The potential of the relentless advance of the Strip and the Route of China, added to a bilateral free trade agreements, is opening the doors to unpublished commercial and investment perspectives in Latin America for the coming years.
The improvement of port facilities, logistics networks and digital commercial corridors involve an advance in the infrastructure connectivity of the region that implies a push for regional integration, seasoned with the reduction of transport costs and the expansion of global markets.
In addition, the bilateral free trade agreements signed by the Asian power with several Latin American countries are opening the door to the signing of new agreements to establish future economic alliances that interconnect the two banks of the Pacific, all under the EE.UU scrutiny, which sees how it gives space to China in an area that had always considered under its influence.
Very positive predictions
The expectations that experts are considered for the expansion of trade between China and Latin America are very positive. The expansion of the opening of China and the strategies of diversification of Latin American countries, within the framework of bilateral relations, will deepen economic interdependence and encourage inclusive growth and shared prosperity, in the opinion of the researcher specialized in the international trade of the University of Business and International Economics of Shanghai, Wang Qian.
A report published by the newspaper in English China Daily on Tuesday collects the opinion of Wang and other experts along the same lines. Thus, the researcher specialized in Latin American studies of the Institute of Contemporary International Relations of China, Sun Yanfeng, said that the complementary nature of the economies of the two regions further expands the potential for deeper cooperation.
In this sense, Sun added that abundant natural resources, as well as the agricultural production of Latin America, completely complement each other with the enormous manufacturing capacity and the vast Chinese consumer market, leading to solid commercial synergies.
Objective: trade without barriers
At a time when Washington’s policy is based on the tariff threat and obstacles for the free circulation of products and services, China already has in force treated for freeing with Chile, Peru, Costa Rica, Ecuador and Nicaragua.
In addition, it is currently in negotiation of improvements in the treaty signed with Peru and in conversations for new agreements with Panama and Honduras. It is also in the focus of the Asian giant the narrowing of relations with Colombia -tradional ally of the USA.-, a country that last week entered the initiative of the Strip and the Route.
Since its first commercial association in the region, with Chile in 2005, China has thoroughly used to expand its presence in the area. At this time he has signed comprehensive strategic alliances with at least seven countries. In 2023, he signed five important agreements with nations from Latin America and the Caribbean, one of them with Ecuador.
In addition, it has signed 15 agreements related to trade with Brazil, its largest commercial partner of that part of the hemisphere, and others with Argentina and Nicaragua. Now in the spotlight is to achieve a TCL with Uruguay and another with Mercosur as a block.
First commercial partner of South America
The volume of trade between Latin America and China reached a record in 2024 of 518,467 million dollars, an increase of 6 % compared to the previous year, doubling the level of a decade ago.
In addition, the Asian country has remained for several years in a row as the second commercial partner of Latin America and the Caribbean and the largest commercial partner of markets such as Brazil, Chile, Peru and Uruguay, among others.
Regarding the direct investment of power in Latin America, it stood at 2024 at 14,710 million dollars.
China seeks to ensure access to raw and agricultural matters, as well as to a market of goods and services in a region with about 670 million people, before the look of the Trump administration, which to fulfill its purpose of reindustrializing its country must increase its exports to countries that have increasingly more links with Asian power.
Raw materials in exchange for manufactures
Commerce has grown in recent years on both sides of the Pacific, but with differences in the products that are marketed, according to a report of the Latin American and Caribbean economic system (Sela). Latin America and the Caribbean exports mainly raw materials to China, with five main products: soybeans, crude oil, copper, iron and meat.
On the other side of the balance, China exports manufactured products and technology intensive. That is, the added value is provided by China, with the risk of deindustrialization of the American region.
The Sela points a debate that has emerged in recent years, that of export reprimand, since basic raw materials went from representing an average of 31 % of total exports in the 2000-2002 triennium, at 80 % in the period 2020-2022.
In addition, except for Brazil, Chile and Peru, the Latin American region has a durable commercial deficit with the Asian country. The case of Mexico is striking, with a negative balance of 827,000 million dollars in the period 2011-2022. In that period, the commercial deficit accumulated by the region as a whole was 1,280 billion dollars, two thirds of which correspond to Mexico.
Some figures that are the reverse of the commercial relations of Latin America and the Caribbean with the US, which translated into a surplus for the first block of 72,000 million dollars only in the first half of 2022, according to the data of the Economic Commission for Latin America and the Caribbean (ECLAC). With RT
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