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China's big move into Latin America

Brazil's largest trading partner is no longer the US – it's China. Beijing is investing billions of dollars and filling a vacuum left by the United States.

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

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

"But China has shown little enthusiasm in becoming entangled in Chávez's larger goal of counterbalancing US influence in the hemisphere," Dan Erikson, a Latin American expert at the Inter-American Dialogue, a nonpartisan research center on Western Hemisphere affairs, wrote recently.

China demands little in return

Mr. Erikson said China was especially attractive to Latin American leaders because of its no-questions-asked foreign policy.

"The United States talks about the need for a battle against corruption, the need for transparency and improved human rights," Erikson told McClatchy. "China is less ideological in its approach to Latin America than the US is."

Still, 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 growing presence.

Chinese companies 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 that 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.

Whether it's seen as a friendly uncle or a ruthless competitor, China's continued expansion in Latin America seems inevitable.

EBX is expanding its port in Rio de Janeiro state to handle Brazil's iron ore exports to China and has signed an agreement with China's Wuhan Iron and Steel to build a mammoth steel plant next to the port.

In May, Lula made his third trip to China, spotlighting the fact that China has become Brazil's biggest trade partner.

The development surprised Rodrigo Maciel, the executive secretary of the Brazil-China Business Council, based in Rio.

"We weren't expecting China to pass the US as China's biggest trading partner until 2011 or 2012," Maciel said.

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Follow South American news at McClatchy's Inside South America.

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