A very interesting Alexei Barrionuevo article in The New York Times explores growing discomfort in Latin American capitals with Chinese land purchases. There are a lot of interesting issues here, but one that I don’t think is explored fully to my satisfaction is the question of why China is doing this. Here’s the capsule explanation:
The $7 billion agreement signed last month — to produce six million tons of soybeans a year — is one of several struck in recent weeks as China hurries to shore up its food security and offset its growing reliance on crops from the United States by pursuing vast tracts of Latin America’s agricultural heartland.
Even as Brazil, Argentina and other nations move to impose limits on farmland purchases by foreigners, the Chinese are seeking to more directly control production themselves, taking their nation’s fervor for agricultural self-sufficiency overseas.
If China wants to reduce its “growing reliance on crops from the United States” why doesn’t it just buy crops from Latin America? Why buy cropland? Purchasing title to the land doesn’t physically transfer it to inside the sovereign territory of the People’s Republic of China. Indeed, if the Chinese government wants my advice it seems to me that large-scale purchases of foreign land are a uniquely unsound investment since it would be so easy for some future Brazilian or Argentine government to expropriate the land. Indeed, maybe the Sino-American War of 2021 will be specifically sparked by Argentina nationalizing Chinese land-holdings on a large scale, prompting the dispatch of the People’s Liberation Army Navy on its first real blue water mission which, in turn, prompts President Jeb Bush to invoke the Monroe Doctrine and come to Argentina’s defense.