Opinion

China isn't really taking over the world

By Ioannis Gatsiounis (China Daily)
Updated: 2010-08-20 06:10

Perhaps nowhere is this more apparent than in Africa, where China has been depicted as the shrewd winner of a neocolonial scramble for resources, offering developmental assistance - mainly in the form of low-priced manufactured goods, infrastructure investment, and soft loans. No doubt China's presence on the continent has expanded considerably in recent years. But the US remains sub-Saharan Africa's largest trading partner, accounting for 15 percent of Africa's total trade versus 10 percent for the Chinese.

Indeed, the bulk of China-Africa trade is made up of Chinese oil imports from five countries, and even with respect to oil - said to be at the heart of China's drive on the continent - America holds a sizable lead. China imports 17 percent of all African oil compared with 29 percent for the US (and 35 percent for Europe). Western companies are the leading foreign partners in oil projects in Nigeria, which is sub-Saharan Africa's largest oil producer, and in the continent's largest emerging oil producers such as Ghana and Uganda.

This underscores America's deeper and more diversified engagement not only with Africa, but many other parts of the world, via international institutions as well as humanitarian aid and military assistance. Despite high-profile ties with Zimbabwe and Sudan, China has little military presence in Africa and almost none in Latin America, and is still overshadowed by the US even within its own backyard. Last month in Hanoi, for instance, the US was a welcome presence at the ASEAN Regional Forum, Asia's largest security meeting, amid growing concerns about China's military buildup.

US President Barack Obama plans to invite ASEAN leaders to a second US-ASEAN meeting in the fall, and ASEAN foreign ministers have invited the US to a regional dialogue, known as the East Asia Summit, which diplomats reportedly said would help counter Chinese influence in the region.

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In July Vietnam's Deputy Prime Minister Pham Gia Khiem said America and Vietnam are "leaving the past behind" as they strengthen commercial and military ties. Their two-way trade leapt from $2.91 billion in 2002 to $15.4 billion last year. The US has made similar progress with Indonesia, signing an agreement in April that will allow greater American capital flows into Southeast Asia's largest economy.

Of course, Asia is still the one region in the world where China now dominates regional trade - overall trade between China and the rest of the continent hit $231 billion versus the US's $178 billion in 2008. But most of the flows are in intermediary goods of low value. This trade does not foster the skills transfer that Southeast Asian countries so desperately need in their bid to move up the technology ladder. Countries such as Malaysia, Singapore, Vietnam, Thailand and Indonesia still rely on entrepreneurial, technological, and educational engagement with the US for that. And America still accounts for a far greater chunk of regional foreign direct investment - 8.5 percent versus China's 3.8 percent, or $3.4 billion to $1.5 billion, in 2009.

In other places where China is increasingly prominent economically, such as Latin America, the US still has important cards to play as well. Last year, China replaced the US as Brazil's leading trading partner, and it's now the second-largest trading partner of Venezuela, Chile, Peru, Costa Rica, and Argentina. But while Asia's overall trade with the region (driven largely by China) rose 96 percent over the past decade, the US saw an even greater rise - 118 percent - in total trade.

As in many regions, there are cultural and geographical barriers to closer China-Latin America relations. "The US and Latin America are doomed to live closely together, and China can never compete with that," says Kevin Casas-Zamora, a Latin America expert with the Brookings Institution.

America's soft-power appeal in the region dwarfs China's, resonating through popular culture, language, and ideals. Soft power is also very much at play in Africa, particularly given President Obama's connection to the region (everything from restaurants to car washes are named after him). Signs of American culture, from film to music to fashion, permeate the region.

This is an abridged version of an article published in the August 9 edition of Newsweek.