Xi’s Visit to Latin America Enhances Relations

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CHINESE President xi Jinping wrapped up a week-long tour of Trinidad and Tobago， Costa Rica， and Mexico on June 6 which promises a new era of strategic cooperation between China and Latin America.

Profound Implications for Emerging Regions

President Xi’s first state visit to latin america and the Caribbean has profound implications for relations between the region and China. Trinidad and Tobago is an important player in the Englishspeaking Caribbean and also one of China’s most important partners in the region. Costa Rica is the only Central American nation to have established diplomatic relations with China. Meanwhile Mexico， as an important emerging market economy， has maintained a strategic partnership with China.

Hong Lei， spokesperson for China’s Ministry of Foreign Affairs， commented that China viewed the visit as an opportunity to enhance political trust， reciprocal cooperation and friendship between China and the three Caribbean nations， as well as with other nations in Latin America and the Caribbean.

China has worked to improve ties with Latin America in order to promote mutual benefits， understanding and cooperation， rather than to gain a competitive edge in Latin America.

Mutual Benefits

Burgeoning trade relations between China and Latin America is the major driving force for improved ties between the two sides. China is now Latin America’s second largest trading partner and major investment source. It is also the largest trading partner of Brazil and Chile and second largest trading partner of Argentina， Mexico， Peru and Venezuela.

The value of trade between China and Latin America exceeded US $250 billion in 2012， with Latin America becoming China’s second largest foreign investment destination.

Improved economic ties between China and Latin America are mutually beneficial – Latin American countries are in need of Chinese investment in infrastructure construction， automobile manufacture and natural resources exploitation， while China has a huge demand for Latin America’s rich natural resources.

Challenging Times

Despite visible benefits， China will face considerable challenges as it looks to increase its investment in Latin America. To this end， it is crucial that China learns more about Latin American markets and their rules and regulations. Investment in the region’s oil and mineral resources will be hampered by such complex issues as labor laws， local community objections and concerns of the environmental protection lobby.

Economic cooperation between China and Latin America is still somewhat stymied by the fact that both sides possess a similar industrial structure which has resulted in increased trade friction between them. Some small and medium-sized enterprises in Latin America fear that they will lose their competitive advantage in industries where China also has a share. Different industrial sectors in Latin American countries are also divided regarding their governments’ China policy， with manufacturing sectors asking for trade protection and the mining and agricultural industries demanding easier access to the Chinese market.

The Future of Sino-Latin American Ties

China and Latin America are set to enhance comprehensive relations， and there is a need for both sides to deepen their strategic cooperation based on mutual political trust， enlarge their common interests， taking trade cooperation as a key factor， and to safeguard food security through cooperation in agricultural production.

Economic cooperation between China and Latin America should go beyond trade and reach into areas including investment and sci & tech innovation. China should increase its direct investment in Latin America and participate in its infrastructure upgrade process.

The two sides should also promote people-topeople exchanges and cultural communication.