China and Latin America have made significant progress in terms of commercial relations and are now ready to move toward a new stage of mutually beneficial economic ties.
Over the last several years, bilateral trade has shot up to almost 200 billion dollars, and the Chinese Academy of Social Sciences, one of the country’s main think tanks, has in a recent report advocated for the further strengthening of relations with the region.
According to data from the UN Economic Commission for Latin America and the Caribbean (CEPAL), China is the number one export destination for Brazil and Chile, and the second most important for Peru, Cuba, and Costa Rica. It is third in terms of imports to the region.
Given this panorama, both parties hope to continue building the partnership, with increased trade, and above all, diversification of investment projects.
This new Chinese initiative arrives at a time when countries in the region, which have historically been dependent on the export of raw materials, are making an effort to transform the structure of their economies, to achieve greater industrial capacity and add value to their exports.
China’s Ministry of Trade, for its part, several months ago announced the country’s goal of establishing more substantial exchange with Latin America and the Caribbean, projecting cooperation in industry, infrastructure, and technology, in addition to financial support and professional training.
These new objectives, according to authorities on both sides, seek to project a new strategic partnership and the restructuring of commercial ties, since in the past Chinese capital has been focused on extraction of the raw materials needed to manufacture the country’s industrial products, sold around the world.
Data from the American Enterprise Institute and Heritage Foundation indicates that 80% of Chinese investment in Latin America has been concentrated in the oil and mining sectors, with Brazil as the principal recipient, followed by Venezuela, Argentina and Peru.
In addition to guaranteeing raw materials for its manufacturing industry, China’s principal imports from Latin America have consisted of oil from Venezuela, copper from Peru and Chile, along with soy from Argentina and Brazil.
Xinhua recently published an interview with Guo Cunhai, adjunct researcher at the Chinese Academy of Social Sciences’ Latin America Institute, who noted that this new interest on the part of both parties, in diversifying and strengthening bilateral trade, reflects the new reality of Chinese-Latin American ties, following a golden age of development based on reciprocal demand and complementary economies.
The Chinese expert said that both sides are now looking at a relationship which is in “a more moderate and stable stage, after more than 10 years of rapid development.”
To assure the timely realization of this initiative, the giant Asian country established the China Development Bank and Eximbank, a Chinese import-export bank, to facilitate financing for investment projects.
China has shown its commitment to developing countries and has taken initiatives like the Asian Infrastructure Investment Bank and the new Silk Route, which are directed toward creating a new order on the Asian continent. The country is going beyond such efforts, and given its global influence is also promoting South-South cooperation in general.
During the first intergovernmental forum held between China and the Community of Latin American and Caribbean States (CELAC), the desire to cooperate was evident. China, as the world’s second most powerful economy, made a commitment to increase trade, both exports and imports, to a level of
500 billion dollars, and investment to at least 250 billion over the next 10 years.
If intentions are concretized in areas other than the extraction of raw materials, this new wave of Chinese investment set to reach Latin America could undercut U.S. influence in the region, where this nation has a long history of occupation and intervention.
Latin American and Caribbean nations are increasingly conscious of the impact this new alliance, or any other, could have, if it is based on eliminating distortions generated by centuries of colonialism, dependence, and single-product economies.