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China's charm offensive

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Traditionally the backyard of the US, Latin America is fast becoming China's new best friend. Such is the apparent warmth of the relationship that Venezuela's president, Hugo Chávez, recently declared that Mao Tse-tung and 19th-century independence leader Simon Bolivar would have been great friends had they met.

Ideologically, communist China and free-market Latin America have little in common. But resource-poor China is eager to gain control of gas, copper and oil production to fuel its red-hot economy, which was the world's fastest-growing at 9% in 2004. Latin American leaders are only too happy to receive the promised billions of dollars in capital for tourism, mining and energy infrastructure and to have a guaranteed export market. Investors hope the new relationship will provide a platform for sustained economic growth from Mexico to Argentina, increasing creditworthiness in a region known for the volatility of its stop-start economies and unpredictable sovereign bonds.

As the Bush administration focuses on Iraq and its war on terror, China's leaders have been on a whirlwind tour of Latin America in the past six months, visiting Argentina, Brazil, Chile, Cuba, Mexico, Peru, Venezuela and various countries in the Caribbean.

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