The United States has long referred to Latin America as its "backyard", and held a strong economic influence on its southern neighbors.
But someone else is moving in.
China's trade with Latin American countries has surged over the past few years, weakening the region's economic relationship with the United States. Now some of those nations - especially Brazil - want to strengthen U.S. ties to reduce their dependence on the world's second-largest economy.
China's Five-Year Economic Plan Calls For Slower Growth
China will take steps to cool off its red-hot economy in the next five years largely by increasing domestic consumption and de-emphasizing exports, Premier Wen Jiabao announced in an online chat with the country's citizens on Sunday.
Wen, China's leading economic official, said the government's official target for average gross domestic product (GDP) growth over the next five years will be reduced to 7% annually, down from a target of 7.5% in the past half decade.
China needs to slow economic growth to curb soaring food and housing prices and to restructure its economy, even as most developed economies around the globe struggle to sustain expansion.
Global Investing Strategies: A "Lightning-Round" Look at U.S. Stocks, the Dollar, Inflation and China
If you're a regular Money Morning reader, then you know that, d uring my appearances on national television or when I'm doing media interviews around the world, I frequently participate in something called a "lightning round " - a rapid-fire interview technique in which the announcer (and sometimes even audience members) run through a list of questions in rapid-fire order.
It's a technique that really puts you on the proverbial "hot seat." But I actually enjoy it: It forces you to think on your feet - which appeals to the former trader in me - and allows you to run through a bunch of topics in a very short stretch. In one way or another, each of these topics deals with global investing strategies.
I thought you might enjoy - and perhaps even find useful - a "highlight reel" of some of the best lightning-round questions that I've received in recent weeks, both in front of the camera and during the informal discussions that follow the presentations and broadcasts.
And we'll start with the topic that seems to be one of the most popular global investing strategies topics right now - gold.
To see what Money Morning's Fitz-Gerald sees for stocks, the U.S. dollar and inflation, please read on...
China's Trade Surplus Goal Signals It's Time To Dance With the Dragon
China's economic model has long been dependent on exports. Over the past several decades, the country has been the world's manufacturing floor, turning the "Made in China" stamp into a common fixture of goods sold in the United States and Europe.
But now China has made a new goal: It will double its imports by 2015, reducing the trade surplus to zero and releasing itself from an export-reliant economy. Beijing this year made this goal a key part of China's 12th Five Year Plan.
This bold new target represents a major shift in the balance of global trade and a new paradigm for which the United States is not prepared, according to Money Morning Chief Investment Strategist Keith Fitz-Gerald.
"The West needs to realize that the United States is dangerously close to being completely irrelevant to the Chinese growth model," Fitz-Gerald said in an interview. "China will not live and die by U.S. demand."
- GE China Deals to Bring in $4 Billion
China's Yuan Policy will be the Source of Much Discussion, but Little Change During President Hu's Visit
It's unlikely U.S. President Barack Obama will make much headway in his efforts to influence China's yuan policy when he meets with Chinese President Hu Jintao in Washington this week. President Hu made that abundantly clear on Sunday when he rejected U.S. arguments that allowing the yuan to appreciate against the dollar would help the government in Beijing tame inflation.
In response to written questions from The Wall Street Journal and the Washington Post, Hu said he favors greater cooperation with the United States on economic issues but he called the present U.S. dollar-dominated currency system a "product of the past," the newspapers reported on their Web sites.
The Chinese president said his government is fighting inflation with a package of policies, including interest rate increases, and that rising prices can "hardly be the main factor in determining the exchange rate policy," according to a transcript of the answers.
China Monetary Policy in Focus as Reserves and Lending Surge
China's foreign-exchange reserves climbed to a world record $2.85 trillion last quarter as bank lending continued to exceed the government's annual target, putting more pressure on the central bank to increase borrowing costs to dampen down liquidity and tame inflation.
China's foreign reserves jumped by $199 billion in the fourth quarter, a much larger increase than economists expected. The People's Bank of China (PBOC) may need to raise benchmark interest rates, boost reserve requirements for lenders and allow faster yuan appreciation, as a result, according to economists from Standard Chartered Plc and Credit Agricole CIB.
"All eyes are going to be on what new policies the central bank can bring to the table,"Jinny Yan, a Shanghai-based economist at Standard Chartered told Bloomberg News. "But there's still going to be a lot of excess liquidity in the market in the first half of the year."
2011 China Outlook: The Red Dragon Takes Its Next Step Forward
If the United States has a growth problem, China has just the opposite. The world's second-largest economy is set to grow 9-10% this year, building on its strong rebound from the global financial crisis.
Furthermore, Beijing is determined to accelerate China's transition toward a more domestically based economy, while stabilizing prices and cutting government waste.
So in addition to strong growth numbers, investors can expect more disciplined and responsible economic development.
Progress Made on U.S.-China Trade, but Currency Roadblock Remains
The United States and China this week wrapped up a two-day meeting on trade that was aimed at cooling rising tensions between the two nations. Still, despite the progress, currency valuations and trade tariffs will continue to be a fixture of both countries' foreign policies.
The U.S. trade deficit with China this year could top $270 billion, surpassing the 2008 record of $268 billion. U.S. policymakers blame China's undervalued currency and government subsidies for the imbalance. China's disregard for intellectual property rights and bias towards its own domestic companies are also major points of contention.
In a rare show of conciliation, China during Wednesday's trade talks agreed to loosen some of its trade restrictions and better enforce intellectual-property rights on the Mainland -especially to curtail rampant software piracy that costs software makers an estimated $7.9 billion a year in lost revenue.
Chinese IPOs Making Waves in the Market, but Beware of Bubbles
Record fundraising activity in the market for initial public offerings (IPOs) is pushing valuations for Chinese companies to sky-high levels, raising concerns about a possible bubble.
IPOs are likely to raise more than $300 billion for issuers worldwide in 2010, exceeding the previous record of $295 billion in 2007, despite the sluggish economic recovery in Western markets.
In the first 11 months of 2010, IPOs worldwide already raised $255.3 billion in 1,199 deals, according to a "Year-end Global IPO Update" report from Ernst & Young.
And the red-hot Asian markets, led by China, continued to lead the recovery, raising the most capital ever. Asian issuers have raised $164.5 billion so far this year - already surpassing the $98.2 billion raised in the peak fundraising year of 2006 and accounting for 64% of total global IPO value so far in 2010.
That's more than four times the $40 billion in IPOs completed by the second-ranked North American market. Europe was third, raising $32.8 billion, far outdistancing the Middle East and Africa's $5 billion.