Transcript China’s Relations with Latin America: A New Type of South-South Cooperation in the Age of Globalization Madariaga, March 6, 2013 Jiang Shixue Chinese Academy of.

China’s Relations with Latin America:
A New Type of South-South
Cooperation in the Age of Globalization
Madariaga, March 6, 2013
Jiang Shixue
Chinese Academy of Social Sciences
[email protected]
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Remarkable progress
• Strategic partnership with several Latin
American countries
• Rising two-way trade and investment
• Exchanges and cooperation in every other
areas
• Membership in the Inter-Development Bank
• More and more people-to-people contact
• And so on.
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Problem 1
• “Fear of China”: Angel or devil?
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China’s contributions
1. China’s demand
for raw materials
and commodities
have pushed up
their prices on the
world market,
which is beneficial
to Latin America.
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2. China’s relatively cheap exports
and rising prices of raw materials
and commodities on the world market
has improved the region’s terms of
trade.
• Is the “center-periphery” theory of
Raúl Prebisch (1901~1986) still valid?
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3. Better to control inflation.
• Financial Times (April 22, 2011): Everything
in a small shop in São Paulo’s Paraisópolis
favela, or slum, was made in China. “It’s just
so much cheaper,” the shop owner said,
pointing out items that would cost over five
times as much if they had been manufactured
in Brazil. “It has to be; otherwise lots of
people here couldn’t afford it.”
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4. Chinese investment in the region can
make up for the short-fall of its capital
accumulation.
• According to Chinese statistics, total
stock of China’s FDI in Latin America
had increased from US$4.6 billion in
2003 to more than US$30 billion in 2009
and US$55 billion in 2011.
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5. A big market for Latin America.
• According to the Inter-American
Development Bank, by the mid-2012,
half of the region’s 33 countries had
made direct investment in China,
with the amount totaling US$858
million.
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• In 2005, China ranked the 24th in Chile’s
overseas wine market; by 2012, it had climbed
to the 6th position.
• In 2000, China bought just 780 cases from
Concha y Toro, Latin America’s largest wine
producer. In 2011 the number rose to 164,274
cases, with a value of US$4.6 million, an
increase of 86 per cent compared with 2010.
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6. Better for Latin America to diversify
its external economic relations.
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Problem 2
• Trade frictions are increasing.
• China’s exports of labor-intensive
products have revealed the weakness
of Latin America’s competitiveness.
• Latin America has initiated more antidumping investigations than any
others in the world.
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• Proper use of anti-dumping is legitimate
under the WTO rules, but its abuse is
seen as a form of protectionism and
discrimination.
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How to deal with the trade imbalance?
• Indeed, China enjoys trade surplus with
some Latin American countries? The
question is how to achieve a balance?
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Problem 3
• The US factor.
• Dan Burton: “I believe we should be cautious
and view the rise of Chinese power as
something to be counterbalanced or
contained, and perhaps go so far as to
consider China's actions in Latin America as
the movement of a hegemonic power into our
hemisphere.”
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Mary Anastasia O’Grady
• “The rise of China in the region could
complicate U.S. efforts to control illegal
immigration, weapons shipments, the drug
trade and money laundering because China is
cooperating with Latin countries that are not
especially friendly toward those efforts. Some
of these nations may try to use the Chinese
alternative to challenge U.S. hegemony.”
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But it’s good to see that some people
in the US think differently
• For instance, Arturo Valenzuela,
former U.S. Assistant Secretary of
State for Western Hemisphere
Affairs, was reported to say the
following words when he was in
Beijing in August 2010:
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• “In fact, we see China providing
Latin America with many more
opportunities to grow their
economies, to provide better jobs, to
increase the standard of living.”
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• There is no need
for the US to
concern about
China’s presence
in Latin America
because this type
of South-South
relations is not
targeting against
any third party.
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China’s relations with Brazil
• Strategic partnership in 1993, ten years
earlier than the China-EU’s strategic
partnership.
• China expressed its support for Brazil’s
endeavor to become a permanent member
of the UN Security Council as early as in
2004 when Lula visited China.
• Exchanges and cooperation in every field.
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The biggest problem
• Brazil granted the market economy status to
China in 2004, but in reality, it has not yet
fully implemented this measure
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Towards the future
• China and Brazil can play a more important
role on the world stage by strengthening
cooperation and coordination on a wide range
of global issues.
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• The following comment is NOT correct:
• “Apart from trade, China and Brazil tend to
have a more competitive relationship in the
long-term, which may become more intense as
both countries increase their presence in other
regions. ”
• Carlos Pereira Joao Augusto de Castro Neves,
“Brazil and China: South-South Partnership or
North-South Competition?” POLICY PAPER,
Brookings, Number 26, March 2011.
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Is a triangulation of China, Europe
and Latin America possible?
1. Include the
triangulation or
triple partnership
into the annual
China-EU
summit.
2. Set up a
China-EU fund
to facilitate
Chinese and
European
investment in
Latin America.
3. Make more joint
ventures like the
Sinopec-Repsol
deal in Brazil. (It’s
Latin America's
largest private
energy groups,
valued at $17.8
billion.)
4. Invite China to become an Associate
Observer at the Ibero-American Summit.
5. Invite European businessmen to attend
the China-Latin American Business
Summit.
6. Strengthen
cooperation in
the InterDevelopment
Bank.
7. Make good use of Macau’s
position as a platform for ChinaPortuguese speaking nations.
8. Build more
“bridges” like the
Uría Menéndez so
that Chinese and
European traders
and investors can
go to Latin
America more
easily.
9. Deepen the
trilateral
cooperation,
coordination and
consultation on
all the
multilateral
platforms of the
world.
10. Strengthen
trilateral
understanding
of each other in
every aspect.
Thank you.
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