(10 June 2011) The conditions are now ripe for the quality of the economic and trade relationship between China and Latin America and the Caribbean to be stepped up, according to an ECLAC document launched today.
The study People's Republic of China and Latin America and the Caribbean. Ushering in a new era in the economic and trade relationship was launched today by the Executive Secretary of this United Nations regional commission, Alicia Bárcena, during the visit to Chile by the Chinese Vice-President, Xi Jinping.
According to this document, the region's current economic and trade conditions are highly conducive to moving towards a new stage in trade and investment relations with China and Asia- Pacific.
According to ECLAC, China has become a strategic trading partner for Latin America and the Caribbean, and there are considerable opportunities for export and investment agreements in fields such as mining, energy, agriculture, infrastructure and science and technology. China is the main export destination for Brazil and Chile, and the second for Costa Rica, Cuba, Peru and the Bolivarian Republic of Venezuela. However, the region's overall export basket for the Chinese market remains concentrated on a small number of raw and processed materials, with varying degrees of specialization.
According to Alicia Bárcena "It is vital to encourage a strategic rapprochement of the region with China, so that the region may move beyond the limitations of national efforts that have prevailed to date".
She stated that "it is possible and necessary to make progress in: diversifying trade, creating commercial partnerships between Asia-Pacific and Latin America and the Caribbean, increasing the amount of investment between the two parties and substantially boosting cooperation in innovation, education, science and technology".
She also highlighted the need to promote high-level dialogue and more aligned positions on key issues on the global agenda, such as climate change, non-conventional renewable energies, energy efficiency, reform of the international financial system and the Doha Round.
She indicated that the time is right to jointly define regional priorities, as China did in its official White Paper containing its foreign policy towards Latin America and the Caribbean.
As part of his tour of Cuba, Uruguay and Chile, Vice-President Xi Jinping today gave a lecture on Chinese-Latin American relations at the ECLAC headquarters in Santiago. He declared that the start of the second decade of the 21st century held new opportunities to develop relations between China and Latin America and the Caribbean.
He stated that "In accordance with the three important guidelines for developing these relations, established by President Hu Jintao during his visit to Peru in 2008, we will carry on working with the region's countries to: stay committed to the main matter of common development, continue following the basic principle of equality and mutual benefits, and be entrepreneurial and innovative while implementing a broad and comprehensive cooperation, such that relations may have a fresh starting point and reach a new level, cover broader areas and rise to greater heights".
According to the ECLAC document, China is now the world's second economy, the top international manufacturing producer and the largest global exporter of goods. China's GDP (measured in purchasing power parity) is expected to overtake that of the United States in 2016, making it the highest in the world. Since 2008, China has become one of the world's main sources of direct investment, and is now the fifth largest global investor.
In Latin America, such investment flows became significant in 2010. According to ECLAC estimates, Chinese transnationals invested over 15.0 billion dollars in the region last year, making it the third largest investor country in Latin America and the Caribbean, with a share of 9% (behind the United States (17%) and the Netherlands (13%)).
China is also expected to replace the European Union as the second destination market for the region's exports (behind the United States) by the middle of the next decade.
Lastly, the document states that regional coordination to outline an initial response to the White Paper, in the form of technical round tables, would improve the chances of aspiring to a Summit of Heads of State of China and Latin America in the next few years. Such a forum could be the setting for a joint agenda of trade and investment projects.
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