China, Latin America set for quantum leap

Chinese Premier Li Keqiang's ongoing visit to Latin America consolidates a new era of cooperation between China and the region. This comes about as China has been rethinking its engagement with Latin America in order to broaden the relationship beyond trade links. Therefore, Li's visits to Brazil, Colombia, Peru and Chile mark a turning point in regional relations as a whole. The agreements and discussions to be held will point to the development of the cooperation infrastructure between China and Latin America.

So far, trade dynamics have set the tone and patterns of the overall relationship. As a result, although trade increased at an annual rate of 27 percent from 2000 to 2013, primary products have been dominating the region's export basket to China. Similarly, the period has seen the predominance of a few products in the trade between Latin America and China. For example, and as figures from the UN Economic Commission of Latin America and the Caribbean show, while in 2000 five main products accounted for 47 percent of the value of regional exports to China, in 2013 the same five products accounted for 75 percent of the total.

Yet, and as new economic conditions shape the ongoing reform in China, new synergies can be created with Latin America to support the restructuring of the Chinese economy away from exports and toward a higher domestic investment in a more innovation-driven growth led by public consumption. In this regard, overcapacity dilemmas plus excess capital in China could find their way to Latin America to cushion the challenges at home with sustained growth abroad.