Wednesday, 26 June 2013

China Makes Sizable Investments in United States' Backyard

The global economy has changed a lot in the last twenty years as it has seen a doubling of it’s value and is heading toward another doubling by 2020 and a further doubling by the start of 2030. What this forecast has spawned is a trend around the world with many countries and regions investing heavily in their port infrastructures to be able to compete in the new and more prosperous global economy in the future. If some countries did not have the money to do it themselves, they have looked to China and the UAE for help and they have been more than willing to help them out with their abundance of liquid cash.

Once-poor regions in the world are now starting to emerge as viable contributors and competitors in the new world economy including Africa and many South American nations. South America has long been considered America’s backyard but lately China has been making some huge investments into the region while the United States has been busy struggling with their past investment mistakes. As a result the U.S. could not take advantage of the numerous investment opportunities that have come up as they simply did not have the money invest if they wanted to. The US still has many holdings throughout the South American region, but they have lost their competitive bidding edge.

The recent announcement of China forming an alliance with Nicaragua to build the world’s biggest shipping canal in Nicaragua almost came out of nowhere and it has raised eyebrows in the United States as well as all around the world. It will certainly give China a massive economic advantage over the United States in that part of the world and many experts seem to agree that it could be a turning point in the direction of the future global economy, when it is completed by around 2020. China has invested billions of dollars in Brazil, Argentina, Peru, Chile, Colombia, Panama and Venezuela in recent years and are expected to continue to invest in these countries as the world’s most populous nation prepares for it’s own future by forming alliances with these strategically located nations.

China has a large population to feed and it is growing at a unprecedented rate along with it’s prosperity levels and their consumer base is increasing at a staggering rate, compared to previous years. China is simply taking advantage of good investment opportunities in South America. The U.S. would have it could have. The fact that the United States has not invested in South America, at the same level as China recently, is concerning to some American leaders as they see China's investments as essentially buying up world interests; including properties right in the U.S.’ backyard. There is no doubt that China’s influence in South America has taken a sharp rise in the past few years and the United States has been able to do little about it. Let’s just hope they make good neighbors in the future.

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