December 06th, 2008 | Xinhua Experts: Closer China-Latin America economic ties good to each other
China and Latin America share the same pictures in the field of economic development, and increased relations between the two sides are mutually beneficial, experts said here Friday.
The statement was made at a panel organized by the Asia Society to touch upon the China-Latin American relations, and its implications for trade and development. The event is a timely discussion given Chinese President Hu Jintao’s recent trip to Latin America looking to cement Chinese growing relations with the region.
Stories in China and Latin America are almost the same when the economic development is concerned, Donald Hanna, the managing director and global head of the emerging markets team in the economic and market analysis department of the Citigroup, said, taking the gap of income as an example.
“If you look at the per capita income by province in China, the gap in per capita income is actually just the gap you get in per capita income across the Latin American countries, between Haiti and Argentina, Mexico and Peru,” Hanna said.
“If you look at Ecuador on the one hand, and Mexico on the other, you have differences in terms of income and differences in terms of the economic basis, which is what is produced, by whom and to whom,” he added.
Since China and Latin America have a lot in common in the field of economic growth, the economies of the two sides are getting more and more linked.
“As we all know, China has free trade agreements with Peru and Chile, and now they are having negotiations with Costa Rica,” said Kati Suominen, the international trade specialist at the Inter-American Development Bank in Washington since 2003.
China and Chile signed in April this year a service trade pact supplementary to their free trade agreement (FTA), the first of its kind with a Latin American country. According to the pact, the two nations will further open their service sectors to each other’s market on the basis of their commitments to the World Trade Organization (WTO).
China and Chile signed a FTA in 2005 and put it in effect in October 2006. Their bilateral trade soared 65 percent year on year to 14.7 billion U.S. dollars in 2007, up from the 23.9 percent annual growth of 2006.
“China will certainly benefit from a more prosperous, stable and growing Latin America,” Suominen said, adding that the trade and investment are traveling in two ways between China and Latin America as their economies are “more and more linked.”
Last year, Chilean exports to China surged 79 percent to 10.3 billion U.S. dollars, boosted by copper and grape wine trade. Meanwhile, Chinese exports to Chile jumped 42 percent to 4.4 billion U.S. dollars with strong growth in computers and communications technology, electronic products and automobiles.
Peru is one of the world’s top silver producers, No. 3 producer of copper and zinc, and No. 5 gold producer while China is a massive buyer of base metals used to feed infrastructure projects.
“China is a great opportunity for Latin American countries in terms of trade and investment,” she said, adding that China and Latin America are in a win-win situation for their economic advancement.
“Generally for Latin America, the Chinese (economic) growth has meant a strong engine for the global economy,” said Christopher Sabatini, senior director for policy at American Society/Council of the Americans.