China-Latin America Relations in the New Century

-Infinite Opportunities

Remarks by H. E. Yang Jiechi

Ambassador of the People's Republic of China to the United States of America

and Permanent Observer of the People's Republic of China to the Organization of American States

At

The Emergence of China: Opportunities and Challenges for Latin America and the Caribbean

Sponsored by the Inter-American Development Bank

1 October 2004

President  Iglesias,

Ladies and Gentlemen,

It is a great pleasure for me to attend the seminar on The Emergence of China: Opportunities and Challenges for Latin America and the Caribbean, sponsored by the Inter-American Development Bank. On behalf of the Chinese Embassy, I wish to congratulate you all on the convocation of this important seminar, and I wish it a complete success.

I. China-Latin America cooperation is an important part of South-South cooperation.

In today's world, various forces and interests patterns are undergoing profound and complicated changes. However, these changes have repeatedly attested to, rather than overthrowing, one truth, i.e., peace and development remain the themes of the world. The further development of such trends as multi-polarization, economic globalization, revolution in science and technology and industrial upgrading have brought about new opportunities one after another to world peace and development. While it is true that unreasonable and unfair elements still exist in the current international political and economic order, various uncertainties continue to increase, non-traditional security threats are becoming more and more pronounced, terrorism is getting more harmful, regional conflicts occur one after another, the North-South gap is widening, and mankind are still faced with many severe challenges, yet, our world needs peace, our people need cooperation, countries must develop, and societies must move ahead – this is the common and irresistible aspiration of the whole mankind.

China is now going all out to implement its grand strategy to provide a comfortable life to the Chinese people, and China's peaceful development conforms with the common interests of the whole world and the whole mankind. As a big developing country and a responsible player in international affairs, China firmly pursues an independent foreign policy of peace. The purpose of this policy is to safeguard world peace and promote common development. We believe in a new international political and economic order that conforms with the wishes of all the peoples following the historic trend toward multi-polarization and economic globalization. We stand for safeguarding the diversity of the world and call for democratization of international relations and diversification of the development mode. We advocate a new security concept featuring mutual trust, mutual benefit, equality and coordination, and settlement of disputes through dialogue and cooperation. We work vigorously to make economic globalization better serve the purpose of common prosperity so that all countries, in particular the developing ones, can benefit from this process.

China's development will not be possible without the world or without international cooperation. This includes cooperation with the developed countries, and more importantly, it also includes cooperation with the developing countries. The very status of China as the biggest developing country in the world has made it a basic footing point in China's foreign diplomatic work to steadily strengthen solidarity and cooperation with the vast number of developing countries to achieve common prosperity. China will always be a good friend and a good partner of the developing countries, and will always share the same goals with them in the course of development. This policy will never be changed. China firmly believes that strengthening solidarity and cooperation among the developing countries is both an inevitable choice for development and a necessity for a fair and reasonable international order.

It is precisely from this strategic height of steadily strengthening solidarity and cooperation with the developing countries that China views and endeavors to develop its friendly relations and cooperation with Latin American and the Caribbean countries. Latin America and the Caribbean are a key part of the developing world and an important force for peace and development. Thanks to years of unremitting efforts, they have made remarkable achievements in safeguarding national and regional stability, revitalizing their economy, improving the livelihood of their people and actively participating in international affairs. They have thus won great respect from the international community. China attaches high importance to the role of Latin America and the Caribbean, and hopes very much to have closer and all-round cooperation with the countries in this region in all fields so that we both can strengthen ourselves, enrich and advance South-South cooperation.

II. China-Latin America relations can date back to ancient time, and they are flourishing.

Even if we put aside the controversies among historians regarding the origins of American aborigines, the exchanges between China and Latin America can date back to the mid 16th century. Chinese goods of the Ming Dynasty (1368 – 1644) were shipped to Pacific ports in Mexico and Peru by way of Manila, the Philippines, forming a famous maritime trading channel known as the "maritime silk road". In the mid 19th century, Chinese labors and merchants moved to Latin America and the Caribbean in large numbers, and they made important contributions to the local economic and social development.

From 1949 when the People's Republic of China was founded through the 1960s, the exchanges between China and Latin America were mainly in the form of people-to-people contact, with relatively fewer official exchanges. In 1960 and 1970, Cuba and Chile took the lead respectively in Latin America and South America to establish diplomatic relations with China. From the 1970s through the 1980s, with China having resumed its lawful seat in the United Nations, many countries in Latin America and the Caribbean established diplomatic ties with China one after another. Since the 1990s, cooperation in various fields between the two sides has been obviously sped up. In 1997, China entered diplomatic relations with Saint Lucia. And this year, China normalized its relations with the Commonwealth of Dominica. There are 20 countries in this region that have diplomatic relations with China, with their population, land area and GDP accounting for respectively 87%, 95% and 89% of the total Latin American region.

III. Major characteristics of the current China-Latin America relations

First, exchanges at high levels and mutual contacts in other fields between the two sides are frequent and close, and political mutual trust is steadily deepening. Until September this year, 52 presidents, vice-presidents and governors-general, 29 prime ministers and deputy prime ministers and 62 foreign ministers from Latin America and the Caribbean have visited China. Since the 1980s, Chinese presidents, premiers, vice-premiers, chairmen of the Standing Committee of the National People's Congress, chairmen of the National Committee of the Chinese People's Political Consultative Conference and other leaders have visited Latin America. Leaders of the two sides are also in frequent contact with each other on international and multilateral occasions.

Second, economic cooperation and trade are expanding rapidly. Last year, bilateral trade reached US$ 26.8 billion, representing a 50.4% increase over the previous year. In the first seven months of this year, bilateral trade has amounted to US$ 21.39 billion, an increase of 54.5% over the same period of last year. It is expected that the total trade volume for the whole year can surpass US$ 30 billion. China has become the third largest trading partner of Latin America. Economic interactions between the two sides are getting stronger and stronger, and the mutual economic complementarity is becoming more and more obvious. It is worth mentioning in particular that the past two years have witnessed a rapid and significant growth in Latin American export to China, which reached US$ 14.93 billion last year. That meant an increase of 79% over the previous year and a trade surplus of US$ 3.1 billion. In the first half of this year, Latin American export to China amounted to US$ 9.76 billion, an increase of 59% over the same period of the previous year and a surplus of US$ 2.1 billion. For years, China has always been one of the biggest buyers of Uruguay's wool, and China's purchase accounted for one-third of Uruguay's total wool export. China is also the biggest customer of Peruvian fish powder. Every year, China's import of beans alone from Argentina and Brazil has been as high as over US$ 400 million. In addition, more than 500 Chinese ships sail through the Panama Canal every year, making China the third biggest customer of the Canal.

In addition to trade, China-Latin America economic and technological cooperation is also steadily growing in both quantitative and qualitative terms. At present, Chinese have set up over 300 business operations in Latin America, including wholly-owned businesses, joint ventures and trading companies. With a total investment of nearly US$ 1.6 billion, they are making steady progress in their cooperation with local partners in petroleum, mining, electro-mechanics, agriculture, textile, communications and other fields. Their investment is involving more and more hi-tech, and their cooperation is very promising. The growth of mutual investment between China and Latin America will further improve the pattern of mutually beneficial cooperation. China also provides assistance to quite a number of countries in Latin America and the Caribbean through economic and technological cooperation in such areas as infrastructure, agriculture and medical science, playing a good role in promoting the economic and social development of the relevant countries.

Although China-Latin America cooperation in science and technology started fairly late, it has been expanding quite rapidly. In particular, the earth resources satellite project jointly developed by China and Brazil has become exemplary model for South-South hi-tech cooperation.

In recent years, Latin American investment in China has also improved remarkably both in quantitative and qualitative terms. A prominent example is the joint venture that Embraer and its Chinese partner set up in August 2002 to manufacture regional aircrafts, which has made great achievement.

It can be seen from above that China's huge market and rapid economic development will bring about many opportunities to Latin America. It is entirely possible for the two sides to achieve a win-win situation and common development through cooperation.

Third, China and Latin America are having close cooperation in international affairs. Both as members of the developing world, China and Latin American countries are all faced with the task of safeguarding world peace, advancing common development and promoting the establishment of a fair and reasonable new international political and economic order. The two sides are having more and more commonalities in international organizations and on major international issues, their mutual understanding and cooperation are ever deepening, and they are doing their best to give each other effective support on important concerns of either side. A friend from Latin America once told me that as high as over 95% of the votes by China and Latin American countries in the United Nations are the same. China offers its firm support to Latin American countries in their efforts to safeguard sovereignty and territorial integrity and to seek a reasonable solution to the debt issue. When Argentina was hit by a financial crisis at the end of 2001, China called for vigorous measures in the IMF to help Argentina out of the shadow of the crisis as soon as possible. China also supports the position of the small and weak economies in Latin America and the Caribbean in multilateral trade negotiations to ask for special and differentiated treatment. Latin American countries have also given the Chinese Government and people their great understanding and support on China's entry into the WTO, Beijing's bid for the 2008 Olympic Games, Shanghai's 2010 Expo bid, human rights, Taiwan, Tibet and other issues.

Fourth, China's relations with the regional organizations in Latin America are also making steady progress. Cooperation mechanism is becoming more and more mature. Every year, the Chinese foreign minister holds dialogues with Rio Group foreign ministers on the sidelines of the UN General Assembly, and 14 rounds have been held so far. China has established a dialogue or consultation mechanism with Mercosur, the Andeans Common Market (ACM) and the countries in the Caribbean Common Market (CCM) that have diplomatic relations with China. These mechanisms are becoming more and more pragmatic, and have been a catalyst for the mutually beneficial cooperation between the two sides. In the first half of this year, China became a Permanent Observer to the Organization of American States and the Latin America Parliament. China is already a member of the Caribbean Development Bank, and we are working vigorously to join the Inter-American Development Bank. All this demonstrates that China and Latin America are having more platforms for their cooperation, their cooperative relationship is being enriched every day, and that their bilateral relations are bound to deepen further.

IV. Some views and proposals on enhancing China-Latin America economic cooperation and Trade

On the whole, China and Latin America share the same development goals and common interests in a wide range of areas, and they have put in place a good foundation for cooperation. Against the current international situation of our times, the two sides, be it governments or otherwise, view their bilateral relations from the strategic height of both political and economic perspectives. Their economic growth is pushing forward this relationship. It can be concluded that China-Latin America relations are faced with an unprecedented historic opportunity of further growth. We should seize this opportunity securely and in a pragmatic and creative manner, join our hands together to explore new ways of thinking, new channels and new areas, and to open up a new world for China-Latin America mutually beneficial cooperation, so as to benefit our peoples.

To that end, I believe that it is important that the two sides do the following:

1. Tapping the potential of bilateral relations. While maintaining steady growth of bilateral trade, the two sides should work to optimize the product mix for their trade, enhance cooperation in hi-tech and other high value-added industries, and strive to diversify their products and balance their trade in a positive manner in the course of development.

2. Expanding mutual investment. The Chinese Government greatly supports Chinese businesses to explore and to increase their investment in the Latin American market. In the meantime, we also welcome investment in China by even more Latin American entrepreneurs. We should strive to become each other's important investors in the near future. To this end, we must overcome the geographical and cultural barriers, increase personnel exchanges and enhance mutual understanding. In addition, China's membership in the Inter-American Development Bank will undoubtedly facilitate greatly China's involvement in important investment programs in Latin America.

3. Enhancing mutual communications and addressing trade frictions in a positive and rational way. It is important that the two sides follow the rules and laws of the WTO and settle their differences from political, economic, diplomatic, government, businesses, intermediary and other various perspectives and at various levels, so as to avoid affecting the overall interests of bilateral friendship and cooperation.

4. Vigorously conducting inter-regional cooperation. China has made feasible studies on free trade negations with Chile, and has also had preliminary discussions with Mercosur on the same issue. We sincerely hope that two sides will proceed from that basis to open up a new road for inter-regional cooperation.

5. Enhancing exchanges of experience and drawing upon each other's strong points for common development. As China and Latin America are faced with the common challenges of inharmonious and imbalanced development and environmental degradation, China stands ready to enhance exchanges and sharing development experience with all Latin American countries to promote sustainable economic development.

Thank you.