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China, Latin America forge closer links for win-win end
2006-09-30

 

By Liao Lei, China Features

Six kilometers to the very north of the red-wall-surrounded "Forbidden City", Yang Jin, a 27-year-old quality inspector, climbed up a gray "Bird's Nest", which will host the opening and closing ceremonies of the Beijing 2008 Summer Olympic Games, as well as the Games' track and field events and the football finals.

"I hope Brazil will play better in the finals right here in two years, if the players can smell the scent of their home country in the giant latticework structure of steel girders," smiled Yang, a typical fan of Brazilian soccer.

Of the 42,000 tons of steel, which forged the under-construction National Stadium, dubbed the "Bird's Nest", over half were from China's leading steelmaker Baoshan Iron and Steel Co., Ltd, and -- most possibly -- refined from iron ore explored in Brazilian mines.

Thanks to the booming economy and warming political ties between China and Latin America, China's top steel, metal and oil producers and suppliers are now heading for Latin America on the other side of the Pacific Ocean.

Meanwhile, China's leading electric home appliances producers, such as Lenovo and TCL, are also setting up factories in Latin America to produce television sets, DVD players, computers and mobile phones.

Enthusiasm for investment

Previously, there have been dozens of small and middle-sized Chinese-funded factories or assembly lines for clothes, shoes, toys and electric appliances in Mexico, Peru, Brazil and other countries in the region.

Chinese companies flocked into Latin America for various reasons when the Sino-Latin American trade surged from some 2 billion U.S. dollars in the early 1990s to 50 billion U.S. dollars in 2005.

China's overseas investment reached 5.5 billion U.S. dollars in 2004 as the country encouraged more domestic companies to "go abroad". Of which, 32 percent, or 1.76 billion U.S. dollars, went to Latin American countries.

"Some of the Chinese companies went there to ensure a steady and long-term supply of raw materials, such as the Baosteel, some did it for local market potentials, and some others have an eye on the nearby markets like the United States," said Xun Guangying, a senior researcher with an international study center attached to Xinhua News Agency.

Investment and factories from China are expected to facilitate local industrial development and boost local employment in Latin America.

"We hope to expand cooperation with Lenovo, especially in the sectors of logistic and manufacture," said Alejandro Cano, director of the industrial development bureau of the Mexican State of Chihuahua, where four Chinese-funded Lenovo suppliers were based. Of the 763-million-dollar foreign investment flowing into the state last year, 15 percent was from China.

"We hope the Chinese experts will help train more local technicians and help in local industrial progress," said Mexican Ambassador to China Sergio Ley Lopez. "We can satisfy China's increasing need for material and service and every country here wants to sign free trade agreement with China."

The heating Chinese market has also lured investors from Latin America. By the end of 2005, a total of 17,956 projects in China were funded by Latin American companies, with a total investment of 56.9 billion U.S. dollars, according to the Chinese Ministry of Commerce.

From Brazilian Barbecue to bread and cakes branded "Bimbo", Yang Jin, as well as many other Beijing residents, now has more chances to taste Latin American delicacies while the Latin American food and drink industry is also trying to take a bite in the huge Chinese market backed up with a population of 1.3 billion.

Of the 21 Latin American countries which have established diplomatic ties with China, 15 have inked inter-governmental trade agreements with China. Brazil, Mexico, Chile, Argentina and Panama are the top five trade partners of China in the Latin American region so far.

However, the growing imports of some low-price Chinese products backed by low labor cost and high productivity, especially clothes and shoes, resulted in direct competition with local industries in countries like Mexico, Brazil and Peru, and thus sparked trade conflicts.

Even though, Chinese and Latin American countries had tried their best to iron out difficulties and boost cooperation to a higher level.

To regulate and promote the rocketing trade and two-way investment, China has worked closely with its trade partners in Latin America to forge a framework.

China has signed investment protection agreements with Cuba, Jamaica, Bolivia, Chile, Argentina, Uruguay, Ecuador, Peru and Barbados.

In the World Trade Organization, Brazil, India and China, three key members of the so-called "Golden BRICs" -- a label for the world's four soaring economies also including Russia, have led a group of developing countries to bargain with the advanced industrial members such as the United States, the European Union and Japan for a fair world trade order.

In November 1, 2005, Venezuela signed a contract with a Chinese company to buy a satellite for communication and broadcasting service, which will be launched in 2008. Two weeks later, China and Chile signed a free trade agreement, which is the first FTA between China and Latin American countries.

China and Brazil have also conducted broad cooperation in such fields as design and manufacture of civil aircraft, satellites, software and in bio-technology sectors in recent years, which is reputed as an "example" of South-South Cooperation.

"There is competition in some sectors between Mexico and China, but we regard China as a partner rather than a competitor. We can join hands and explore the international market," said Sergio Ley Lopez, who gave himself a Chinese name "Li Ziwen". Li is one of the most popular family names in China.

Political links

Looking back into history, Chinese silk, porcelain and cotton yarn were shipped to Mexico and Peru via Manila as early as in the middle of Ming Dynasty (1368-1644). In return, the Latin America-oriented agricultural plants, such as corn, potato, peanut, sunflower, tomato and tobacco, have now become China's typical agricultural products.

There is also argument that during a seafaring adventure some 600 years ago, a great Chinese sailor Zheng He and his fleet discovered the American continent seventy years earlier than Columbus.

But, the first diplomatic ties between China and Latin American countries were established from the 1870s to 1900s, when China's last feudal dynasty, the Qing Dynasty (1616-1911), forged diplomatic relations with Peru, Brazil, Mexico, Cuba and Panama.

Now, the increasingly substantial and fruitful cooperation has linked the two sides closer across the Pacific Ocean.

So far, China has established strategic partnership or all-round cooperative relations with Brazil, Mexico, Argentina, Venezuela and Chile. China also has a traditional friendly relationship with Cuba. Chinese President Hu Jintao's state visits to Brazil, Argentina, Chile and Cuba in 2004 further strengthened such ties.

Meanwhile, China has kept close contact with regional organizations. It became an observer of the Organization of American States and the Latin-American Parliament in 2004, and also established links with other regional organizations such as the Rio Group, Andean Community, Caribbean Community and Common Market and the South American Common Market.

"All being developing countries, China shares many common ground with Latin American countries. We have all experienced the fight against imperialism and colonialism and the struggle for independence. All of these have forged the political basis for bilateral cooperation," said Chinese senior legislator Cheng Siwei, who is also chairman of the China-Latin America Friendship Association.

However, the Taiwan issue sometimes stands in the way of cooperation between China and countries in the Latin American region.

Of the 20-odd countries in the world that have "diplomatic relations" with Taiwan, an island province of China which was separated from the mainland as a result of a civil war between the nationalists and communists, 12 were located in Latin America and the Caribbean region.

"One of China's important task is to settle the Taiwan issue through peaceful reunification. To accomplish this goal, the mainland needs to make great efforts to limit Taiwan's so-called 'international space', which is a cover for official diplomatic relations and has provided room for the secessionist activities in the island," said Jiang Shixue, a researcher of the Latin America Institute of the Chinese Academy of Social Sciences (CASS).

In a bid to further political relations with Caribbean countries and contribute to regional peace and prosperity, China kicked off regular consultations with some Caribbean countries that have diplomatic ties with China. The latest one was held in Beijing in July.

China also dispatched four groups of peace-keeping forces to Haiti since 2004 and helped secure the vote counting center of the general election there earlier this year, as well as the later presidential inauguration.

China's deepening political and economic involvement in the region has raised concern in the United States, which regards the region as its "backyard" though many local people don't think so.

"The U.S. might worry that a 'Chinese dragon' will threaten its economy and security by entering the so-called 'backyard', which is absolutely unnecessary," Jiang with the CASS said.

Latin America is adopting an open policy towards other countries and China is only one of the region's new partners. Meanwhile, the mutually-beneficial cooperation between the two sides, which both belong to the third world, will only contribute to world peace and prosperity and promote the South-South Cooperation, he noted.

Even though, to avoid misunderstanding and facilitate the China-U.S.-Latin America triangle cooperation, China has launched consultation on Latin American affairs with the United States.

"We will try our best to develop relations with every country in the region, which is very important to China in every aspect," said a senior diplomat with the Chinese Foreign Ministry who asked not to be identified.

Ways for future

Though jumbo jets help shorten travel time greatly compared with the alleged journey of Zheng He back in the Ming Dynasty, the time of flight from Beijing to Latin American cities still doubles that between China and the United States, or at least 20 hours. Maritime transportation will even take more than a month.

"Most Latin Americans do not know much about China, neither do the Chinese have a clear vision of the region on the other side of the Pacific. Most Chinese may know the names of Latin American football stars very well, but have little impression about those stars' homeland," Jiang said.

Then, how to ensure the booming ties between China and Latin America have a bright and sustainable future? Maybe a 23-year-aged Argentine university student Pablo Morales has given an answer.

"I'm interested in Chinese culture and the way of thinking of the Chinese people," said the young guy who gave himself a Chinese name Lin Yuhan. Morales started his Chinese study two years ago along with 30 classmates in a private language school in Mendoza.

"I learned Chinese to study international relations and media organization. I hope to find a job of journalism in China after graduation," said Morales, now a grade-five student in the National University of Cuyo in Mendoza, when he came to Beijing to attend a three-day international contest known as the "Chinese Language Bridge".

In a bid to help foreigners like Morales learn the Chinese language and culture better and promote long-term friendship with the rest of the world, China kicked off in 2004 a project to establish the so-called Confucius Institutes overseas. Such institutes are named after the prestigious ancient Chinese philosopher and educator Confucius. The first Confucius Institute in Latin America was founded in Mexico.

Another way proven effective is to develop tourism and increase cultural exchange, which will help peoples on both sides to know more about each other's life, history and culture.

In a six-month-long exhibition hosted in the National Museum by the Tian'anmen Square in downtown Beijing, 248 pieces of rare ancient relics from Peru were put on display, attracting many Chinese visitors.

As the guest country of a month-long art festival in Beijing, Mexico also sent a large delegation to the "Meet in Beijing" carnival this May, which involved music and dance performances, movie show, and architecture and handicrafts exhibitions.

In a bid to promote tourism, China has inked tourism agreements with Cuba, Argentina, Mexico, Brazil, Chile and Peru since 2003, which will facilitate Chinese tourists to visit the far-away continent.

"Thanks to the cultural links, many Peruvians now will say 'Chifan', the Chinese term for 'let's have a meal', instead of Spanish in local Chinese restaurants," said Peruvian Ambassador to China Luis Chang.

-end-

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