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Sino-Latin America cooperation promotes global governance reform

By Zheng Bingwen and He Shuangrong | 2013-07-25 | Hits:
(Chinese Social Sciences Today)

ECLAC Executive Secretary, Alicia Bárcena, welcomed  Chinese Premier, Wen Jiabao, at his arrival to ECLAC headquarters.                                            Carlos Vera/ECLAC

In the past decade, economic and trade cooperation between China and Latin America has grown by leaps and bounds. By contrast, cooperation in global governance has been relatively backward. As the effects of globalization become more entrenched, mutations in the structure of international relations occur more frequently, and China transforms its foreign policy, both China and Latin America will be presented with more opportunities, and doubtlessly face more challenges, in the arena of global governance. 
The urgency of building cooperative mechanisms for global governance
The 21st century has witnessed an average annual growth of more than 30 percent in Sino-Latin American trade, the total volume of which reached 241.5 billion US dollars in 2011. China is now Latin America’s second largest trading partner, and the largest trading partner of several Latin American nations, including Brazil and Chile. Since 2008, China’s investments in Latin America have increased rapidly. By the end of 2011, its non-financial investments in Latin America amounted to 54 billion US dollars; in 2011 alone, its investments in Latin America totaled 10.1 billion US dollars, accounting for 16.8 percent of China’s non-financial FDI that year. There is no doubt that Latin America has become China’s second largest destination for foreign investment.
However, despite the high level of economic and trade cooperation, issues concerning uneven development in Sino-Latin American ties remain unaddressed. Though, in terms of global governance, China has established cooperative mechanisms with Brazil through the framework of BRICS and BASICs, it has yet to replicate this sort of dialogue and cooperation with its other Latin American trading partners.
Common interests for China and Latin American
The global financial crisis in 2008 deeply affected the US and EU members, leading to economic downturn and a decrease in their international status. Failing to ease the crisis, developed economies could do nothing but turn to emerging economies for help. The G20, which includes several major emerging economies, such as China, Brazil, Mexico, and Argentina, gradually superseded the G8’s role as the central international body in strengthening global economic governance. Through the efforts of the G20 and BRICS, the US and Europe have been pushed to accelerate reforms in international financial institutions such as the International Monetary Fund and the World Bank. For example, in 2008 and 2010 the IMF passed reform programs that expanded the share and voting power of developing countries, including China, Brazil, and Mexico. As patterns in diplomacy and international relations are reshuffled at in increasingly quick rate, China and Latin American countries have a key opportunity to make joint efforts to reform the structure of global governance. In their shared status as developing countries, closer economic ties lead to greater common interests. With regard to reforms in global governance, China and Latin America share a common objective: to enhance the status of developing countries and to propel the democratization of international relations. Among the many complex issues of global governance, China and Latin America attach more importance to issues concerning peace and development, as opposed to the political issues stressed by developed countries. In their position of accepting rules rather than making them, China and Latin America hope to enhance and complete international law and regulations, to strengthen the role of the UN and other international organizations in multi-lateral forums and to oppose the institutional hegemony of developed countries.
Both Latin America and China displaying greater responsibility and multi-lateral forums
The year 2010 was of great significance for China, as it became the world’s second largest economy and entered the list of “upper middle income countries.” In terms of foreign policy, the increasing impact of globalization on China, as well as its contribution to globalization, prompted reflection on its role and responsibility in global governance; its strategy transformed from “passive governance” to “active participation in global governance.” At the G20 Summit in November 2008, China put forward a series of measures to enhance cooperation of international financial supervision, boost reforms of international financial organizations, encourage regional financial cooperation, and improve the international monetary system, among other agendas. At the UN climate change negotiations, China changed its passive attitude, taking due international responsibilities.
In the process of strategic transformation, China is ready to work with Latin American countries to promote reform, as the latter are playing an increasingly prominent role in global governance. Serving as speakers for the interests of developing countries, Latin American countries have promoted key developmental issues through actions such as hosting international conferences. For example, the 2010 United Nations Climate Change Conference was held in Cancún, Mexico, and in June 2012, the United Nations Conference on Sustainable Development (also known as “Rio+20”) was held in Rio de Janeiro, Brazil.
Additionally, Latin American countries focus on the role of international organizations in global and regional governance. Apart from global multi-lateral organizations, many countries in Latin America are members of third world organizations, including the Non-Aligned Movement and Group of 77. There are also many regional organizations in Latin America, such as the South American Common Market, Pacific Alliance, Union of South American Nations, etc. In the process of regional and global governance, Latin American countries not only safeguard national sovereignty and interests while constraining the institutional hegemony of great powers, but also make substantial contributions to the development and completion of international law and global governance rules. Undoubtedly, China will treat Latin American countries as important partners in reshaping the architecture of global governance.
The coexistence of opportunity and challenges
In spite of all the basis and opportunity for cooperation, there are still challenges. First, tremendous changes are taking place in the balance of power in Latin America. In 1994, Mexico joined the OECD, as did Chile in 2010. In 2011, Chile and Uruguay qualified as “high income countries,” finally overcoming the “middle income trap” in which both of their economies had stagnated for nearly half a century. As such, some countries in Latin America are graduating from developing to developed countries. As a regional group, Latin America is no longer composed of countries similar to each other; pluralism of interests and “Westernization” in politics and diplomacy are becoming more obvious. This phenomenon brings about challenges to a Sino-Latin American cooperation founded on the common identity of developing countries. Such a challenge was apparent in the differing opinions in the WTO Doha Development Round and UN climate change negotiations.
Second, countries in Latin America are showing wider gap in political and economic areas. In politics, there is a broader bipartisan separation, resulting in countries governed by left-leaning regimes to return to developmentalism, while those governed by right-leaning regimes continue to implement neo-liberal development policy. This gulf also has repercussions in foreign policy. Moreover, there are signs of fragmentation in Latin American organizations, which will influence cross-regional dialogue between China and Latin America. Although the Community of Latin American and Caribbean States can serve as a platform for Sino-Latin American dialogue and cooperation, the role it plays is certainly circumscribed by its incomplete establishment as an institution and the limited role played by large countries such as Brazil and Mexico.
The Chinese version appeared in Chinese Social Sciences Today, No. 412, February 1, 2013.
Translated by Da Yujie
Revised  by Charles Horne