China–Latin America relations

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China–Latin America relations are relations between the People's Republic of China and the countries of Latin America. The relations between China and Latin America have become increasingly important.

China Country in East Asia

China, officially the People's Republic of China (PRC), is a country in East Asia and the world's most populous country, with a population of around 1.404 billion. Covering approximately 9,600,000 square kilometers (3,700,000 sq mi), it is the third- or fourth-largest country by total area. Governed by the Communist Party of China, the state exercises jurisdiction over 22 provinces, five autonomous regions, four direct-controlled municipalities, and the special administrative regions of Hong Kong and Macau.

Latin America Region of the Americas where Romance languages are primarily spoken

Latin America is a group of countries and dependencies in the Western Hemisphere where Romance languages such as Spanish, Portuguese, and French are predominantly spoken; it is broader than the terms Ibero-America or Hispanic America. The term "Latin America" was first used in an 1856 conference with the title "Initiative of the America. Idea for a Federal Congress of the Republics", by the Chilean politician Francisco Bilbao. The term was used also by Napoleon III's French government in the 1860s as Amérique latine to consider French-speaking territories in the Americas, along with the larger group of countries where Spanish and Portuguese languages prevailed, including the Spanish-speaking portions of the United States Today, areas of Canada and the United States where Spanish, Portuguese and French are predominant are typically not included in definitions of Latin America.

Contents

Trade

Trade between China and Latin America increased by 1,200% or from $10 to $130 billion between 2000 and 2009. [1] The value of trade increased to $241.5 billion in 2011 according to Chinese Trade Ministry Counselor Yu Zhong. Only the United States was a larger trading partner. The top five nations in the trade were Brazil, Mexico, Chile, Venezuela and Argentina. [2]

In 2009 7% of Latin America's exports was to China. It consisted largely of raw material and commodities such as copper, iron ore, oil, and soybeans. China was the largest export market for Brazil, Chile, and Peru and the second largest for Argentina, Costa Rica, and Cuba. Four nations contributed 90% of the exports: Brazil (41%), Chile (23.1%), Argentina (15.9%), and Peru (9.3%). Increased Chinese demand has also been argued to increase the commodity prices of Latin American exports. [1] In the case of Brazil the rise of a new middle class has even been seen as due to Chinese commodity demand. [3] On the other hand, a large part of the exports of Costa Rica (which has a Free Trade Agreement with China), El Salvador, and Mexico to China were high-tech manufactured goods. [4]

5% of China's exports went to Latin America in 2009 and consisted mainly of industrial and manufactured goods. Chinese goods are popular in part due to their low costs. Chinese manufacturers are also making substantial efforts to establish themselves as brand names for the new middle class. [1] China is opening doors in South America. China is investing in power plants in Brazil, and repairing a railway in Argentina. [5]

According to a 2012 Fitch ratings report in 2010 92% of Latin American exports to China were commodities. 85% of Chinese foreign direct investment went to extractive industries as did 60% of Chinese loans. The report stated that the effects are mixed but overall Latin America has benefited from the relationship with China by higher commodity prices, increased growth, increased investment, and improved governmental financials. [6] There are of course many concerning environmental impacts related to the huge increase in extractive industries and agriculture by Chinese companies in Latin America, including pollution, deforestation, habitat destruction and rising fossil-fuel emissions. [7]

A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct control.

There have been concerns regarding the relationship due to Latin American dependency on exports of low-value added, highly price volatile commodities that employ relatively few people. Latin American manufacturers have faced increasing competition from China on both domestic and international markets. In some countries there have protests against the raising inflow of Chinese manufactured goods, local Chinese businesses, and perceived loss of manufacturing jobs to China. [1] [6] The book The Dragon in the Room: China and the Future of Latin America found that 92% manufacturing exports from Latin American were in sectors where China was increasing its market share while Latin America was decreasing its share, or where both China and Latin America where increasing their shares but Latin America at a slower rate. [8] Several experts have even argued that the long-term outlooks for Latin American manufacturing are poor and other sources for growth and trade such as services should be sought. [3]

After the Chinese economy peaked in mid 2015 many Chinese investment projects in Latin America were canceled or slowed. [9]

Political

China has been seen as an alternative to the United States and Europe by Latin American nations for support in the international community, for funding of infrastructure and humanitarian aid, and for creating economic growth. The number high-level meetings between Chinese and Latin American officials have rapidly increased. These have been accompanied by number of bilateral agreements. [1] The creation of the BRICS group also helped to increase relations between China and Brazil. In 2014, the 6th BRICS summit held in Fortaleza, Brazil, had the presence of the UNASUR leaders, which includes all South American countries.

WikiLeaks diplomatic cables describe a divided Latin American opinion regarding China. Neil Dávila, head of Mexico's federal agency for promoting foreign commerce and investments, stated "We do not want to be China's next Africa," reflecting a common concern regarding the effects of Chinese involvement in Africa. Colombia, Brazil, and Chile also expressed concerns while Venezuela and Argentina were convinced that dependency on the United States must end and saw China as the greatest opportunity for their exports. Chinese officials in response has accused US diplomats of spreading mistrust and Chinese Vice-President Xi Jinping in 2009 in Mexico stated that "China does not export revolution. China exports neither hunger nor poverty. We do not cause problems. What more can be said of us?" [10]

Many of nations that continue to have official diplomatic relations with Taiwan are in Central America and the Caribbean. Taiwan has previously offered military exchanges and training as well as economic aid in return but has more recently had difficulty competing with China's economic incentives and in 2008 officially abandoned this "checkbook diplomacy". The remaining pro-Taiwan nations have been seen as waiting for better Chinese offers. [1]

The formation of Community of Latin American and Caribbean States was warmly welcome by China in 2011. Hugo Chavez read aloud a letter from Chinese President Hu Jintao congratulating the leaders on forming the new regional bloc. [11]

In January 2019, numerous countries including the United States recognized the legitimacy of opposition leader Juan Guaido as President of Venezuela; the People's Republic of China issued an official statement condemning American intervention in the internal affairs of Venezuela, supporting Nicolás Maduro in the struggle for the Venezuelan presidency. [12]

Military

Military relationships have been mainly through military-to-military contacts. In particular Venezuela, Chile, Bolivia, and Cuba have had frequent official military visits, exchange of military officers, and navy port calls. There have been limited arms sales to Venezuela and Bolivia while other nations have bought nonlethal military equipment. In 2011 China and Bolivia signed a military-to-military cooperation agreement. [1] Chile, Ecuador and Peru were visited by a Chinese flotilla in 2009. [13]

In King George Island, Antarctica, China and Chile have military facilities next to each other in. [13]

Regional organizations

China in 2004 as permanent observer joined the Organization of American States. In 2008 China joined the Inter-American Development Bank as a donor. China has also increased its relationships with the CELAC, the Andean Community, and the Caribbean Community. [1]

See also

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Chile is ranked as a high-income economy by the World Bank, and is considered as South America's most stable and prosperous nation, leading Latin American nations in competitiveness, income per capita, globalization, economic freedom, and low perception of corruption. Although Chile has high economic inequality, as measured by the Gini index, it is close to the regional mean.

Economy of Paraguay

Paraguay has a market economy highly dependent on agriculture products. In recent years, the economy has grown as a result of increased agricultural exports, especially soybeans. Paraguay has the economic advantages of a young population and vast hydroelectric power but has few mineral resources, and political instability has undercut some of the economic advantages present. The government welcomes foreign investment.

Free Trade Area of the Americas

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Import substitution industrialization

Import substitution industrialization (ISI) is a trade and economic policy which advocates replacing foreign imports with domestic production. ISI is based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products. The term primarily refers to 20th-century development economics policies, although it has been advocated since the 18th century by economists such as Friedrich List and Alexander Hamilton.

The economy of South America comprises approximately 410 million people living in twelve nations and three territories. It encompasses 6 percent of the world's population.

Latin American Economic System organization founded in 1975 to promote economic cooperation and social development between Latin American and the Caribbean countries

The Latin American and the Caribbean Economic System, officially known as Sistema Económico Latinoamericano y del Caribe (SELA), is an organization founded in 1975 to promote economic cooperation and social development between Latin American and the Caribbean countries. In the early 1990s, its representatives consisted of members from 28 countries and took part in the General Agreement on Tariffs and Trade (GATT) negotiations, which led to a new global agreement on restrictions on trade and established the World Trade Organization (WTO).

Latin America–United States relations Multilateral and interregional relationships

Latin America–United States relations are relations between the United States of America and the countries of Latin America. Historically speaking, bilateral relations between the United States and the various countries of Latin America have been multifaceted and complex, at times defined by strong regional cooperation and at others filled with economic and political tension and rivalry. Although relations between the U.S. government and most of Latin America were limited prior to the late 1800s, for most of the past century, the United States has unofficially regarded parts of Latin America as within its sphere of influence, and for much of the Cold War (1947–1991), actively vied with the Soviet Union for influence in the Western Hemisphere.

Caribbean regional relations with China, which is defined as: the People's Republic of China or the Republic of China, are mostly based on trade, credits, and investments, which have increased significantly since the 1990s. For many Caribbean nations, the increasing ties with China have been used as a way to decrease long time over-dependence on the United States. The Overseas Chinese population, in this case Chinese Caribbeans, help make the connections with trade and political links. As of 2018, nine states in the Caribbean recognized the PRC and four recognized the ROC.

Taiwan–Venezuela relations Diplomatic relations between Taiwan and the Bolivarian Republic of Venezuela

Taiwan–Venezuela relations have almost been nonexistent since Venezuela recognized the People's Republic of China in 1974, although unofficial relations were preserved through a Taipei Economic and Cultural Office in Caracas until it was closed in 2009. In the 2000s, increasing partnership between the government of the Venezuelan president Hugo Chávez and the People's Republic of China has led to a more overt rejection of the Taiwan's legitimacy by Venezuela.

Argentina–China relations Diplomatic relations between the Argentine Republic and the Peoples Republic of China

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Chile–Mexico relations Diplomatic relations between the Republic of Chile and the United Mexican States

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Community of Latin American and Caribbean States regional bloc of Latin American and Caribbean states

The Community of Latin American and Caribbean States is a regional bloc of Latin American and Caribbean states thought out on February 23, 2010, at the Rio Group–Caribbean Community Unity Summit, and created on December 3, 2011, in Caracas, Venezuela, with the signature of The Declaration of Caracas. It consists of 33 sovereign countries in the Americas representing roughly 600 million people. Due to the focus of the organization on Latin American and Caribbean countries, other countries and territories in the Americas, Canada and the United States, as well as the overseas territories in the Americas of France, the Netherlands, Denmark (Greenland) and the United Kingdom are not included.

Chile–China relations Diplomatic relations between the Republic of Chile and the Peoples Republic of China

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The history of Latin America during World War II is important because of the significant economic, political, and military changes that occurred throughout much of the region as a result of the war. The war caused a lot of panic in Latin America over economics, because they depended on the European investment capital which was shut down. Latin America tried to stay neutral but the warring countries were endangering their neutrality. Most countries used propaganda to turn the neutral countries to their side, while Berlin wanted Latin America neutral. In order to better protect the Panama Canal, combat Axis influence, and optimize the production of goods for the war effort, the United States through Lend-Lease and similar programs greatly expanded its interests in Latin America, resulting in large-scale modernization and a major economic boost for the countries that participated.

Argentina foreign trade relations with the European Union

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India–Peru relations Diplomatic relations between the Republic of India and the Republic of Peru

India–Peru relations refers to the international relations that exist between India and Peru.

Latin American economy

Latin America as a region has multiple nation-states, with varying levels of economic complexity. The Latin American economy is an export-based economy consisting of individual countries in the geographical regions of Central America, South America, and the Caribbean. The socioeconomic patterns of what is now called Latin America were set in the colonial era when the region was controlled by the Spanish and Portuguese empires. Up until independence in the early nineteenth century, colonial Latin American regional economies boomed. Many parts of the region had favorable factor endowments of deposits of precious metals, mainly silver, or tropical climatic conditions and locations near coasts that allowed for the development of cane sugar plantations. In the nineteenth century following independence, many economies of Latin America declined. In the late nineteenth century, much of Latin America was integrated into the world economy as an exporter of commodities. Foreign capital investment, construction of infrastructure, such as railroads, growth in the labor sector with immigration from abroad, strengthening of institutions, and expansion of education aided industrial growth and economic expansion. A number of regions have thriving economies, but "poverty and inequality have been deeply rooted in Latin American societies since the early colonial era."

The term Latin America and the Caribbean (LAC) is an English-language acronym referring to the Caribbean and Latin America region. The term LAC covers an extensive region, extending from Bahamas to Chile and Argentina. The region consists over 670.230.000 people as for 2016, and spanned for 21.951.000 km2.

References

  1. 1 2 3 4 5 6 7 8 Katherine Koleski. Backgrounder: China in Latin America. May 27, 2011. U.S.-China Economic & Security Review Commission. "Archived copy" (PDF). Archived from the original (PDF) on 2012-04-16. Retrieved 2012-05-27.CS1 maint: Archived copy as title (link)
  2. China's trade with Latin America grew in 2011, Indo Asian News Service, Wed 18 Apr, 2012, http://in.news.yahoo.com/chinas-trade-latin-america-grew-2011-050334275.html
  3. 1 2 Jordi Zamora. China's double-edged trade with Latin America. Sep 3, 2011. AFP. https://www.google.com/hostednews/afp/article/ALeqM5ggNqQ5G8UFErmAEw71Y-u51P8_Eg?docId=CNG.e829052752a5436e909ab280ad561af6.671
  4. Ryan Berger. The Fast Ramp-Up. Quarterly Americas. http://www.americasquarterly.org/charticle_winter2012.html
  5. "China moves into Latin America". The Economist. Retrieved 2018-02-21.
  6. 1 2 Fitch: China's Economic Rise Provides Mixed Benefits for Latin America, May 9, 2012, http://newamericamedia.org/2011/01/latin-america-divided-over-ties-with-china-growing-suspicions-over-chinese-presence-in-latin-america.php, Fitch Ratings, BUSINESS WIRE
  7. http://www.dialogochino.net
  8. Kevin P. Gallagher and Roberto Porzecanski. The Dragon in the Room: China and the Future of Latin American Industrialization. 2010. Stanford University Press
  9. ROMERO, SIMON (3 October 2015). "China's Ambitious Rail Projects Crash Into Harsh Realities in Latin America". www.nytimes.com. New York Times. Retrieved 3 October 2015.
  10. Louis E.V. Nevaer, "Latin America Divided Over Ties with China," Jan 26, 2011, New American Media, http://newamericamedia.org/2011/01/latin-america-divided-over-ties-with-china-growing-suspicions-over-chinese-presence-in-latin-america.php
  11. "China's Ambitious Rail Projects Crash Into Harsh Realities in Latin America". www.rt.com. Russia Today. 4 Dec 2011. Retrieved 2018-08-25.
  12. "China, Russia side with Maduro as US backs Venezuela challenger". AFP.com. Retrieved 2019-01-26.
  13. 1 2

Further reading