China today must face an immediate challenge: its energy dependence. For several years now it has tried to diversify its sources of supply of hydrocarbons, but the deposits of Central Asia and the Caspian Sea have turned out to be disappointing, with reserves much below preliminary estimates. Within the last decade China has been paying close attention to Africa and Latin America. However, the political and economic presence of Beijing is seen as a serious intrusion and has aroused anxiety in the United States.

The People’s Republic of China (PRC),8th importer of oil in 2000, and 4th in 2003 after the United States, Japan and Germany, will probably occupy second place before the end of this decade. Imports, which represented 27% of China’s oil consumption in 1999 and 37% in 2002, are likely to reach 45% in 2005. This energy dependence has become a major preoccupation of the Chinese leadership since this situation chimes ill with the world role China intends to play. Until 1990 three countries (Indonesia, the Sultanate of Oman and Iran) constituted its principal suppliers; diversification has become necessary because of the increase in consumption by China and diminishing Indonesian reserves. Understandably, Latin America has become coveted territory, as since its intervention in Iraq the United States has established its hold over all the countries of the Middle East except Iran, while the Caspian Sea deposits are proving to be disappointing, only representing, according to conflicting estimates, between 2 and 4% of world reserves. Latin America, with 9.7% of world oil reserves, could enable the PRC to reduce its energy dependence. China has become the second importer of Latin American oil, after the United States. In 2004, the region provided 2.4% of China’s oil supplies, at 83,000 barrels per day, ten times more than in 2001.

Omnipresence

Although present in Africa from the 1960s, China has never exercised political or commercial influence in Latin America. For a very long time the continent has remained veritable terra incognita for Beijing. Most Latin American governments awaited Richard Nixon’s visit to Beijing in February 1972 before establishing diplomatic relations with the PRC (Argentina and Mexico in 1972, Brazil two years later, and finally Bolivia in 1985). However, in recent years the PRC’s diplomacy has been particularly dynamic and determined in Latin America. The two-week tour by Hu Jintao in November 2004 through several countries of the region (Argentina, Brazil, Chile and Cuba) is an illustration of this. For the moment, Latin America is only a modest supplier to the PRC; nevertheless, bilateral trade is growing, from $12.6 billion in 2001 to 26.8 billion in 2003 and 30 billion in 2004. China’s strategy conforms to the following modus operandi: to ensure regular oil supplies in exchange for investment, and then to reinforce political and military cooperation.