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China isn't really taking over the world

By Ioannis Gatsiounis
0 CommentsPrint E-mail China Daily, August 20, 2010
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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.

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