While I tend to shy away from economics, this seemed like an interesting case study in the pitfalls of entering a strategic partnership with China.
THE high point came last November, when Hu Jintao, China’s president, arrived in Latin America to sign a series of trade and investment deals that heralded a new relationship between a rising superpower and a continent eager for economic growth. Nowhere was he greeted more warmly than in Brazil. Its left-leaning president, Luiz Inácio Lula da Silva, sees China as the country’s most promising business partner and an ally in boosting Brazil’s global influence.
Toasting their “strategic partnership”, Lula predicted that trade with China would more than double to $20 billion in three years. China promised to invest $10 billion in Brazil, mostly in infrastructure. Brazil, along with Argentina and Chile, recognised China as a “market economy”, thereby constraining their ability to retaliate against imports. Brazil hoped for Chinese backing for its bid for a permanent seat on the UN Security Council.
But the euphoria has already given way to a rising fear of Chinese imports, disappointment at the pace of investment and Brazilian anger that their government has weakened the country’s trade defences without getting much in return. China is “not a strategic partner”, says Roberto Giannetti da Fonseca, head of trade issues at FIESP, which represents industry in the state of São Paulo: it merely “wants to buy raw materials with no value added and to export consumer goods.” As for infrastructure investment, Paulo Fleury, a specialist in the subject, detects “lots of smoke and little fire”. Meanwhile, on the diplomatic front, China is opposing Brazil’s joint bid (along with Japan, German and India) for permanent membership of the Security Council, though this is to block Japan, its arch rival, rather than Brazil.
It’s not a disaster. They’re going to work together and they’ll each enjoy measurable trade benefits. But looking back at the elation of only eight months ago, there’s little doubt the bloom is off the rose.
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By Martyn
China “merely wants to buy raw materials with no value added and to export consumer goods.”? *Gasp* Surely not!
But seriously, and in all fairness, China is spreading itself very very thinly on the diplomatic front. It seeks to be all things to all countries. In the past, China was a small-to-medium-sized world player, but as China continues stalk the world with increasing (economic and diplomatic) clout, China’s plethora of multiple interests are coming home to roost.
Unlike before, China can’t be everbody’s best friend anymore.
I also think that, over time, these contradictions and inevitable conflicts of interest will come to the fore with avengence….the current Brazil-China “affair” is a perfect example of (in this case) China’s foreign policy priorites in direct conflict.
August 4, 2005 @ 2:13 pm | Comment
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By Nolan Winthrop
China is indeed showing itself to be not nearly the adroit master of politics that people, in 2004, were fearing that it would be. I agree that it has stretched itself thin, trying to be everything to everyone. (Try to please everyone and you’ll usually end up pleasing no one.)
Just as another example, after all that Germany has been doing (trying to lift the arms ban, sucking up to China, etc), you’d think China would reciprocate at least a little by backing a German seat on the UN Security Council and making one of Gerhard’s dreams come true.
But then again, China wants to keep Japan out of the Security Council more than it wants to give Germany a bone, hence:
Bolton, China Agree to Stop Bid by U.S. Allies for UN Power
Inconceivable! Bolton and China, of all things! Surely not! The sky has fallen. (this, for those who cannot tell, is in the ironic mode)
I think the conflicts of interest are already coming to the fore. I can’t help but be wryly amused by all of this.
August 4, 2005 @ 3:49 pm | Comment
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By Ckrisz
Another good article on how Chinese labor practices are received in Peru. That is, not very well.
http://today.reuters.com/business/newsarticle.aspx?type=naturalResources&storyID=nN20477936
August 4, 2005 @ 3:49 pm | Comment
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By Martyn
Nolan
Thanks for adding that great point about Germany and the UNSC. I totally missed that one. Exactly, in vehemently opposing Japan’s UNSC membership application, China has managed to hugely piss off Brasil and also Germany.
As you say, the French-German axis within the EU have been China’s most enthusistic cheerleaders, particularly with regard to the European arms-ban.
On top of that, I also don’t see India being particularly amused at China’s militant anti-Japan stance as India makes up the last of the G-4 countries applying for UNSC membership.
China’s actions certainly won’t do any harm to future Japan-India already increasingly warm relations.
Time will tell as to what price China will ultimately pay for its UNSC/Japan stance.
August 4, 2005 @ 4:04 pm | Comment
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By steve
“China would reciprocate at least a little by backing a German seat on the UN Security Council and making one of Gerhard’s dreams come true.”
Nolan, are you serious when you say “at least a little”?
It is ok if you just want to say somthing to bash china. Otherwise, you really need to do some thinking.
August 4, 2005 @ 4:36 pm | Comment
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By Martyn
steve, must you play the “bash China” card?
August 4, 2005 @ 4:38 pm | Comment
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By steve
“steve, must you play the “bash China” card?”
No. If his intention is not for bashing, I seriously question the intelligence behind that statement. Honestly, you really think that is “to reciprocate at least a little”?
UNSC is critical to fundamental interest to China and US. Anyone failing to realize this is simply naive.
August 4, 2005 @ 4:43 pm | Comment
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By Nolan Winthrop
Obviously I should have put huge blinking lights on the whole second paragraph (as I did for the fifth), saying: “This is in the ironic mode and should be read with a hint of tongue-in-cheek humour”. Perhaps then “steve” might have been able to recognize the rather British sense of humour I was I was using. Then again, perhaps not.
I take my amusement where I can, these days, which means, inter alia, the Australian Labour Party, the Greens, news coming out of Malaysia (Malaysian politicians are frequently good for a laugh, they take themselves so seriously, especially when they make the most ridiculous pronouncements), and the ways in which Germany and France have been playing “kiss China’s posterior” and received a kick in the teeth for their (well, at least Germany’s) troubles.
August 4, 2005 @ 5:28 pm | Comment
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By steve
“Germany and France have been playing “kiss China’s posterior” and received a kick in the teeth for their (well, at least Germany’s) troubles.”
Nolan, both sides (China and French-German) are just simply paying lip service. In the end, embargo is not lifted and textile import is restricted.
Regarding your statement, I have assumed you are kidding. But it seems that Martyn is taking your statement seriously. I can not help doing you a favor to remove any doubt on your judgement.
August 4, 2005 @ 6:15 pm | Comment
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By Nolan Winthrop
I might dispute the lip service bit, as Germany has put itself in America’s bad books with its efforts (however futile or superficial) on China’s behalf, particularly the arms embargo issue. That is still not something to be taken lightly, I daresay. Though not, perhaps, as much as the French annoy the United States.
It will still hurt, for Gerhard. He’s been wanting all the prestige of a permanent seat for Germany, which I find incongruous if only for the fact that Germany is a power in decline, with a stagnant economy and little or no military (1.2% of GDP on their military equals a really pathetic amount no matter how you count it). Committing Germany to playing an active role as a permanent security council member would be quite expensive, I don’t doubt, particularly if Germany wants to be seen as a “leader”. Now if we talk about India or Japan, we’re in a different ballpark, but I’ll leave off that.
And the two events (Brazil and Germany) are illustrative of how China is stretching itself somewhat thin on the diplomatic side, a fact that will likely increase as China gets more entangled in the global political system: it will be forced to balance competing demands upon its political and economic capital. In the end, it will be business as usual for everyone, but hopefully some of the euphoria over a “multipolar” world will be gone, and good riddance to it.
On a side note, I’d have dearly loved to be a fly on the wall in the German chancellor’s office when that news came in. It might do my German vocabulary some good: I’m sure I’d learn a whole new set of words that probably are not well defined in standard dictionaries.
August 4, 2005 @ 7:07 pm | Comment
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By Gordon
Related Story
August 4, 2005 @ 7:22 pm | Comment
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By steve
“as Germany has put itself in America’s bad books with its efforts ”
Germany stepped on US’s toe for Iraqi war. China will be dispensable for Germany if US-Germany relationship is at stake. That is why I am against lifting arm embargo. Argentina could use French weapan to sink British warship. French sided with Britain and Argentina was finished. It will be stupid for China to rely on European weapans.
As to UNSC, China supports Germany for UNSC as long as Germany does not drag Japan with it. China will not screw itself for Germany sake. Germans should be mature enough to understand that. The same can be said for India and Brazail.
August 4, 2005 @ 7:37 pm | Comment
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By Thomas
“As to UNSC, China supports Germany for UNSC as long as Germany does not drag Japan with it. China will not screw itself for Germany sake. Germans should be mature enough to understand that. The same can be said for India and Brazail.”
You are assuming the rest of the world respects China’s hatred of Japan. Why should the Germans, the Indians and the Brazilians “be mature enough” to understand that when many view the Chinese preoccupation with Japan to be slightly immature? There is really no other good reason to deny them a seat on the Security Council in light of how much they pay to the UN and in terms of their economic influence. No, their “maturity” in regards to this subject does not factor in.
August 5, 2005 @ 1:54 am | Comment
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By steve
“There is really no other good reason to deny them a seat on the Security Council in light of how much they pay to the UN and in terms of their economic influence. ”
If that is the reason for Japan UNSC seat, India and Brazil have no place in UNSC. You think they will like your argument?
China does not need to hate Japan to keep Japan out of UNSC. Argintina, mexico and Italy does not like their neighbour in UNSC either.
Realizing that disagreement does not mean hatred is a trait for maturity.
August 5, 2005 @ 4:46 am | Comment
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By Nolan Winthrop
In the case of Japan, I must note that denying them a permanent seat on the UNSC is fueled by more than an “immature” hatred. China and Japan are strategic rivals for pre-eminence in East Asia, and by China’s strategic calculus anything that can be done to ensure that Japan remains the lesser of the two is to be pursued. Giving Japan a permanent seat puts it closer to being viewed as a political equal of China, which the Chinese are determined to block, since they wish to have East Asia as their sphere of influence.
Of course, that’s China’s strategic calculus. The rest of the world certainly is not obliged to respect that calculus, or any silly vendetta that the two countries wish to pursue (I gather the majority of the irrational resentment seems to be on the Chinese side, though I haven’t bothered to tune in to this in any great detail). Personally, I’m in favor of Japan getting that seat, in part because of its unique position as a major donor to the UN, which of course means little since I’m not running things in the UNSC.
Certainly, while this looks practically like a fait accompli between the United States and China, it is unlikely to endear either side to the 4 unlucky nations that just missed out on their tickets to UNSC glory. And that’s something that may have to figure into future strategic and political considerations, particularly for China, which borders on India to the West and is neighbours with Japan to the East.
August 5, 2005 @ 5:04 am | Comment
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By steve
“denying them a permanent seat on the UNSC is fueled by more than an “immature” hatred”
Hatred is indeed immature. But blocking Japan UNSC bid is not. Keep this in mind. The number of countries co-sponsoring G4 proposal is about 20s. The number of countries co-sponsoring proposal rivaling G4 proposal is about 40s.
If Japan deserve the seat so much and everyone thinks so, why not just ask for its UNSC alone? US is on its side anyway.
August 5, 2005 @ 5:21 am | Comment
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By Thomas
“If that is the reason for Japan UNSC seat, India and Brazil have no place in UNSC. You think they will like your argument?”
You are reading what you want to in my argument instead of truly understanding the argument. There IS no good reason of denying Japan a place on the council for the reasons I stated above. Brazil and India have their own reasons — different reasons. I never said their reasons were identical to those of Japan.
So I restate: They should not have to respect China’s hatred of Japan….which besides the equally important fact that it would create a competitor in E. Asia (something none of the other appliacants should care about either) is the only reason China really has to deny Japan a seat. So once again, I say that the “maturity” of Brazil, India and Germany in regards to Japan being denyed because of China’s bellyaching does not factor in.
August 5, 2005 @ 9:32 am | Comment
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By mel_baruso
“Bolton, China agree to stop…”
So it’s one-man army Bolton, not the United States, the country, that’s screwing up the G4 bid.
China, of course, decided to the last man that they simply weren’t going to let anyone else share the throne.
August 5, 2005 @ 8:38 pm | Comment