The firming ties between China and Latin America
12 Nov 2020, 12 GMT+10
- In mid-January 2020, 800 people gathered at Mexico’s Ministry of Economy to celebrate “China Day.”
- Zhu Qingqiao, China’s ambassador to Mexico, said his country has “many plans to invest in Mexico.”
- China has developed three distinct pillars toward Latin America.
In mid-January 2020, 800 people gathered at Mexico’s Ministry of Economy to celebrate “China Day” with a seminar on Chinese-Mexican relations. Mexico’s Minister of Economy Graciela Mrquez Coln, who has a PhD in economic history from Harvard University, said, “China and Mexico have to walk together, to build a stronger and more solid relationship.” In July 2020, the United States-Mexico-Canada Agreement went into force. At the January event, Marquez Colin said that despite this agreement, Mexico must “redouble its efforts” to draw investment from other places, such as China.
Zhu Qingqiao, China’s ambassador to Mexico, said that his country agrees, and has “many plans to invest in Mexico,” including the $600 million needed by the state-owned Dos Bocas petroleum refinery in Tabasco; this money was put together by the Industrial and Commercial Bank of China, the Bank of China, and other international partners.
On June 4, 2019, just after he arrived in Mexico City, Ambassador Zhu wrote an opinion piece in a leading financial newspaper, El Financiero. “The trade war,” he wrote, “will not stop China’s development. Faced with risks and challenges, China has the confidence to face them and turn them into opportunities.” The U.S.-China economies, he noted, are highly integrated, which will make decoupling next to impossible. Meanwhile, China is prepared to increase its interaction with other countries, both through investments into those countries-such as Mexico-or by welcoming investment into China. China, he wrote, is not the author of this “trade war,” and China would like this conflict to end.
Three Pillars of China’s Approach
China has developed three distinct pillars toward Latin America: purchases of Latin American goods, Chinese investment in Latin America, and Chinese political solidarity with key Latin American governments.
Over the past two decades, China has emerged as one of the most important markets for Latin American countries. For example, in 2019, 32 percent of Chile’s exports went to China, 29 percent of Peru’s, 28 percent of Brazil’s, 27 percent of Uruguay’s, and 10 percent of Argentina’s. The mutual reliance of China and Latin America has meant that despite changes in regime, neither China nor the Latin American governments have disrupted this relationship. When Jair Bolsonaro was president-elect of Brazil, he flirted with Taiwan before coming to power; but once he was in office, the economic imperatives made any break with Beijing impossible. Far too much remains at stake. In November 2019, Bolsonaro met with Chinese President Xi Jinping, who said that China and Brazil will increase their trade “on an equal footing.” Tsung-Che Chang of the Taipei Economic and Cultural Office in Brazil conceded in September 2020 that there are “many barriers” for Bolsonaro to break with Beijing. Brazil simply does not have the latitude that Australia has, since Australia-reliant upon the Chinese market-nonetheless joined with the U.S. in a military alliance against China known as The Quad (along with India and Japan).
After the election victory in Bolivia of Luis Arce’s Movement for Socialism (MAS), Chinese President Xi sent Arce a message of congratulations. In that message, President Xi recalled the 2018 strategic partnership agreed upon by the Chinese government and the then President Evo Morales. That partnership led to the choice of China’s Xinjiang TBEA Group to hold a 49 percent stake in a planned joint venture with Bolivia’s state lithium company YLB. “Why China? There’s a guaranteed market in China for battery production,” Morales saidat the signing ceremony. Bolivia’s new president Arce was Morales’ head of economic policy; he h