Experts in the US applauded Chinese Premier Li Keqiang’s current visit to four Latin American countries as a significant step in boosting bilateral trade and investment ties.
“Premier Li’s trip is very important,” said Eric Farnsworth, vice president of the Council of the Americas. “It signifies a continued, growing Chinese interest in Latin America, not just in terms of trading commodities but also in terms of investment in infrastructure.”
Farnsworth sees Li’s trip as a follow-up on the commitment President Xi Jinping made in January to invest $250 billion in Latin America over the next 10 years.
Latin America needs significant infrastructure, having underinvested for many years, while China has investment capital and expertise, as well as a desire to penetrate new markets, given a slowing domestic Chinese economy, he said.
“At the same time, China is adjusting its understanding of Latin American business conditions as well as expectations for investors. Attention must be paid to labor rights, environmental protection and anticorruption,” Farnsworth said.
Farnsworth believes China is creating a more significant profile across the Western Hemisphere over the long term. “The visit of Premier Li is yet another step toward this ultimate goal,” he said.
Margaret Myers, program director of China and Latin America at the Inter-American Dialogue, a US think tank, also portrayed Li’s trip as a harbinger of China’s growing economic presence in the region.
“China has been a critical economic partner for Latin America for over a decade, but is committed to achieving an even more prominent role in the region in the coming years,” she said, also citing Xi’s promise at the China-CELAC Forum in January to expand trade and investment in the region.
“The large entourage of businesspeople accompanying him will also support this effort.”
She said Li’s announcement of major investments in the four countries will demonstrate China’s commitment to a sustained presence. Myers said that China promised to diversify its direct investment in coming years after its investment strategy in the region was criticized for overemphasis on resources.
“During his visit, Li is likely to announce investment in a wider variety of industries, as well as some major, headline-grabbing infrastructure projects,” she said.
Harold Trinkunas, director of the Latin America Initiative at the Brookings Institution, said the premier’s comments show that China is listening to criticism that trade was too concentrated in certain sectors.
They also like the fact that China’s investment and trade are not conditioned by political factors, especially for countries without other options. “It resonates well, at least with Latin American countries,” he said.
Trinkunas noted that China’s investment and trade relationship with Latin America is still relatively new. China’s trade with Latin America ballooned from $12 billion in 1990 to $270 billion in 2013. Chinese investment also rose from $7 billion between 1990 and 2009 to $7 billion to $10 billion annually since 2010.
Cheng Li, director of the John L. Thornton China Center at Brookings, noted that the US is closely watching China’s move in its backyard, just like China is sensitive to the US presence in the Asia Pacific.
“So it requires a balance there,” he said.