In the 21st century, China and Latin America have simultaneously launched a new phase of bilateral cooperation and overall cooperation driven by trade, investment and finance. Chinese President Xi Jinping’s third trip to Latin America has taken relations between China and Latin America to a new level.

High-level contacts between the two sides form the political basis for deepening relations. In the last four years, Xi has met with all Latin American leaders on different occasions, and almost all the leaders of Latin American countries that have established diplomatic relations with China have visited China as well. To date, nine Latin American countries are strategic partners of China, and seven of them are comprehensive strategic partners. An overall framework and orientation for China-Latin America cooperation is taking shape.

China is the biggest developing economy and Latin America is one of the regions with the most developing countries. The two sides have no historical conflicts that require urgent solutions. We are like minded in terms of national development and global governance. However, we should still keep in mind that the two sides are quite different when it comes to history, culture, religious beliefs and value systems. Therefore, more exchanges on national governance and people-to-people contacts are necessary for deepening relations.

Trade between China and Latin America is on the rise. But since the two sides are undergoing economic transformation and upgrading, difficulties are inevitable. To foster sustainable trade, the two sides should make joint efforts.

In addition to improving the traditional trade partnership with Latin America, China should cultivate small and medium-sized markets in Central America and the Caribbean region to explore new space for trade. Furthermore, China should increase imports of categories of products that Latin America has a comparative advantage in and diversify imported products to foster new growth points.

Moreover, China should promote free trade cooperation with Latin American countries and at the same time adjust free trade structures with Chile, Peru and Costa Rica, to provide a model for China-Latin America free trade cooperation.

For investment and finance cooperation, a better policy and operating environment is needed. Latin American countries differ in development level, resources and level of marketization. China should be aware of these differences and implement suitable measures. Also, there are inevitable difficulties in practical implementation. On the Latin American side, backward infrastructure, low savings rate and corruption are all obstacles for investment, and the situation cannot be changed in a short term. Chinese enterprises also need time to understand policies, laws and social environment in target countries.

Also, China can be moderately competitive with the United States in terms of political and economic cooperation with Latin America. This kind of situation is conducive to Latin America’s development of a political and economic multi-dimensional strategy.

The United States has traditionally been the priority partner in the foreign policies of many Latin American countries, while China is attractive for its international influence, vast market, investment capacity and innovation ability.

Bilateral economic and trade cooperation forms the cornerstone for closer relations. China always takes the path of partnership rather than alliance in developing relations with Latin America. It never adopts the zero-sum mentality. The boat for a community of common destiny of the two sides has set sail and will overcome all obstacles.

 

Lou Xiangfei is from the Institute for Foreign Policy Studies at Shanghai Institute for International Studies.