Investments lift growth in Latin America

Chinese projects in region, including Caribbean, help drive development

China is ramping up cooperation with countries in Latin America and the Caribbean as it expands the reach of the Belt and Road Initiative with infrastructure projects vital for the region's development.

Observers said they are encouraged by the increased investment flows, especially from private companies, that have ensured momentum for Chinese engagement with the region.

"We have seen a change in the composition of investments and financing in the area. In recent years ... more private companies are (investing). This is very good in terms of sustainability and long-term projection," said Diego Marcos, a founding member of the Civil Association for Argentina-China Cooperation.

"Nations in Latin America have benefited from investment and trade relations with China," Marcos said. "Precious metal mines, railway lines and hydroelectric power plants are among the range of Chinese-funded projects in Latin America."

Argentina is a member of MERCOSUR, a trade bloc in which Brazil and Uruguay are also members.

Gabriel Rozman, president of the Uruguay-China Chamber of Commerce, said China wants to establish a free-trade agreement with countries in the regional bloc.

"Brazil and Argentina are two very important markets, and in Beijing they believe that by making an FTA with Uruguay, they will encourage the others to join the treaty as well," Rozman said.

China and Uruguay have been moving forward with negotiations for a trade agreement. If the talks succeed, a pact could become a reality in 2022 and will greatly benefit Uruguay's agricultural and fisheries sectors.

"Uruguay only has a population of 3.5 million people, but we are able to produce enough food for between 10 million and 15 million people, which we can provide to China," said Rozman, adding that "we would like to produce added value products" for the Chinese market.

In the third Ministerial Meeting of the Forum of China and the Community of Latin American and Caribbean States in early December, the two sides underlined the importance of cooperation between China and Latin American and Caribbean nations.

Juvenal Infante, director of the Center for Asia-Pacific Studies at Sergio Arboleda University in Bogota, Colombia, said Latin America is a key region for China.

Part of strategy

China's fundamental foreign and domestic policy aims to feed its huge population and lift more and more people out of poverty, Infante said. "Helping supplier countries such as those in Latin America and the Caribbean, and helping them to build ... much-needed technological and physical infrastructure to export, is part of China's strategy," he said.

Chinese customs data shows that during the first 10 months of 2021, the nation's exports to Latin America amounted to $183.8 billion, with imports at $185.2 billion.

In Brazil, Henrique Reis, international relations manager at China Trade Center Group, which promotes trade, technology and cultural cooperation between China and Brazil, said there are opportunities as well as challenges in regard to trade flows.

Brazil is China's largest trade partner in the region.

Dozens of Chinese companies have set up operations across Latin America and the Caribbean, backed by large investments that benefit ordinary people.

"The deepening of economic relations between China and Latin America and the Caribbean in the last decade was reflected above all in trade ... but it was also observed in the growth of Chinese investments in the region," the United Nations Economic Commission for Latin America and the Caribbean said in a report in August.

"In total, between 2005 and 2020, Chinese (mainland) and Hong Kong companies completed 150 mergers and acquisitions in the region, representing a total of $83 billion. In addition, they announced 652 investment projects for an estimated total amount of $75 billion," the report said.

The writer is a freelance journalist for China Daily.