This document provides an overview of relations between the US, China, and Latin America. It notes that China has become Latin America's largest trading partner, surpassing the US in some countries. While US investment in the region is more diversified, Chinese investment and loans are concentrated in mining and raw materials. The document then examines relations specifically between China, the US, and Peru in detail. It finds that China is now Peru's largest trading partner and a major source of investment, mainly in mining. Overall the analysis suggests China's influence in Latin America is growing as it seeks natural resources, while some view its trade practices as unfair competition.
Understanding the US-China Trade Relationship Peachy Essay
The US-China Business Council (USCBC) is pleased to have commissioned this study by Oxford Economics on the overall impact of China on the US economy.
During last year’s election campaign, the negative impact of trade with China, such as estimates of jobs lost, received considerable attention. In most cases, the presented data fails to provide a balanced assessment that incorporates the positive effect of the commercial relationship with China. Presenting only the negative impact and ignoring the jobs created, lower inflation, and other benefits of trade with China can lead to policies based on incomplete or misleading information.
Colombia, key destination for new businessesprospectappt
Market research article that analyzes the opportunities for Foreign Direct Investment in Colombia. This article was written by Prospecta, a consultancy firm specialized in strategy, corporate governance and market entry based in Bogotá, Colombia
Dr. Alejandro Diaz Bautista Presentation U.S. Congress Washington D.C. March ...Economist
“Immigration Reform, Labor Mobility and Regional Economic Growth in North America 2010”
Alejandro Díaz-Bautista, Ph.D.
Professor of Economics and Researcher at DEE, El Colegio de la Frontera Norte (COLEF)
adiazbau@hotmail.com
Prepared for the 14th Annual U.S. - Mexico Congressional Border Issues Conference Immigration Reform and Security Cooperation, March 17-18, 2010, Rayburn House Office Building, Capitol Hill, Washington, D.C.
China estableció relaciones diplomáticas con un ex aliado de Taiwán, Gambia, el 17 de marzo, poniendo fin a una tregua diplomática no oficial entre China y Taiwán como consecuencia de la elección en enero de la líder de un partido independentista como Presidente de Taiwán.
Gambia, un pequeño país en África, rompió relaciones con Taiwán en noviembre de 2013, causando la ira en Taipéi, pero China en ese momento no hizo nada entonces para ganarlo a su lado.
Understanding the US-China Trade Relationship Peachy Essay
The US-China Business Council (USCBC) is pleased to have commissioned this study by Oxford Economics on the overall impact of China on the US economy.
During last year’s election campaign, the negative impact of trade with China, such as estimates of jobs lost, received considerable attention. In most cases, the presented data fails to provide a balanced assessment that incorporates the positive effect of the commercial relationship with China. Presenting only the negative impact and ignoring the jobs created, lower inflation, and other benefits of trade with China can lead to policies based on incomplete or misleading information.
Colombia, key destination for new businessesprospectappt
Market research article that analyzes the opportunities for Foreign Direct Investment in Colombia. This article was written by Prospecta, a consultancy firm specialized in strategy, corporate governance and market entry based in Bogotá, Colombia
Dr. Alejandro Diaz Bautista Presentation U.S. Congress Washington D.C. March ...Economist
“Immigration Reform, Labor Mobility and Regional Economic Growth in North America 2010”
Alejandro Díaz-Bautista, Ph.D.
Professor of Economics and Researcher at DEE, El Colegio de la Frontera Norte (COLEF)
adiazbau@hotmail.com
Prepared for the 14th Annual U.S. - Mexico Congressional Border Issues Conference Immigration Reform and Security Cooperation, March 17-18, 2010, Rayburn House Office Building, Capitol Hill, Washington, D.C.
China estableció relaciones diplomáticas con un ex aliado de Taiwán, Gambia, el 17 de marzo, poniendo fin a una tregua diplomática no oficial entre China y Taiwán como consecuencia de la elección en enero de la líder de un partido independentista como Presidente de Taiwán.
Gambia, un pequeño país en África, rompió relaciones con Taiwán en noviembre de 2013, causando la ira en Taipéi, pero China en ese momento no hizo nada entonces para ganarlo a su lado.
TPP negotiations are expected to finish this year but this seems to be difficult now. It would be one of the most ambitious liberalizations agreements as it wouldn’t leave any sector of the economy out of this process. Furthermore, it is considered that TPP would be a step to complete the process of liberalization between the 21 APEC economies.
Conference on "Macau's Bridging Role between China and Peru" in the 19th Macao International Trade and Investment Fair Latin American Business Forum October 24, 2014 Macau
El Presidente Pedro Pablo Kuczynski viajara a China en la mitad de setiembre en lo que será su primer viaje oficial al extranjero, en reconocimiento a la importancia de ese país como nuestro mayor socio comercial, el mayor inversor en el sector minero y de hidrocarburos, en el marco de la celebración del 45 aniversario del establecimiento de relaciones diplomáticas con la República Popular China.
La agenda de la relación con China es muy amplia. Como segunda mayor economía del mundo, con un inmerso mercado interno, con grandes empresas que buscan salir al extranjero e invertir el capital que tienen, hay muchas posibilidades de incrementar las relaciones. A continuación se mencionan algunos temas que deberían estar en la agenda del Presidente en su visita a China:
Se ha anunciado que el estudio de factibilidad para el establecimiento de un Tratado de Libre Comercio (TLC) con la India ha concluido con un visto bueno de ambas partes y que es probable que a fines de año se inicien las negociaciones para tener un TLC con ese país.
India es el segundo país más poblado del mundo, con casi 1,300 millones de habitantes, y se prevé que para la primera mitad de la próxima década podría pasar a China como el país más poblado del mundo. Desde el año pasado India crece más que China, creció 7.6% comparado con 6.9% en el año 2015, y todo indica que en los próximos años crecerá más que China.
INDEX
I. Similarities between Andean, Mesoamerican (Pre-Columbian civilizations) and Chinese civilizations. First contacts
II. History of old relations between China and Latin America, The Galleon trade: Manila-Acapulco
III. Chinese immigration to the region from the 1840s and diplomatic relations from 1874 onwards
IV. China and Latin America economic relations: Trade, Investment and Cooperation I
V. China and Latin America economic relations: Trade, Investment and Cooperation II
VI. China and Latin America economic relations: Trade, Investment and Cooperation III
VII. The present day Chinese community in the region and influence of Chinese culture
VIII. Towards a new type of China Latin America relationship
Mas del 97% de las empresas en las economias del APEC son Pequeñas y Medianas Empresas (PYME)
La contribución económica de las PYME en las economias del APEC varia. En Taiwan (Taipei chino) contribuyen con el 30% del total de ventas anuales, en Australia con el 39% del valor añadido en la Industria, en Japon con el 51% del Producto Bruto Interno, PBI, en China e Indonesia con el 59% del PBI.
Contribuyen con el 66% del empleo en Japon, 78% en Taiwan, y 92% en Indonesia. En Peru con el 62%.
Temario:
I. Introducción
II. Importancia del Asia Oriental
III. Visión estratégica de China, Japón y Corea
IV. Visión estratégica del Perú frente al Asia Pacifico
V. Conclusiones
Introduction
-China and Latin America have a long time relationship
-That includes inmigration, diplomatic links, and increasingly trade and investment
-The nature of the present trade and investment relationship call for a cooperative approach and a common agenda is called for it.
-The two will become increasingly linked.
From the textbook (Colander, David C. Macroeconomics, 7th Edition.docxMARRY7
From the textbook (Colander, David C. Macroeconomics, 7th Edition. McGraw-Hill Learning
Solution
s) read the following chapters:
16: International Trade Policy, Comparative Advantage, and Outsourcing
17: International Financial Policy
16: International Trade Policy, Comparative Advantage, and Outsourcing
One of the purest fallacies is that trade follows the fl ag. Trade follows the lowest price current. If a dealer in any colony wished to buy Union Jacks, he would order them from Britain's worst foe if he could save a sixpence.
—Andrew Carnegie
Patterns of Trade
Before I consider these issues, let's look at some numbers to get a sense of the nature and dimensions of international trade.
Increasing but Fluctuating World Trade
In 1928, total world trade was about $500 billion (in today's dollars). U.S. gross domestic product (GDP) was about $830 billion, so world trade as a percentage of U.S. GDP was almost 60 percent. In 1935, that ratio had fallen to less than 30 percent. In 1950 it was 20 percent. Then it started rising. Today it is about 250 percent, with world trade amounting to about $32 trillion. As you can see, international trade has been growing, but with significant fluctuations in that growth. Sometimes international trade has grown rapidly; at other times it has grown slowly or has even fallen.
In part, fluctuations in world trade result from fluctuations in world output. When output rises, international trade rises; when output falls, international trade falls. Fluctuations in world trade are also in part explained by trade restrictions that countries have imposed from time to time. For example, decreases in world income during the Depression of the 1930s caused a large decrease in trade, but that decrease was exacerbated by a worldwide increase in trade restrictions.
Differences in the Importance of Trade
The importance of international trade to countries' economies differs widely, as we can see in the table below, which presents the importance of the shares of exports—the value of goods and services sold abroad—and imports—the value of goods and services purchased abroad—for various countries.
Among the countries listed, the Netherlands has the highest amount of exports compared to total output; the United States has the lowest.
The Netherlands' imports are also the highest as a percentage of total output. Japan's are the lowest. The relationship between a country's imports and its exports is no coincidence. For most countries, imports and exports roughly equal one another, though in any particular year that equality can be rough indeed. For the United States in recent years, imports have generally significantly exceeded exports. But that situation can't continue forever, as I'll discuss.
Total trade figures provide us with only part of the international trade picture. We must also look at what types of goods are traded and with whom that trade is conducted.
What and with Whom the United States Trades
The majority of U.S. ...
Peru's Foreign Investment Policy towards China: Comparison with other Latin A...María Isabel Osterloh
Politica de atraccion de inversiones del Peru frente a China: Comparacion con otros paises latinoamericanos: Comparacion con los paises de la Alianza del Pacifico
Ponencia dada en la Universidad Nacional Mayor de San Marcos dada el 29 de setiembre, 2017
Conference given at San Marcos National University on September 29, 2017
Abstract: In the last two decades, Peru has increased its economic and political relations with East Asian countries. This has been accelerated since the incorporation of Peru to the Asia Pacific Economic Cooperation forum, APEC, in 1998 and the various trade agreements that Peru has made with countries of that region.
In addition, the economic stability that Peru achieved from 1990 onwards, and the sustained growth that has achieved since 2000 has made Asians look to Peru as a country of opportunities. The raw materials that Peru possesses are also a magnet for Asian countries.
However, as more than 90% of Peruvian exports to that region are just raw materials and Peru buys from them manufactured goods, the trade relationship is asymmetric.
In order for this relationship to be more balanced and profitable we could learn from the example of East Asia countries, which went from being a region where several of them also exported mainly raw materials to export manufactured goods, by the incorporation of science and technology. Besides this, Peru must also make more efforts to get to know the region and its markets.
The East Asia is the fastest growing region in the world, it will keep growing, and the relationship with them will be growing too, and China has already become the largest trading partner of Peru.
The world is experiencing a shift in the centre of economic and political power in the last decades, from the West to the East, from the Northern part of the hemisphere to the Southern part. The role of developing and emerging economies is increasing with time. This can be seen in the growing weight of those emerging and developing economies in indicators such as Gross Domestic Product (GDP), trade, investment.
But one area where still the role of western developed countries is still big, despite its diminishing importance in the indicators mentioned above, it is in the field as the most used international currencies, in international finance and trade. In these field the United States (U.S.) dollar is the most widely used. The dollar accounts for more than half of international reserves, trade transactions, and international lending. This despite the U.S. representing less than 25% of global Gross Domestic Product (GDP) and no more than 12% of global trade.
But in the last years other currencies, little by little, are increasing their importance in the international financial markets and global trade. One of them and the one that have more possibilities to compete with the dollar, is the Chinese renminbi (or yuan).
In this article it will be seen how that process is happening, first by describing the present situation of the dollar and other currencies use in trade and international finance; second it will be analysed which conditions will be needed for the yuan to become a widely used international currency; third, it will be seen how that process in happening in Latin America, a region with increasing trade and financial links to China; and last, some Conclusions will be given.
What is needed for a sustainable development and shared future in a world besieged by many uncertainties?
First, need to continue keeping the international trade and investment system open, as this has been one of the reasons for the fast grow of the world economy seen in the last 30 years until before the COVID-19 pandemic arised and trade disputes began getting worse (mainly between United States and China).
No to protectionism and avoid dividing the world in trade blocks.
Disrupting existing global supply chains should not be in nobody interest because this will make trade and investment costly.
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China is facing several challenges amid uncertainties surrounding the world economy and politics. Among them are the world post COVID 19 pandemics, the war in Europe and the increasing in intensity by the United State of its competition and technological war against China. But China also faces several challenges from within. How will these affect the Chinese economy and how will impact Latin America and Peru?
The COVID-19 pandemic will leave the Latin American region as the worst hit in the world, in terms of the number of infected and deceased (the human cost), and in terms of its dismal economic performance (economic cost). Thus, the region will need all the help possible to be able to get out of a situation that would probably leave it plunged into another lost decade for the region (such as the 1980s or the one that has just ended, 2010).
In this context, China is emerging as the only country that could help the region in terms of offering a market for its products, in terms of financing, and even in terms of helping to combat the pandemic.
In this article, in first place, we will see the social and economic situation in which Latin America is facing post-pandemic; second, the region's trade situation with China; third, the situation regarding investment and financing with China; fourth, the aid to combat the pandemic; and fifth, the prospects for the region's future relationship with China.
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china, us and latin america
1. US and China relations with
Latin America
”2012 International Conference on American Foreign Policy and the New
Global Milieu”, Tamkang University, Graduate Institute of the Americas, April
27th, 2012
Carlos Aquino Rodríguez
Professor at San Marcos National University, Peru
Master and Doctor course at Kobe University, Japan
Visiting researcher, Graduate Institute of China Studies, Tamkang University, Taiwan,
February-August 2012
12
E-mail : carloskobe2005@yahoo.com
Web site, Blog, Facebook
2. Index
I. Review of US and China relations with Latin America
II. Case study: Peru
III. What should U.S. do?
IV. Conclusions
3. I. Review of China and U.S. relations with
Latin America
Not so long time ago Latin America was considered the
“backyard” of U.S. but this is changing.
US has been the biggest investor in the region, the biggest
trading partner, the biggest donor of economic
cooperation, and exerted strong political influence in the
region.
There was a time it was said: “When the U.S. economy
sneezes, Latin American countries catch a cold”
China emergence as an economic power and its appetite
for natural resources, and food, of which Latin American
countries have in abundance, is challenging U.S. position.
China is now the biggest trade partner of Argentina, Brazil,
Chile and Peru. China has FTA with Chile, Costa Rica and
Peru
4. Merchandise trade
In 2010 U.S. exported to South and Central America 137
billion dollars, it was 58 billion in 2000 (and to Mexico 163
billions and it was 112 billion in 2000) and imported 136
billion dollars, it was 77 billion in 2000 (and from Mexico
232 billion dollars and it was 137 billion in 2000) (Table I:13 and
A11 http://www.wto.org/english/res_e/statis_e/its2011_e/its2011_e.pdf)
The same 2010 year China exported to South and Central
America 69 billion dollars (5 billion in 2000) and imported
84 billion dollars (4 billion in 2000) (Table A14
http://www.wto.org/english/res_e/statis_e/its2011_e/its2011_e.pdf)
As we see trade between U.S. and South and Central
America grew just twice last decade (to 273 billion dollars),
but with China it leaped nearly seventeen times (to 153
billion dollars).
5. Trade in manufactures
China is the third biggest trade partner of Latin America,
after EU and the US (or the second if only country partner
is considered).
In the year 2010 US exported 94 billion to and imported 37
billion dollars from South and Central America in
manufactured goods.
The same year China exported 65 billion to and imported 7
billion dollars from South and Central America in
manufactured goods. (Table II.29
http://www.wto.org/english/res_e/statis_e/its2011_e/its2011_e.pdf)
As we see nearly 27% of U.S. imports from the region
were manufactures, but the figure for China was a little
more of 8%.
6. Trade
See evolution of trade between US and Latin America, and
China and Latin America from 1990 to 2010 (from Osvaldo
Rosales: “Vision Group’s Role for the Development of FEALAC: Latin American
perspective” 1st FEALAC Vision Group Meeting, Seoul, Republic of Korea, March 13,
2012 http://www.fealac.org/2011/news/board_view.asp?txtIdx=130)
7. Asia-Pacific, and especially China, has been a key factor in
diversifying markets for the region. However, the dynamism
of AP does not lie solely in China
A. Exports B. Imports
LATIN AMERICA AND THE CARIBBEAN, INTERNATIONAL TRADE, BY MAJOR PARTNER, 1990-2010
(Share in regional total)
Source: ECLAC based on COMTRADE.
8. Trade
China exports mostly manufactured goods to the region
and buys from them mostly raw materials.
It is an asymmetric trade relationship
For example 55% of Chile exports to China is copper, 53%
of Argentina exports is soybeans, 78% of Venezuela is oil,
and 38% of Peru exports to China is copper.
http://www.china-files.com/es/link/17025/mas-que-amenaza-u-oportunidad-china-es-una-realidad-en-amer
If we consider trade in services, US trade with L.A. is
overwhelmingly bigger than trade in services of China with
L.A.
9. Investment
Regarding Chinese investment in Latin America, this has jumped from
a few million dollars a couple of years ago to about US$15 billion in
2010, with most of the money going into mining and other extractive
industries in Brazil, Peru and other nations, and jumped again last
year 2011 to about US$23 billion (Taipei Times, April 20, 2012
http://www.taipeitimes.com/News/biz/archives/2012/04/20/2003530766)
Still US and Spain are the biggest investors in Latin America as seen
in the following graphic (from Osvaldo Rosales: “Vision Group’s Role for the Development
of FEALAC: Latin American perspective” 1st FEALAC Vision Group Meeting, Seoul, Republic of
Korea, March 13, 2012 http://www.fealac.org/2011/news/board_view.asp?txtIdx=130)
China investment is mainly in mining, while US investment is more
diversified
China investment is made by state companies and so has the backing
of its government.
10. A recent surge in bi-regional trade has not been
accompanied by a similar increase in FDI flows, despite that
Chinese FDI in the region showed a hike in 2010
Announcedinvestments
1990-2009 2010 Startingin 2011
Argentina 143 5550 3530
Brazil 255 9563 9870
Colombia 1677 3 …
Costa Rica 13 5 700
Ecuador 1619 41 …
Guyana 1000 … …
Mexico 127 5 …
Peru 2262 84 8640
Venezuela (Bol.Rep.of) 240 … …
Hostcountry
Confirmed investments
LATIN AMERICA AND THE CARIBBEAN, ORIGIN OF FDI,
2006-2010 a/
(Percentages)
CHINA, FDI IN SELECTED LATIN AMERICA AND CARIBBEAN
COUNTRIES (
(Millions of dollars)
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on
the basis of official figures and estimates on April 15, 2011.
a/ This figure accounts for 80% of total FDI in Latin America and the Caribbean.
11. Economic Cooperation
China through entities like Export-Import Bank of China
(Eximbank) and the China Development Bank (CDB), is
lending money to Latin American countries, specially to
countries like Ecuador and Venezuela that can not go the
international financial markets. Both entities lent more
money to L.A. in 2010 than the World Bank, IADB and US
government together. http://www.china-files.com/es/link/17082/america-
latina-encuentra-en-china-a-su-banco-de-cabecera
China is a member of the IADB
US was and still is for many countries, the main donor of
aid, but sometimes it is said that most this is for fighting
drug traffic, something that is subject to critics as seen in
the discussions of the last Summit of the Americas (April
14th
and 15th
, 2012, Colombia).
12. Political Relations
Workers remittances from US are also important for L.A.
The theme of immigration is also a point of contention
between US and L.A.
Several Latin American countries, like Ecuador,
Venezuela, Bolivia, has warmer relations with China than
with the US.
Even some L.A. countries are having military exchanges
with China
Several L.A. heads of state have visited China, even
several times, but not US.
Rise of CELAC and UNASUR as alternatives to the OAS
to weaken US influence
So it seems US influence is waning while China one is
rising.
13. II. Case study: Peru
Why Peru?
Peru was the first country in Latin America to receive large
scale immigration from China, starting 1849
Because of that Peru has the largest community of
Chinese in Latin America
Peru was the first to establish diplomatic relations with
China, in 1874
Peru was the first to receive large scale FDI from China
FDI in 1992.
Peru main trade partner is now China, and it has a FTA
with it.
14. Graphic 1: Gross Domestic Product growth, 1992-2012
(annual growth average, 2012 data is for period March
2011-February 2012)
Source: Peru National Statistics Institute: http://www.inei.gob.pe/perucifrasHTM/inf-eco/cuadro.asp?
cod=3842&name=pr01&ext=gif
15. Trade
U.S. was traditionally the biggest trade partner of Peru,
now it is China. Last year 2011 China overtook the U.S.
Peru exported in 1993 around 3,344 million dollars, of
which 695 million dollars was to U.S. and to China 140
million dollars.
But in 2011 Peru total exports were 45,636 million dollars,
of which 5,808 million dollars went to U.S. and to China
6,961 million dollars.
Still U.S. is the major source of imports, with 7,349 million
dollars while from China was 6,321 million dollars, in the
same year 2011.
(http://www.aduanet.gob.pe/aduanas/informae/BalContiZonaPais_01122011.ht
m)
16. Trade
Peru sell mainly raw materials to China, around 95% are
minerals and fishmeal
Peru sell to U.S. also raw materials, but in the last years
the export of garments, textiles and agro industrial goods
has increased (thanks in big part to the FTA between them
in effect since 2009).
Peru has a FTA with China in effect from 2010.
But Chinese imports are, for some Peruvians companies,
unfair competition because of dumping and subsidies.
A representative case is of Chinese shoes, which even if
they have antidumping duties imposed on them from the
year 2000, have came to dominate the market for imported
shoes.
17. Number of imported Chinese shoes and share in the market of
imported shoes (in thousands –right hand-, and in %)
Source: Quarterly Dumping and Subsidies Bulletin of Indecopi, december 2011, pag 5:
http://www.indecopi.gob.pe/repositorioaps/0/5/bol/boletin_dumping_y_subsidios/Dic11CFD.pdf
18. Trade
Peru has subject several Chinese goods to antidumping
duties, 9, more than to any country, at the end of 2011.
U.S. has one antidumping duty and one countervailing
duty, to the same product, biodiesel.
The complaint is also about the asymmetric trade
relationship, because Peru sell mostly raw materials to
China but buy from it manufactured goods.
19. Number of antidumping duties, by country of origin, as of
December 31th, 2011
Source: Quarterly Dumping and Subsidies Bulletin of Indecopi, december 2011, pag 22:
http://www.indecopi.gob.pe/repositorioaps/0/5/bol/boletin_dumping_y_subsidios/Dic11CFD.pdf
20. Foreign Direct Investment (FDI)
FDI to Peru began to increase from the decade of 1990s
At the end of the year 1990 the stock of FDI was only 1.2
billion dollars and at the end of year 2011 the stock of FDI
was 22.0 billion dollars.
In the year 1990 U.S. investment was of 619 million dollars
(half of the total FDI to Peru) and in the year 2011 was of
3.01 billion dollars (the second after Spain).
China investment in Peru was nil up to 1992. That year,
Shougang Corporation ( 首钢集团 ) bought the state
company Hierro Peru that exploits iron ore. It was the first
big sale of a Peruvian state company after the government
began in 1990 a process of economic reforms and opening
of the economy to foreign investment.
23. Investment
It was one of the first biggest investments by a Chinese state company
in a foreign asset. Shougang paid around 120 million dollars for the
mine that is the only one that produces iron ore in Peru.
Now China is the tenth biggest investor with a total of 736 million
dollars (end of 2011) Table 2. There is more Chinese investment but it
does not appears as that because some is made from offshore
financial centers (OFCs).
(http://www.proinversion.gob.pe/1/0/modulos/JER/PlantillaStandardsin
Hijos.aspx?ARE=1&PFL=0&JER=1747)
US investment in Peru is mainly in mining, industry (manufacturing),
finance and energy
China investment is almost exclusively in mining. Currently there are
big investments, like in Toromocho by Chinalco (Aluminiun Corp of
China), of around 2.2 billion dollars.
24. Economic Cooperation and Political relations
There has been high levels visits between Peru and China
There was more opposition to a FTA with US than to a one
with China.
Confucius Institutes are being established to promote
China language and culture
China influence in Peru economy is getting bigger, to the
point that the Minister of Economy and Finance of Peru
said last October that he “prays every day” for China
economy to continue growing at high rates, so high price of
raw materials and demand from China will remain. (“When
the China economy sneezes, Peru and Latin American countries
catch a cold”?)
But Peru has also a good relationship with US.
25. Why China is more attractive to Latin
America countries?
Latin America has benefited from strong demand for their
raw materials from China, and for the high prices for them
Also available cheap manufactured goods from China
have elevated the standard of living of many of the region
people, especially the poor.
China is eager to buy raw materials and pays a good price
for it
China does not lecture them on human rights, democracy
and so on
China big and growing market is an attraction by itself.
China and L.A. countries are both developing ones.
26. Problems in relation to China
Asymmetric trade (complementary economies?)
High price of raw materials depend on China strong
demand for them.
Problems of unfair competition from China
China is buying land, like the one bought by Heilongjiang
Beidahuang State Farms Bussiness Trade Group in
Argentina, around 300 thousands hectares.
China and L.A. are still very far from each other, there is a
need of more direct flights.
Cultural barriers remain
China interest in the region is also political, because of 23
of Taiwan diplomatic partners, 12 are in Latin America
27. What is needed in China L.A. relationship?
While many developed countries are battling with low
growth or even recession, China and Latin America
nations experience robust growth.
They are middle-income countries with a growing middle
class, where internal demand is playing a bigger role in
fueling economic growth.
China and Latin American countries, however, need to
strengthen their trade, investment and other economic ties,
and expand their people-to-people exchanges.
28. III. What should U.S. do?
L.A. countries are more confident because they are
growing, while the US economy has problems
US should sign more FTA with Latin American countries,
open its market. Put its economy in order and growing
again.
Latin American growing markets are also an attraction to
the US
US market is still very attractive; the biggest in the world,
especially for L.A. manufactured goods. And it is also
geographically close.
Still US is seen as a country to look for, and even if its
economic influence diminishes, its cultural one will remain.
Latin America need to diversifies its trade and take
advantage of China and US markets.
29. IV. Conclusions
China influence in L.A. is growing as it increase its trade,
investment and economic cooperation with the region
But still there are issues in that relations like the
asymmetric trade, investment focused in raw materials,
and the problem with selling manufacturing goods in the
Chinese market
US will remain influential for the time being
And US attraction is not only economical but also cultural,
among other things.
But US have to be more open to L.A. needs and work
together in solving regional problems (war on drugs,
immigration, economic integration, Cuba admission to the
OAS, etc.)
30. Bibliography
Carlos Aquino: “El tratado de Libre Comercio entre Peru y EE.UU. y
las oportunidades y riesgos para el Peru”. Revista Pensamiento
Critico, No. 4, Facultad de Ciencias Economicas, UNMSM, Lima,
Peru, 2007
http://economia.unmsm.edu.pe/Organizacion/IIEc/Archivos/RevistasIIE/PC_04/PC04_CAP03.PDF
Carlos Aquino: “Ties good, but could be better” (about relations
between China and Latin America) , China Daily, February 10, 2012,
http://www.chinadaily.com.cn/usa/business/2012-02/10/content_14579217.htm
Carlos Aquino: “China and Peru relations after 40 years of diplomatic
links and two years of a FTA” April 24th
, 2012, UNMSM
http://economia.unmsm.edu.pe/noticia/2012/PeruChina_24.4.12.pdf
Council on Hemispheric Affairs: “Looking Back on the Cuba Distraction
at Cartagena and the Failure of the U.S.’ Latin America Policy”
http://www.coha.org/looking-back-on-the-cuba-distraction-at-cartagena-and-the-failure-of-the-u-s-
latin-america-policy/
ECLAC-UN: “2010 Foreign Direct Investment in Latin America and the
Caribbean” http://www.eclac.org/publicaciones/xml/0/43290/2011-323-LIEI-
WEB.pdf
31. Bibliography
Inter-American Dialogue: “Remaking the relationship, the
United States and Latin America” , April 2012
http://www.thedialogue.org/PublicationFiles/IAD2012PolicyReportFINAL.pdf
Osvaldo Rosales: Vision Group’s Role for the
Development of FEALAC: Latin American perspective” 1st
FEALAC Vision Group Meeting, Seoul, Republic of Korea,
March 13, 2012 http://www.fealac.org/2011/news/board_view.asp?txtIdx=130
Jiang Shixue: “Understanding China relations with Latin
America” http://www.sinolatincapital.cn/Upload/2009929184158.pdf
“El imperio chino superará al imperio español” http://acontecer-
ahora-es.blogspot.com/2010/08/el-imperio-chino-superara-al-imperio.html
Editor's Notes
ECLAC estimates that in 2010 Chinese multinationals invested more than 15 billion dollars in LAC. China thus became the third largest foreign investor in the region with a 9% share behind the US and the Netherlands which account for 17% and 13%, respectively. More than 90% of those investments went to natural-resource extraction, mostly in the oil and gas sector and, to a lesser extent, in mining. Sinopec made the largest investment and acquired 40% of the Brazilian operations of Repsol-YPF for 7.1 billion dollars. Oil companies CNOOC and Sinochem also announced major acquisitions in Brazil and Argentina, respectively. In mining, Chinalco and Minmetals (in Peru) and Wuhan (in Brazil) announced large investments. Huawei and ZTE are prominent investors in telecommunications and BYD; Chery and Geely, in the auto industry. By country, the main destinations for Chinese FDI are Brazil, Argentina and Peru, all of which have strong trade links with China. China is also a significant investment source for some smaller economies such as Ecuador and Guyana, however, Chinese FDI in Mexico and Central America is almost negligible (with the exception of Costa Rica). Chinese investments announced in Latin America and the Caribbean in 2011 amount to 22.7 billion dollars. Time will tell whether this is a temporary spike or the start of a new phase of economic relations between China and the region in which strong trade links are accompanied by growing investment in natural resources, manufactures, infrastructure and services.