China's Cooperation with Latin America
Last year China signed bilateral accords with Brazil, Argentina, Venezuela and Cuba
Nicaragua, Argentina, Venezuela, Brazil, Ecuador and Cuba are among the primary destinations for China’s investments in Latin America that have strengthened bilateral relations and led to positive economic results.
Over the past decade, China has deepened its relations with Latin America, supporting various important infrastructure and economic projects in the region. Xi Jinping, President of the People’s Republic of China, toured Latin America in July 2014, where he increased ties with Argentina, Brazil (through the BRICS summit), Cuba and Venezuela.
Primary aspects of the cooperative relations between China and Latin America:
Trade relations with Brazil
The governments of China and Brazil signed several bilateral cooperation accords related to infrastructure on July 17, 2014, in Brazil.
Accords were also reached in other areas of mutual interest, including defense, education and maritime security.
Following a private meeting, Chinese President Xi Jinping and Brazilian President Dilma Rousseff signed the accords, along with officials tasked with carrying them out.
“We hope to demonstrate the determination of developing countries to strengthen solidarity and cooperation, and also to spur confidence in the development prospects of emerging markets,” said President Xi Jinping.
Included in the agreements is the selling of 60 commercial airplanes from Brazilian firm Embraer to two Chinese businesses (Tianjin Airlines and the Commercial and Industrial Bank of China) for $3.2 billion, as well as a railway cooperation accord and an electric energy deal.
Trade between China and Brazil reach $90.2 billion in 2013, which has made China Brazil’s number one trade partner. Brazil is China’s ninth biggest trade partner.
Stability with Argentina
After his stay in Brazil, President Xi was received in Argentina on July 18, 2014, by President Cristina Fernández in the White Hall of Casa Rosada (the seat of Argentina’s government) to finalize the signing of various agreements and to strengthen cooperation in infrastructure, agriculture and finance.
The accords they reached are aimed at creating stability in Argentina’s foreign reserves and they were the result of previous negotiations between the two countries. The deals have a worth of $7.5 billion and they include cooperation, investment and financing of infrastructure and trade.
Two dams, named after Governor Jorge Cepernic and President Néstor Kirchner and located in Santa Cruz, were financed for $4.7 billion, which will enable to country to increase its hydropower energy generation.
Furthermore, China National Offshore Oil Corporation (CNOOC) made a multimillion dollar investment in the country, becoming the second biggest oil company in Argentina.
While vulture funds sought to weaken Argentina’s economy, the country found a trade ally in China, while for China, Argentina presents an opportunity for energy and transportation investment.
Argentina is also attractive to China in terms of soy bean production. The country already meets 7% of China’s soy demand, which makes it the third largest exporter of soy to China, behind the U.S. and Brazil.
A total of 19 agreements were signed between the two countries, with financing for hydroelectric dams being the biggest.
In 2013, trade between China and Argentina was $14.8 billion. China is currently Argentina’s second most important trade partner.
Integration with Venezuela
President Xi then went to Venezuela to deepen ties and sign bilateral accords that would benefit both peoples.
In July 2014, President Nicolás Maduro, at the closing fo the XII Mixed China-Venezuela Commission, announced that Venezuela and China signed 38 new accords, in areas including technology and innovation, oil and mining, housing and agriculture aimed at spurring Venezuela’s productive capacity.
“China has positioned itself as one of the world’s powers, a human power that works for a pluri-polar world,” President Maduro said.
President Maduro also emphasized that these agreements with China are part of the Plan for the Nation drafted by Commander Hugo Chávez, who was always in favor of deepening strategic relations.
Maduro noted that China was providing $4 billion in financing, to go along with $1 billion from Venezuela, for the China-Venezuela Joint Fund. This fund has led to successful social policies, including 245 new projects in diverse areas.
Automotive technology and cell-phone assembly will continue being an important factor in trade relations between the two countries.
Finally, it is expected that Venezuela will launch a third satellite with Chinese help, to join the Simón Bolívar and Francisco de Miranda satellites.
Strengthening Ties with Cuba
In closing his Latin American tour, the President of the People’s Republic of China, Xi Jinping, arrived in Cuba on July 23, 2014, where he met with revolutionary leader Fidel Castro. They spoke about topics of international interest and about the declaration adopted by BRICS countries in particular. Fidel and Xi Jinping shared their thoughts on international affairs, including the enormous dangers and challenges humanity faces.
Cuba and China signed accords to strengthen their economic, cultural and educational relations. In terms of economics, they agreed on protocols for quality control of tobacco and sugar, two Cuban exports to China.
During an activity in the Palace of the Revolution, the two leaders signed a cooperation agreement related to cyberspace. Furthermore, China gave Cuba a line of credit for the construction of a multipurpose terminal in the Santiago de Cuba port.
Other agreements were reached in the areas of health, biotechnology, higher education, agriculture, renewable energy, tourism, industry, digital television technology, the environment, culture, telecommunications and in providing equipment for water conduits. Trade agreements were also reached for the exportation of Cuban nickel to China, as well as for Chinese participation in Cuba’s oil sector.
Before the accords were signed, President Xi Jinping received the Order of José Martí, Cuba’s most prestigious award, in recognition for his “friendship and the solidarity he has shown [the Cuban] people”, as well as in appreciation of bilateral relations between the two countries.
Nicaragua’s Inter-Ocean Canal
China leads one of the most ambitious projects in Nicaragua's history: the building of the Inter-Ocean Canal. Currently valued at over $50 billion, the Canal will promote Nicaragua's economic growth-estimated at over 10%- by approximately 2020 and will lift more than 6 million Nicaraguans out of poverty.
Chinese company Hong Kong Nicaragua Canal Development received a 50-year concession for the building rights, which will provide more that 40 thousand new jobs and double per capita GDP. It will also connect the Pacific and Atlantic oceans.
This canal will be deeper and wider than the Panama Canal, and will be 278 kilometers long, while the Panama Canal is only 77 kilometers long.
China and Ecuador
Rafael Correa is the first Ecuadorian President to pay a state visit to China. He arrived last Monday to strengthen trading relations between the two countries.
He announced on Tuesday that Ecaudor’s Export-Import Bank (Eximbank) will finance technology and constructions projects in Ecuador, such as the Quito Metro.
He also signed accords worth $5 billion in financing. The state visit will end on January 9, after he meets with local businessman and delivers a keynote speech titled “Ecuador-China, promoting business and investments.”