BEIJING – As China increases direct foreign investment in Latin America, it is playing an increasingly important role as a long-term strategic partner, said Alicia Barcena, executive secretary of the U.N. Economic Commission for Latin America and the Caribbean (ECLAC).
“China is the second largest economic power in the world and one of the largest economic partners of Latin America,” Barcena told an audience of more than 150 people during a keynote address at an Oct. 15 conference in Beijing. ”We believe that in Latin America there are opportunities to convert ourselves into an export platform for China.”
Barcena discussed Latin America’s economic future during a conference titled, “Economic Development: New Opportunities for China, Latin America and the Caribbean,” organized by the Institute of the Americas and the Institute of Latin American Studies (ILAS) of the Chinese Academy of Social Sciences. [inset side=left] ”We believe that in Latin America there are opportunities to convert ourselves into an export platform for China.”[/inset]The conference was the third annual Beijing forum organized by the Institute of the Americas and ILAS on the evolving China-Latin America relationship.
The conference focused on three key areas of the China-Americas economic relationship – the energy sector, infrastructure and innovative approaches to creating and expanding companies in Latin America. Among the speakers during the day-long conference were Luis Vera, founding partner of Vera & Carvajal; James Zimmerman, partner in the Beijing office of Sheppard Mullin Richter & Hampton law firm; Wu Guoping, director of the Research Center for the Free Trade of the Americas of ILAS; Luis Gomez Cobo, partner in SinoLatin Capital in Shanghai; Silvia Sartori, project manager with the Eurpoean Union Chamber of Commerce in China; and Efren Clavo Adame, director of the Chamber of Commerce of Mexico in China.
Zheng Bingwen, director general of ILAS, said there have been “substantial advances” in China-Latin America relations since Chinese Premier Wen Jiabao traveled to Brazil, Chile, Argentina and Uruguay in June 2012. During the trip, Wen spoke at ECLAC’s headquarters in Santiago, Chile, about the future of the relationship.
“We are only in the initial phase of a relationship of enormous potential between China and Latin America,” Zheng said told the audience of business leaders, scholars and government officials from China, Latin America and the United States. “In that context, we have convoked this conference.”
“There is a better panorama for Latin America in the future. That is good news,” Barcena said.[/inset]Barcena singled out Wen’s visit as a watershed event in China-Latin America relations. “The visit of Wen Jiabao marked a very clear before and after in terms of what China wants to do in the economic relationship with Latin America,” she said.
Barcena noted that Latin American countries have faced new economic challenges as the “three motors” of the world economy have decelerated.
“The European crisis has not ended. The United States has very weak economic growth and faces the threat of a new economic recession in 2012 if the Congress does not reach an agreement to avoid the fiscal cliff. China’s economic growth has slowed between 7 percent and 8 percent,” she said. “The emerging countries – all of us in Latin America and Asia – do not have much space to move forward.”
Still, there are bright spots in the region’s economic future.
Latin America and the Caribbean economies will grow at a rate of 3.2 percent in 2012, according to ECLAC’s projections. In 2013, ECLAC predicts strong economic growth for several countries in the region: Panama, 7 percent; Peru, 5.5 percent; Paraguay, 5 percent; Brazil, 4 percent.
Debt is under control in Latin America, with the exception of Caribbean nations such as the Dominican Republic and Jamaica. And ECLAC predicts a decline in unemployment this year, with Latin American
countries showing gains in reducing poverty.
Latin America is also rich in natural resources, with 13 percent of the world supply of petroleum, 44 percent of the copper, 65 percent of the lithium, 49 percent of the silver and 23 percent of the zinc.
“There is a better panorama for Latin America in the future. That is good news,” Barcena said.
Latin America’s growth depends on adapting to changes in international markets, she said.
“Those countries that have based their economic growth on exports and imports have to rethink that strategy,” said Barcena. “Trade is not going to be the principal source of revenue in the future. International commerce is decelerating.”
Latin American and the Caribbean countries “urgently need to reindustrialize themselves,” she said.
“The technological revolution has transformed sectors and has redefined competitive bases. And the enormous cost of environmental issues has made sustainability a priority,” Barcena said. “This is a unique opportunity for Latin America in building a strategic economic partnership with China.”