China Learns to Say 'Hola'
NEW YORK, December 5, 2008 – As trade and development between China and Latin America continue to expand, both new opportunities for growth as well as new economic challenges are emerging. An Asia Society panel of experts on trade, investment, and politics discussed the deepening ties between the two regions, in a talk moderated by Christopher Sabatini, senior director of Policy at the Americas Society/Council of the Americas.
Donald Hanna, director of Emerging Market Economic & Market Analysis at Citigroup, first described the relationship between Chinese and Latin American export markets, in particular the changing dynamics of manufacturing markets in both regions as wage costs change and businesses migrate. Up to this point, Hanna explained, China has been focused on its coast and on exporting. Now, however, a considerable account surplus and increased share in global markets will probably help shift its focus inward and to domestic markets. This will present Latin American markets with potential increased opportunities to sell more to China and possible decreased competition.
International Trade Specialist at the Inter-American Development Bank Kati Suominen reflected on the "tremendous opportunity on both sides, both for China and for Latin America, when it comes to trade issues." In terms of growth, Latin American exports to and imports from China rose more quickly than they did with other countries over the past few years, and a reciprocal trend took place in China.
Investment relations between the two regions, meanwhile, are showing the same rapid growth. Suominen emphasized that while there are major opportunities to be gained from these increased ties, Latin American overall influence is still very small compared to China's other trading partners, and vice versa. Trade barriers need to be overcome, Suominen concluded, for these trade and investment relationships to continue and to expand.
John Delury, director of the China Boom Project and associate director at the Asia Society’s Center on US-China Relations, responded to the question of "what happens when it really is ‘zero sum’," speaking to the inevitable ramifications the current global economic downturn could have on China’s political culture, investments, and its relations with the rest of the world. Delury alluded to the underlying "other level" of Chinese society, and instances of the protests and demonstrations that are already regularly seen in China.
The panel also touched on China’s recent shift in attention, as a result of the downturn, from the international economy to its domestic economy. China’s priority right now is on maintaining growth and job creation to combat civil unrest and promote public sector expansion in an attempt to balance the decline in private investment. With regard to the expanding development interests of both Latin America and China, the panel emphasized further economic integration, Latin America’s eagerness to learn from China's experiences, and the "win-win situation" created as inter-regional development strengthens.
Reported by Kyle Carroll
Excerpt: China's growing influence in Cuba, and how American policy might adapt in response (4 min., 29 sec.)
Listen to the complete program (1 hr., 26 min.)