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Home >> Opinion
UPDATED: 14:40, September 09, 2004
Latin America benefits from China's development
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In less than a week three organizations in Argentina held symposiums in turn on Chinese economy at the beginning of this month. Each of them attracted at least a hundred attendees, mostly entrepreneurs, scholars and officials. Actually, Argentina's attention to China is only a small part of the "China fever" in Latin America. About 500 entrepreneurs accompanied Brazilian President Lula during his visit to China in May. And while Argentine President Kirchner visited China at the end of June 300 entrepreneurs came with him. Media in both Brazil and Argentina launched large numbers of follow-up reports on the visits. Chile, though not a big country, has made remarkable achievements in pushing ahead trade and economic relations with China thank to its early efforts at becoming the "bridge between Asia and Latin America". It has now been viewed by its Latin American neighbors as an example in trade with China. Chilean entrepreneurs and officials are often invited to Argentina to teach their experience.

With China being so far away from Latin America why Latin Americans are so focused on China in recent years?

Statistics are better in explaining the reasons than anything else. Argentine economist Guadagni, World Bank Executive Director, produced a slew of figures. During the four years from 2000 to 2003 Latin America's export to China grew drastically. In the midst of the growth Brazil's export increased 503 percent, Argentina increased 363 percent and Chile increased 238 percent. Mexico is the last country to reach WTO entry negotiation agreement with China. At that time it was very concerned that China's entry into the WTO would affect its foreign trade. The fact is that in the last four years Mexico's export to China grew 953 percent!

Moreover, most of the Latin American countries have for a long time kept a trade surplus with China. In 2003 Argentina had a trade surplus of more than $1.7 billion with China. Brazil had $2.4 billion. An analysis by Goldman Sashs Investment Bank says China's contribution to the balance of payments of Brazil and Argentina accounted for 0.75 percent of both countries' GDP in 2003. Countries such as Venezuela and Chile also reaped similar benefits.

Recently apart from increasing export to China attracting Chinese investment has also become a new focus in Latin American countries. More and more examples have demonstrated that while continuing to attract foreign investment China is making gradual steps toward investing abroad. For example, China has set up rather successful manufacturing companies in Mexico. Also China has invested in the oil industry in Venezuela and in the steel and iron industry, agriculture and forestry in Brazil. Recently the Argentine government is making active efforts to invite Chinese companies to invest in Argentina' railway construction and agricultural projects.

Many statistics and research reports indicate that as the Chinese economy is developing and blending into the world, particularly since China joined the WTO the Latin American countries are getting tangible benefits during the process.

For the Latin American countries China's significance does not only lie in increasingly broader trade opportunities and investment prospect but also in many international issues. Particularly, China and developing countries in Latin America have the same or similar position in building a fairer international economic order. About a month or so ago the WTO reached a framework agreement on the Doha Round trade talks in Geneva. During the negotiations China, together with agricultural product exporting countries such as Brazil and Argentina made joint efforts and exerted an active role in bringing about the final agreement. Since the WTO Cancun meeting last year countries such as Brazil and Argentina had been paying attention to coordinating positions with China and believed that China could represent the interests of developing countries. In June Argentine President Kirchner said during an interview that Argentina and other Latin American countries should enhance relations with China and make joint effort in building a new kind of international relationship.

Many people in Latin America believe the development path China is pursuing is a path of peaceful rise that seeks for win-win result under the new pattern of political multi-polarization and economic globalization. Latin America, a distant land, is benefiting from China's economic development and peaceful rise.

By People's Daily Online

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