Latin America is a true, indispensible partner and holds great cooperative potential for China's peaceful development
China's attention will focus on Latin America this week as President Hu Jintao visits Chile and Venezuela and attends a meeting of the BRIC countries (Brazil, Russia, India, and China) in Brazil.
Latin America is important for the global economy and has great potential for future development. Along with the ascending status, the foreign policies of Latin American nations have become more independent.
In recent years, Latin American countries have diversified their foreign relations. Regional integration organizations have thrived to cope with the challenges of economic globalization. The Rio Group, an international organization aimed at promoting unity and cooperation in the region, has exerted influence in dealing with regional problems and coordinating regional stances. Regional economic organizations have played a vital role in economic integration. With the vigorous promotion of Venezuela, several Latin American countries established sub-regional organizations such the Bolivarian Alliance for the Peoples of Our America.
Along with the global trend of multi-polarization and regional integration, Latin American countries have shown a stronger will to unite, in a bid for a more significant role in the world. On Feb 23, the summit of the Rio Group formulated the Cancun Declaration, in which Latin American and Caribbean countries all agreed to set up a new community that is expected to take shape in two years. If formed successfully, it will be a regional union consisting of all the countries in the New World, except the United States and Canada, and may replace the function of several existing regional organizations. It will be a milestone in the regional integration of Latin America.
The formation of the Latin American Community, however, will not be an easy deal. A tortuous path threatened with disunity and disharmony is ahead of it. With particular national interests and different political and economic conditions, frictions among Latin American countries, especially between left-wing and right-wing countries, is inevitable. In the recent Cancun summit, Venezuelan President Hugo Chavez and Colombian President Alvaro Uribe Velez rowed with each other. Disputes also occurred among left-wing leaders because of different personal characteristics and political ideas.
Despite all the obstacles, Latin American countries have built a consensus that, together with Caribbean countries, they have to unify against the backdrop of a multi-polar world. They have spoken in one voice and acted in one direction in a few issues such as disaster relief for quake-hit Haiti and the sovereignty of Islas Malvinas (Falkland Islands). The Latin American leaders have the ability and wisdom to appropriately coordinate national interests and foster a Latin American community.
The relations between China and Latin America themselves have seen unprecedented development in both strategic and commercial cooperation in this century. Political mutual trust is deepening, and opportunities and prospects for economic cooperation are also in good shape.
Latin America, as an economic and strategic partner, is indispensable to China's peaceful development. The economies of China and Latin American countries are complementary.
A large proportion of China's imports of resources and daily necessities are from Latin America, while China's exports to the region are increasing. China's direct investment in Latin America is also growing.
In Ecuador, Colombia, Venezuela and Peru, China has been contracted to develop oilfields. China has invested more than $6 billion into seven large mines and more than $10 billion in almost 30 grand infrastructure construction projects. In addition, China has offered nearly $20 billion of loans to Latin America.
There is still huge potential for economic cooperation between China and Latin America. China's direct investment in Latin American non-financial sectors was $8 billion by the end of 2008, amounting to only 5.5 percent of total foreign direct investment in the region and 4.4 percent of China's total outbound investment. With growing investment and expanding projects, China and Latin America is set to take advantage of the potential. Recently, national leaders suggested using financial means to promote investment and trade, which is seen as a new approach in developing bilateral economic cooperation.
Still, obstacles remain on the road to economic cooperation. A number of Latin Americans continue to fear a "China threat", protectionism in Latin America is on the rise, and cultural differences and geographic distances hinder cooperation. Despite the disadvantages, President Hu's visit to Latin America, like previous ones, will facilitate a new wave of economic projects between China and the region.