MercoPress. South Atlantic News Agency

China pledges 250bn in investments and 500bn in bilateral trade with Latam

President Xi emphasized the positive signal to the world about deepening cooperation between China and Latin America

Chinese President Xi Jinping pledged on Thursday 250 billion dollars in investment in Latin America over the next five years as part of a drive to boost resource-hungry China’s influence in the region.

 The pledge — made during the first ministerial meeting of the Community of Latin American and Caribbean States, or CELAC, and China — comes amid increasing cooperation in the continent with China in the region.

“This meeting will... give the world a positive signal about deepening cooperation between China and Latin America and have an important and far-reaching impact on promoting South-South cooperation and prosperity for the world,” Xi said.

China and Latin America are cooperating on energy, infrastructure construction, agriculture, manufacturing and technological innovation, according to the Chinese president, who also said that two-way trade between China and Latin America was expected to rise to 500 billion dollars in 10 years.

Details for the documents specifying the framework for cooperation between Latin America and China in the coming years are due to be hammered out on Friday.

Also present at the Beijing meeting was the UN Economic Commission for Latin American and the Caribbean (ECLAC), which hailed arguing the “keen interest shown by the Chinese authorities in strengthening ties with Latin America and the Caribbean provides the region with a historic opportunity to address the challenges of infrastructure, innovation and human resources, spur productivity and competitiveness and diversify exports.”

ECLAC underlined China's influence in promoting economic growth in the region, and also made it clear that the CELAC was the most appropriate forum to guide a regional response to the Chinese interest in Latin America, and that as such the meeting in Beijing “is a milestone.”

The ECLAC statement is significant in that the CELAC does not include the United States nor Canada and Washington and Beijing are engaged in a process of cooperation and competition around the globe.

“Obviously, China has the intention to compete with the US for a greater sphere of influence in the region,” said Deng Yuwen, a Beijing-based political analyst. “But whether this strategy will weaken US influence now is hard to judge.”

Beijing’s approach to the region will also have to contend with the incipient rapprochement between the United States and Cuba, which was warmly received by the region’s capitals. Although the restoration of diplomatic ties between the United States and Cuba is still incomplete, it significantly alters the landscape going forward.

According to the ECLAC, “between 2000 and 2013, China went from being a minor partner of Latin America and the Caribbean to a key player. The mutual trade in goods increased 22 fold from just over 12.0 billion dollars to almost 275.0 billion dollars. By way of comparison, the region’s trade with the world only tripled during that time.”

China, the world’s second-largest economy, is buying oil from Venezuela, copper from Peru and Chile, and soybean from Argentina and Brazil. China has become the main trading partner of most of South American countries.