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During President Hu’s first trip in 2004 he toured Brazil, Argentina, Chile and Cuba, where he signed 39 bilateral agreements and predicted trade with the region would hit $100 billion over the next ten years. President Hu was accompanied by some 400 business executives, including representatives from China Minmetals and Baosteel Group, two of the country’s largest corporations.

The Chinese Government has since gone on a commodities binge in the region. Chile and Peru now send 10 per cent of their exports to China, mostly copper. Roughly 8 per cent of exports from Cuba and Argentina head to China, according to the Economic Commission for Latin America and the Caribbean (ECLAC).

China also acquired a stake in the Argentine oil and gas firm Pluspetrol, as well as investments in Ecuador, Colombia and even Mexico. While trade has risen fast and is forecast to reach $40 billion this year, Chinese investments so far are a mere trickle — only $900 million out of a total of $54 billion in investments that flowed into Latin America last year. But that is expected to change.

“The Chinese are interested in investing in things that smooth their way in the region,” says Albert Keidel, China programme senior associate at the Carnegie Endowment for International Peace in Washington and a former Treasury official in the Bush Administration.

For example, China is a partner with Brazil in establishing a rail link to the Pacific to cut transportation costs of iron ore and soya beans. Similar investments are being made in Chile’s ports.

President Hu has pledged more Chinese investment in South American companies, roads and ports. In return Brazil, Argentina, Chile and Peru have all bestowed “market economy” status on China, which makes it harder for those countries to impose trade restrictions.

So far, Washington appears largely unconcerned by China’s penetration of its sphere. China has not shown much ideological interest in military and security ties with the region. “What they are doing is buying whatever they can and selling whatever they can. It’s strictly a mercantile, commercial relationship,” Rocha says.

US officials are keeping a close eye on China’s role in Cuba and Venezuela, the only Latin American countries openly hostile to Washington. In 2000 China was reportedly granted access to a former Soviet electronics espionage base outside Havana, known as Lourdes, to intercept US telephone communications.

Officially, a February 2004 agreement refers only to a technical communications co-operation, including broadcasting of the Radio China International signal. In Venezuela, President Chávez has staked his so-called Bolivarian revolution to undermining US political and economic influence in the region. Trade with China fits the bill perfectly.

During a visit to Beijing in 2004, Chávez said that shifting exports to China would help to end dependency on sales to the US. He has invited the Chinese National Petroleum Corporation (CNPC) to participate in exploring Venezuela’s rich Orinoco belt. Meanwhile, the CNPC has invested $300 million in technology to use Venezuela’s Orimulsion fuel in Chinese power plants.

But US officials, while not hiding their concern over Chávez’s commitment to democracy, have had little to say about China’s presence there.

“Chávez has made a strategic decision to make a rupture with us. We are going to avoid that,” Thomas Shannon, the State Department’s senior diplomat for the Latin America region, said.

Speaking this month in Miami, Shannon, a diplomat with a doctorate in politics from Oxford, emphasised that the US’s main concern was not the ideological leaning of individual governments but the strength of democratic institutions in those countries. He put the recent “populist outpouring” down to resentment over social inequalities and the failure of institutions to channel legitimate grievances.

“We have to engage these countries,” he said. “We can’t try to wall them off or condemn them.”

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