China and Latin America has increased their economic relationship in the last decade. According to China statistics, the two way trade increased from 15 billion dollars in 2001 to more than 200 billion dollars in 2011, and Chinese investment in the region grew from 4.6 billion dollars to 43.9 billion dollars.
But still there is plenty of room for improvement. Here I will mention some areas in which more should be done to increase economic relationship and deepen cooperation.
1.As China and Latin American countries are part of the emerging economies, they will continue growing in the future and their trade will increase. China needs raw materials and food, which some Latin American countries have plenty of, but also the growing Chinese middle class represent a market for manufactured goods for Latin American industries. In the other hand China will continue supplying cheap consumer goods, and not only that, as China industries become more competitive they are exporting more sophisticate products as automobiles. Also, more investment opportunities exists in both sides, as China growing investment in the last years have show, especially in the primary sectors, of mining and petroleum, and also some Latin American companies are beginning to set up operations in China to take advantage of its huge market.
2.The setting up of trade based in Yuan and surpassing the use of the dollar should be encouraged. Already a preliminary scheme for this exists between for example Argentina and China. This could help the internationalization of the Yuan and its establishment as an alternative currency to the dollar.
3.One way to increase merchandise trade and investment is to establish Free Trade Agreements (FTA). China already has some, with Peru, Costa Rica and Chile, and is negotiating with others. FTAs, by lowering or eliminating barriers to trade, have allowed a substantial increase in trade between Chile and China and between Peru and China.
4.Businessmen on both sides need to know more of each other to make dealings more smoothly and avoid misunderstandings. For this for example binational Chambers of Commerce in each country should be established and the existing ones should be more active, and the celebrations of Business summits that get together businessmen on both sides could be more frequent and include more participants.
5.China and Latin America are geographically very far away. To shorten distance, direct flights should be established. Also to promote more visits to each other countries visa requirements should be simplified or eliminated. They should also promote more each other touristic attractions.
6.As middle income countries, China and Latin American ones could share their experience for example with dealing on subjects like how to alleviate poverty, matter in which some Latin American countries like Brazil, Peru and Mexico are conducting through a system of conditional cash transfers and have been rather successful, or the Chinese experience of rapid industrialization.
7.Political contacts should be strengthened between China and Latin American countries through their active participation in some organizations where both of them participate as members, like the Forum for East Asia-Latin American Cooperation (FEALAC) in which all Latin American countries participate or the Asia Pacific Economic Cooperation forum (APEC) in which some of them do. Even a summit at the highest level, between China and Latin American countries should be considered as the one that exists between China and African countries or the ASEAN-China summit.
8.To promote greater understanding of each other side, that have different cultures and languages, the teaching of their culture and idioms should be encouraged. China is doing this by establishing Confucius Institutes in many countries that teach its language and rich ancient culture. Latin American countries should consider joining efforts to establish Centers in China that teach for example Spanish language and their culture.
9.The promotion of people to people exchange is also very important. For example, academic exchange between students and professors in each side, and the setting up of scholarship funds are steps necessary on that direction. Universities on both sides should establish cooperation agreements to promote that.
10. Latin American countries and China are in a favorably situation to continue experiencing high economic growth. As countries with a growing population as Latin American ones, or one with a huge population like China, they have both consumers and plenty of labor force. They need to reduce their reliance in markets of developed countries that are experiencing slow economic growth and in the future will grow not much more. Latin America and China growing middle class is becoming for example an engine of growth in both regions.
11. And also Latin America and China face some common challenges, like trying to reduce income inequality or to develop indigenous technologies to be less reliance in foreign one, so cooperation in these areas are also needed by exchanging experiences and developing joint projects.
12. Lastly, Latin American countries and China could cooperate more in spaces like international ones as the United Nations, or the World Trade Organization with common policies, that sometimes are opposite to the one defended by the developed countries, as in the protection and subsides that some of the rich countries give to their agricultural sector that represent unfair competition to the agricultural sector of the developing countries or their exports of these products.
