THE MIDDLE KINGDOM IN LATIN AMERICA

It happened sometime between that sunny September day in 2001 when
George W. Bush offered his friendship to Mexico's President Vicente
Fox and last month when the State Department blessed Venezuela's fishy
recall vote count: Latin America faded from the White House radar screen.

Most Americans probably haven't noticed. But Beijing has and it is
inching into the void.

U.S.-Latin America policy is now defined by a costly drug war of
doubtful effectiveness, persistent and damaging International Monetary
Fund meddling, harassment of Latin militaries at the behest of
left-wing NGOs, an intelligence network that counts coca plants for a
living and a naive attitude toward bullies like Venezuela's Hugo
Chavez. This has left Latins scratching their heads about Dubya. Of
course, these are not Bush values. But they are the priorities of his
State Department and other agencies and by default have become the
U.S. agenda in the region.

Enter China, with money and markets to offer. No wonder Sino-Latin
relations are experiencing an uptick. This doesn't yet present a
serious military threat, but China, along with its trade endeavors, is
becoming a political rival of the U.S. in its own backyard.

Of most immediate interest is China's growing presence and influence
around the Caribbean. A relatively minor but interesting example is
the deployment to Haiti of a 130-man Chinese riot-control police unit,
scheduled to arrive in mid-September to join the United Nations
stabilization mission. While it is true that the U.N. needs
peacekeepers for this thankless job in Haiti, it is at least mildly
ironic that China's police, notorious for their high-handed and
sometimes brutal treatment of Chinese citizens, are now charged with
protecting human life in Haiti.

Yet it is no more surprising than the fact that China has won observer
status in the Organization of American States, a body ostensibly
obsessed with democracy.

Hugo Chavez and Jiang Zemin in 2001

Then there's the Chinese military relationship with Cuba. In a staff
report to be released on Tuesday, the Institute for Cuban and
Cuban-American Studies at the University of Miami lays out some
details: "In February 1999, [China's defense minister] Chi [Haotian]
visited Havana to finalize an agreement with Cuban counterpart Raul
Castro to operate joint Sino-Cuban signals intelligence and electronic
warfare facilities on the island, equipped (at China's expense) with
the latest telecommunications hardware and fully integrated into
Beijing's global satellite network. By March 1999, PLA officers and
technicians began monitoring U.S. telephone conversations and Internet
data from a new cyber-warfare complex in the vicinity of Bejucal, some
20 miles south of Havana."

The report adds: "A second installation, capable of eavesdropping on
classified U.S. military communications by intercepting satellite
signals was also constructed on the eastern end of the island, near
the city of Santiago de Cuba."

Rounding out the Chinese Caribbean trifecta is Venezuela, where an
anti-American demagogue, Hugo Chavez, delights in the kind of
Yankee-baiting his hero, Fidel Castro, has long practiced.

Cynthia Watson, a professor of strategy at the National War College in
Washington, has just spent a year studying China's influence in the
region. She says that Latin America is still below Africa in terms of
Chinese strategic interest. But it is getting more attention. "China
has a targeted need to find energy resources," says Ms. Watson, who
emphasized that her comments are her own. "They are interested in oil
contracts in Venezuela, Ecuador and Colombia. That's why Jiang Zemin
went to Caracas in 2001. They want to cultivate a relationship that
would put them in a more favorable situation and they want to show
Latin American nations that they will treat them as sovereigns, that
they won't preach to them and they will act as partners." The idea,
which is likely to appeal to the likes of Mr. Chavez, Brazil's
President Luis Inacio "Lula" da Silva and Argentina's Nestor Kirchner,
is that China offers an alternative to dealing with the U.S. in both
economic and political terms.

Brazil is an interesting case. "The growing relationship between
Brazil and China is viewed as two emerging powers that can benefit
each other vis-a-vis the U.S.," says Ms. Watson. For China, "there is
the possibility of utilizing Brazil's space program which is on an
equatorial path. And Beijing would like to be the major market where
Brazil goes when it wants to sell its agricultural products. Lula has
not embraced the FTAA [Free Trade Area of the Americas] and may go to
Beijing instead."

Let's not forget that China has an obsession with erasing Taiwan from
the geopolitical map and that six Central American nations have
diplomatic relations with Taipei. This explains why China reportedly
has made a generous offer (some say $10 billion or more) to Panama to
fund an enlargement of the Panama Canal.

The effort to shut out Taiwan also explains why China is dropping big
bucks into the Caribbean, where the 14 independent English-speaking
nations are always hungry for handouts. The latest Chinese victory in
what policy wonks call "yuan diplomacy" came in March when Dominica
dropped its recognition of Taiwan in favor of Beijing.

The rise of China in the region could complicate U.S. efforts to
control illegal immigration, weapons shipments, the drug trade and
money laundering because China is cooperating with Latin countries
that are not especially friendly toward those efforts. Some of these
nations may try to use the Chinese alternative to challenge U.S. hegemony.

Given China's view of liberty, this cannot be a positive development
for the Americas. To counter it, the White House would do well to take
a hard look at the crippled diplomacy the State Department has been
practicing. It needs an agenda defined by American values that will
foster growth, sound money and open markets. As importantly, it needs
to re-examine whether the war on drugs, as currently waged, is doing
more harm than good.