China in Latin America
(taken from Americas Quartrly)
Military Exchanges
Senior defense officials from Latin America visit China routinely and Chinese officials reciprocate with high-level visits to Latin America. Students from Colombia, Chile, Mexico, Peru, and Uruguay have gone to China’s Defense Studies Institute, the Army Command College, the Navy Command School, and the Naval Research Institute.
Though this might seem impressive, the numbers do not come close to the thousands of Latin American students, military and civilian, who go to the U.S., Europe and other countries for advanced studies. Moreover, most of the student programs are one-way: to China. It will be a measure of increased trust and confidence when Chinese officers are sent to study in Latin American military schools. The U.S. has sent officers to study at various Latin American military schools for more than 50 years. Some of them have reached the highest ranks in the U.S. military.
Arms sales
The truth is that Latin America is not a large market for arms sales. Its military establishments are small by world standards and their defense budgets austere. The defense problems that many countries face are internal conflicts and public security, not conventional threats from over the horizon.
Latin American defense spending is forecast to grow from $63 billion in 2011 to $65 billion by 2014, with a mere 20 percent being available for procurement and the bulk going to personnel costs.3 While equipment modernization is imperative, only a few countries (Chile, Brazil, Venezuela) can afford it. And those countries have gone on the arms market to buy. According to Jane’s Defense Weekly Reports, the amount of arms recently sold or donated by China to Latin American countries is small.
In the past decade, China sold $58 million worth of Karakorum jets to Bolivia, upward of $150 million in air surveillance systems to Venezuela, and donated military materiel to Bolivia, Guyana, Colombia, and Peru, such as uniforms, trucks, jeeps, field kitchens, engineering supplies, tents, gloves, and hats. Peru received a mobile field hospital and other equipment in 2010 worth $300 million.
Technology transfer
The military technology transfer with Argentina is instructive. Argentina has produced sophisticated aircraft, including jets, since the 1940s and 1950s. The Fábrica Argentina de Aviones (located in Córdoba) was founded in 1927 and has manufactured over 1,300 aircraft of various types—including the excellent Pucara and Pampa—and today employs about 1,000 local workers, down from 9,000. Today, the Argentine government wants to resuscitate that capacity, and there may be a niche market for light multiple-use transport helicopters in South America, in addition to sales within Argentina.
In October 2011, Argentina announced an agreement with the China National Aero-Technology Import & Export Corporation to produce the CZ-W11 ultra-light helicopter. Apparently, a minimum production run of 40 will be necessary to make it economically feasible. The CZ-W11 is a reverse engineered version (with minor changes) of the Eurocopter AS 35OB Ecureil helicopter. A similar version of the latter, the Ecureil 2, is being co-produced by Eurocopter subsidiary Helibras in Brazil.
Brazil is pushing hard on the technology transfer front to enhance both its civilian and military industry. Though there is no specific agreement with China on military technology transfer, the two countries have developed and launched three Earth resources satellites to benefit nations that do not have their own satellites to monitor natural resources, agricultural zones and urban development. Four more are planned.
Brazil makes 50 percent of the satellite components. However, another effort at commercial collaboration foundered. Brazil’s Embraer and Aviation Industry of China agreed to jointly manufacture the midsize ERJ-145 passenger jet in Harbin. According to defense analyst R. Evan Ellis, Embraer viewed the collaboration as necessary to gain access to the Chinese market, which China resisted. The “relationship,” he added, “was also soured by the perception within Embraer that the Chinese had used the partnership to steal Embraer’s technology to support their own aircraft development.”
Venezuela paid a Chinese company, Great Wall Industries Corporation (GWIC), $406 million to develop and launch a satellite, the Simón Bolívar” in 2008. Similarly, Bolivia contracted with the GWIC to build the Tupac Katari satellite and launch it in 2013, at a cost of $300 million, of which $295 million would be financed by the China Development Bank.
