Where Xi leads, Abe follows? China, Japan compete in Latin America
| Beijing
No sooner had Chinese President Xi Jinping left Latin America than Japanese Premier Shinzo Abe arrived there, as Asia鈥檚 two largest economies and greatest political rivals vie for influence in a region traditionally under the sway of the United States.
Japanese officials insist that the timing of Prime Minister Abe鈥檚 trip (he arrived in Mexico聽on Friday聽and will also visit Colombia, Chile, and Brazil), starting two days after President Xi ended a tour of Cuba, Venezuela, Brazil, and Argentina, is coincidental, dictated by the Japanese parliamentary calendar.
But the coincidence highlights the worldwide competition between the two economic giants, whose relations have soured dramatically over a territorial dispute in the East China Sea.
Tokyo and Beijing are both chasing the same things. Latin America offers 鈥渉uge potential as an export market鈥nd secure provision of energy and raw materials,鈥� says Tomohiko Taniguchi, an adviser to the Japanese cabinet. 鈥淢r. Abe鈥檚 trip is long overdue.鈥�
Both too are seeking investment opportunities for their engineering companies in countries such as Brazil and Mexico, where lucrative projects for new roads, ports, and railways are on the drawing board.
Japan also has a more political item on its wish list: election next year to one of the rotating seats on the United Nations Security Council. China is deeply opposed to that.聽On Monday Abe met leaders from the Caribbean Community at a summit in Trinidad and Tobago; the regional group鈥檚 14 members will cast 14 votes in the election.
Head to head competition聽
The two leaders鈥� choice of destinations also reflects global political tensions: Xi celebrated Beijing鈥檚 friendship with US bugbears Cuba and Venezuela, while Abe is sticking to Washington鈥檚 allies.
鈥淐hina seems to actively court countries that are at loggerheads with the US, while Japan is reaching out to close partners of the US,鈥� says Martin Schulz, an economic analyst at the Fujitsu Research Institute in Tokyo. 鈥淧olitics and economics are mixed up very closely.鈥�
Both China and Japan are courting Brazil, Latin America鈥檚 economic powerhouse, where a burgeoning middle class holds out the prospect of a growing consumer market and government infrastructure plans promise valuable construction contracts.
They are going head to head in competing bids to develop Brazil鈥檚 railroad network, but there may be room for both of them on that and other projects, says Mr. Schulz. China has the advantage when it comes to providing the hardware and manpower to build gigantic infrastructure, while Japan is better placed to supply the computerized, high technology systems that run oilfields or railroad networks.
China has more money to hand out, though. In Brasilia, Xi announced Beijing would fund projects in Latin America with $25 billion worth of loans; in Buenos Aires he pledged a five billion dollar loan to pay for two Chinese-built hydroelectric dams in Patagonia. In Havana he rolled over Cuba鈥檚 debt and offered more soft loans and trade credit.
That generosity is likely to pay dividends, Chinese observers believe. 鈥淟atin American countries know how to handle themselves,鈥� says Wu Guoping, a Latin America analyst at the China Academy of Social Sciences in Beijing. 鈥淭hey understand very well the need to improve their economies, and since China is Brazil鈥檚 top trade partner and a very important trade partner for Mexico鈥 think their interests will lie with China.鈥�
In Tokyo, the Japanese government sees things differently. Beyond counting on the quality of Japanese products and what Mr. Taniguchi calls the 鈥渉uge untapped reservoir of goodwill鈥� in countries such as Brazil and Peru, home to nearly two million people of Japanese descent, Japan has another advantage, he says: its democracy.
鈥淲e have a natural constituency where political values are strong,鈥� says Taniguchi. 鈥淭he Japanese government has been slow to tap into that.鈥�
