.

Further investments planned

Chinese President Xi Jinping, for example, pledged to ringfence a further $250 billion for China's partners over the next 10 years. But there's no such thing as a free lunch. In the past, Beijing approved loans in return for raw materials.