capecoralblogger

overeign Man Notes from the Field Date: April 7, 2011 Reporting From: Santiago, Chile

In Business on April 7, 2011 at 6:47 pm

Sovereign Man
Notes from the Field

Date: April 7, 2011
Reporting From: Santiago, Chile

Earlier this week, I wrote to you about my observations on the ground here in South America– I’m seeing an influx of foreigners from China in Santiago. As I reported, many are here doing business related to Chile’s vast deposits of lithium and copper, while others are here to scoop up cheap, fertile farmland.

Property in Latin America is some of the best-priced in the world on a risk-adjusted basis; with a dust bowl raging in Asia and food prices soaring to record levels, the Chinese are looking to diversify their agricultural supply… quickly.

Farmland in this part of the world is rich, productive, and cost effective; foreigners can generally hold title to land, and records are fairly clean, especially compared to what the Chinese are used to dealing with in Africa and southeast Asia.

Aside from the economic and practical benefits, there is also a long history of Chinese influence in Latin America.

As far back as the 1800s, tens of thousands of migrants workers from China came to Panama to work on the ambitious Panama Railroad project, the precursor to the canal. When Panama won its independence from Colombia in 1903 (courtesy of a revolution engineered by JP Morgan), thousands more arrived to work on the canal.

In the 1850s and 1860s, over 100,000 Chinese immigrants settled in Peru as transitional laborers in the mines and sugar fields as slavery had just been outlawed in the country. Many more Chinese immigrants who saw the writing on the wall between World War II and the rise of Communist rule fled to Peru in the late 1940s.

There are also pockets of ethnic Chinese in Brazil and Argentina.

Through its extensive trade with each of these countries, China has cemented excellent relationships in Latin America despite being Uncle Sam’s often-neglected backyard. When President Obama made his first trip to the region a few weeks ago, it was an obvious attempt to rally support for Team America in the face of Chinese influence.

He spoke in Chile briefly, extolling the country for its ‘transition to democracy’ as if the brutal, US-supported military dictatorship of Augusto Pinochet from the 1970s and 1980s had just ended yesterday. To my Chilean friends, Obama just seemed out of touch and condescending.

The Chinese, on the other hand, are simply good customers. They’re easy to work with, they pay market price for Chilean products, and they don’t bomb other countries.

As such, it was no surprise to see the launch of the ‘Confucian Classroom’ project in Chile earlier this week, starting at the prestigious Santiago Instituto Nacional, which has groomed 16 Chilean presidents.

The Confucian Classroom project is an official Chinese government sponsored educational program that teaches Chinese language and culture to both students and local teachers. The program has been rolled out around the world, though it has met with
some resistance in the US. In Chile, the Chinese ‘market share’ is growing.

There are already 40 schools offering Chinese language instruction, a significant number for a country of only 18 million… and China is sending dozens of volunteer language teachers to Chile to expand the program.

South Americans are bright, intelligent people… when they see the Chinese investing time and money in the long term to make both financial and cultural inroads in South America, versus Obama’s haughty, flash in the pan, one time appearance, it’s fairly easy to see who will end up with the greatest influence in the region.

Frankly, I would welcome this. The world needs more influence from Asia, and less influence from bankrupt, bullying western governments and their junkyard dog enforcement organizations like the OECD and IRS.

Until tomorrow,

Simon Black
Senior Editor, SovereignMan.com

This article appears courtesy of SovereignMan.com: Notes From The
Field
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