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China and Latin America has increased their
economic relationship in the last decade. According to China statistics, the two way trade
increased from 15 billion dollars in 2001 to more than 200 billion dollars in
2011, and Chinese investment in the region grew from 4.6 billion dollars to
43.9 billion dollars.
But still there is plenty of room for improvement. Here I will mention
some areas in which more should be done to increase economic relationship and
deepen cooperation.
1. As China and Latin American countries are part of
the emerging economies, they will continue growing in the future and their
trade will increase. China needs raw materials and food, which some Latin
American countries have plenty of, but also the growing Chinese middle class
represent a market for manufactured goods for Latin American industries. In the
other hand China will continue supplying cheap consumer goods, and not only
that, as China industries become more competitive they are exporting more
sophisticate products as automobiles. Also, more investment opportunities
exists in both sides, as China growing investment in the last years have show,
especially in the primary sectors, of mining and petroleum, and also some Latin
American companies are beginning to set up operations in China to take
advantage of its huge market.
2. The setting up of trade based in Yuan and
surpassing the use of the dollar should be encouraged. Already a preliminary
scheme for this exists between for example Argentina and China. This could help
the internationalization of the Yuan and its establishment as an alternative
currency to the dollar.
3. One way to increase merchandise trade and
investment is to establish Free Trade Agreements (FTA). China already has some,
with Peru, Costa Rica and Chile, and is negotiating with others. FTAs, by
lowering or eliminating barriers to trade, have allowed a substantial increase
in trade between Chile and China and between Peru and China.
4. Businessmen on both sides need to know more of each
other to make dealings more smoothly and avoid misunderstandings. For this for
example binational Chambers of Commerce in each country should be established and
the existing ones should be more active, and the celebrations of Business
summits that get together businessmen on both sides could be more frequent and include
more participants.
5. China and Latin America are geographically very far
away. To shorten distance, direct flights should be established. Also to promote more visits
to each other countries visa requirements should be simplified or eliminated.
They should also promote more each other touristic attractions.
6. As middle income countries, China and Latin
American ones could share their experience for example with dealing on subjects
like how to alleviate poverty, matter in which some Latin American countries
like Brazil, Peru and Mexico are conducting through a system of conditional
cash transfers and have been rather successful, or the Chinese experience of rapid
industrialization.
7. Political contacts should be strengthened between China
and Latin American countries through their active participation in some
organizations where both of them participate as members, like the Forum for East Asia-Latin American Cooperation (FEALAC) in which
all Latin American countries participate or the Asia Pacific Economic
Cooperation forum (APEC) in which some of them do. Even a summit at the highest
level, between China and Latin American countries should be considered as the
one that exists between China and African countries or the ASEAN-China summit.
8. To promote greater understanding of each other
side, that have different cultures and languages, the teaching of their culture
and idioms should be encouraged. China is doing this by establishing Confucius
Institutes in many countries that teach its language and rich ancient culture.
Latin American countries should consider joining efforts to establish Centers
in China that teach for example Spanish language and their culture.
9. The promotion of people to people exchange is also
very important. For example, academic exchange between students and professors
in each side, and the setting up of scholarship funds are steps necessary on
that direction. Universities on both sides should establish cooperation
agreements to promote that.
10.
Latin American countries and
China are in a favorably situation to continue experiencing high economic
growth. As countries with a growing population as Latin American ones, or one
with a huge population like China, they have both consumers and plenty of labor
force. They need to reduce their reliance in markets of developed countries
that are experiencing slow economic growth and in the future will grow not much
more. Latin America and China growing middle class is becoming for example an
engine of growth in both regions.
11.
And also Latin America and China
face some common challenges, like trying to reduce income inequality or to develop
indigenous technologies to be less reliance in foreign one, so cooperation in
these areas are also needed by exchanging experiences and developing joint
projects.
12.
Lastly, Latin American countries and
China could cooperate more in spaces like international ones as the United
Nations, or the World Trade Organization with common policies, that sometimes
are opposite to the one defended by the developed countries, as in the protection
and subsides that some of the rich countries give to their agricultural sector
that represent unfair competition to the agricultural sector of the developing
countries or their exports of these products.
