The volume of trade between China and Latin America totaled $216.6 billion in 2016, and Latin America's exports to China remained generally stable. The Chinese market is working as an essential "stabilizer" for foreign trade in Latin America, and China will be an important trade partner for Latin America in the future, according to a UN official.
Osvaldo Rosales, director of the International Trade and Integration Division of the Economic Commission for Latin America and the Caribbean (ECLAC), spoke with People's Daily about China's role in Latin American development.
China-Latin America trade has entered an adjustment period
Trade between China and Latin America has seen rapid growth in the new century. The volume of trade in 2016 was 16 times higher than in 2000, accounting for 6 percent of China's total foreign trade volume, a growth of 3.3 percent. China has become the largest trade partner of many countries in Latin America. As the world's second largest economy and a key engine in the global economy, China's development has provided a number of opportunities for Latin America, said Marcelo Fernandez, Ecuador's former deputy minister for foreign affairs.
A recent report from China's Ministry of Commerce indicates that China's investment in Latin America has become diversified. Statistics show that China's non-financial direct investment in Latin America is $29.8 billion. With the continued emergence of large-scale mergers and acquisitions, investment has moved beyond the traditional fields of energy, mineral resources and infrastructure to agriculture, manufacturing, information, e-commerce, air transport and more.
Inject positive energy into China-Latin America trade
In the long run, a variety of factors have injected new impetus into China-Latin American trade.
Free trade agreements and cooperation have improved bilateral trade. Since 2006, China has signed free trade agreements with Chile, Peru and Costa Rica. At present, China is promoting free trade agreements with Colombia and Uruguay.
China-Latin America forum, bilateral economic and trade consultation and new Chinese policies have all played major roles in boosting bilateral trade. Paula Wróbel, Brazilian professor of international relations at Pontifical Catholic University of Rio de Janeiro, believes that China's proposal of constructing a Free Trade Area of the Asia-Pacific (FTAAP) is also good news for Latin America, as it would strengthen regional economic cooperation and promote "Belt and Road" construction.
A report released recently by the UN predicted that Latin America will emerge from its recession and achieve a growth of 1.3 percent in 2017, which would create a favorable environment for trade.
The essential importance of the Chinese market
China's increasing investment in Latin America directly promotes the expansion of bilateral trade and improved trade structure. It also enhances China's competitiveness in Latin America.
Affected by the Brazilian economic crisis, China-Brazil trade has declined in recent years. However, the importance of the Chinese market is still undeniable. Recent data from Brazil's Ministry of Agriculture reveals that China's total imports of Brazilian agricultural products amounted to $20.83 billion, which means that China remains Brazil's largest importer of agricultural products. Official statistics from Brazil indicate that Brazil's investment in China was $19 million in 2016, a slight increase from 2015. Over the same period, Chinese companies increased their investment in Brazil, with annual investment of more than $10 billion and a total investment of more than $30 billion.
Xia Xiaoling, economic and commercial ministerial counselor for the Chinese embassy in Brazil, told People's Daily that China has been Brazil's largest trade partner since 2009. There are currently more than 200 Chinese-funded enterprises in Brazil, doing business in the oil, mining, electricity, manufacturing, financial, agricultural, wholesale and retail industries. Mutual investment will become an important driving force for the development of bilateral economic and trade cooperation.
According to Wróbel, the Brazilian government attaches great importance to foreign investment--especially Chinese investment--when it comes to pushing forward Brazil's economic development. The Investment Partnership Program promoted by Brazilian President Michel Temer will push bilateral trade between China and Brazil to the next level.