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Speech by Ambassador Zhou Wenzhong at the Conference on the Strategic Implications of China's Evolving Relationship with Latin America

(November 6, Center for Hemispheric Security Studies, U.S.A.)

Ladies and Gentlemen,

Dear friends,

Let me begin by thanking the Center for Hemispheric Security Studies and the Brookings Institute for inviting me to today's conference. I appreciate this opportunity to exchange views with so many experts on China-Latin America relations. I would like to share with you, in the context of China's policy toward the region, the background and my personal observations on the current state of China-Latin America relations, their economic and trade ties and exchanges in the security field.

Since the founding of new China in 1949, its relations with Latin America started to grow in a gradual manner for the following five decades. With the dawn of the new century, we have seen an all-round growth of the relations with progress at various levels and across a broad spectrum of areas. Today, the current state of bilateral relations could be described as featuring "more intensive exchanges, deeper cooperation and broader converging interests".

In the political field, the two sides have seen more frequent high-level exchanges, including bilateral visits as well as interactions on multilateral forum such as G8+5, G20 and APEC. China has established strategic partnership, high-level inter-governmental committee or strategic dialogue with a number of countries in the region such as Brazil, Mexico, Argentina and Venezuela. The Chinese Foreign Ministry has had political consultation or dialogue mechanisms with the Foreign Ministries of all the 21 countries in Latin American and Caribbean region that have diplomatic relations with China. On the multilateral front, China has established consultation or dialogue mechanisms with the Rio Group, the MERCOSUR (the Common Market of the South) and a group of Caribbean countries. The two sides enjoy deeper mutual understanding and trust and stronger coordination, cooperation and mutual support on major international issues that bear on each other's core interest.

In the economic area, the two sides have been working together to advance the mutually beneficial economic cooperation and trade. In 2007, trade between China and Latin American region for the first time exceeded US$ 100 billion, realizing the goal of "bringing the trade volume between China and Latin America to US$ 100 billion in 2010" put forward by President Hu Jintao 3 years ahead of schedule. China has signed free trade agreement with Chile and Peru and FTA negotiation with Costa Rica is underway. China and Latin America are each other's important trading partner, with encouraging progress made in cooperation in energy, telecommunication, infrastructure and other fields. I will expound on it in a while.

Exchanges and cooperation in culture, science and technology and other areas are expanding in an all-round way. China has signed agreements on cultural and educational cooperation with 15 countries in the region and initiated diverse exchange programs. Confucius Institutes have been set up in Mexico, Peru, Columbia, Brazil and Costa Rica. China and 13 Latin American countries have entered into agreement on inter-governmental scientific and technological cooperation, with nearly 100 bilateral cooperation projects every year. A total of 21 countries in Latin America have become the destination for Chinese tourists. Media exchanges are also growing. Eight media agencies have sent resident correspondents to Beijing and delegations composed of reporters and editors from major media agencies visit China every year. There are now 107 pairs of sister province/city relationships between China and the region. People-to-people exchanges have been expanding, which consolidates the popular support for China-Latin America friendship.

The Chinese Government attaches great importance to its relations with Latin America. A year ago, the Chinese Government released the Policy Paper on Latin America and the Caribbean. It stresses that China views its relations with Latin America from a strategic plane and reaffirms its commitment to build comprehensive and cooperative partnership featuring equality, mutual benefit and common development with countries in the region. The Policy Paper outlines the goals of China's policy on Latin America and the Caribbean as:

Promote mutual respect and mutual trust and expand common ground;

Deepen cooperation and achieve win-win results;

Draw on each other's strengths to boost common progress and intensify exchanges.

China stands ready to work with countries in Latin America and the Caribbean to pursue common development, follow the principle of equality and mutual benefit and bring China-Latin America relations to a new level. It will benefit the people of both sides and contribute to a harmonious world with enduring peace and common development.

Ladies and Gentlemen,

In recent years, the practical cooperation in the economic area has become the driving force and highlight in the overall relations, with three distinctive features:

First, considerable growth in trade both in quantity and quality. Two-way trade has taken off in recent years. Since the year 2000, the trade volume has been growing with an average annual rate of nearly 40%. It reached US$ 143.4 billion in 2008, up by over 100 folds compared with 30 years ago and 10 times that of the year 2000. Both sides have seen their importance rising in each other's external trade. China has become Latin America's second largest trading partner, only after the United States. Trade with Latin America in China's entire foreign trade is growing rapidly. Two-way trade has become more balanced. In 2007 and 2008, imports and exports were almost 50% to 50%, with a margin of less than US$ 500 million. Some South American countries even enjoyed a trade surplus with China. Trade mix continues to improve with more high value added products and diversity in commodities. Competitive products from both sides have entered each other's market, such as regional planes from Brazil, beer from Mexico, wine from Chile and Chinese container survey equipment, communication devices and automobiles.

Second, investment and financial cooperation are gaining momentum. As many Chinese businesses are going global, they have turned their eyes to Latin America that has favorable conditions in terms of resources and market. There are more than 400 Chinese enterprises registered in Latin America with operation covering energy, agriculture, infrastructure, telecommunication, light industry and automobile. These Chinese enterprises have been working hard to go native and local and have contributed to local economy and community. The financial cooperation, though just started, is playing an active role in providing guarantee for project financing and boosting economic growth of relevant countries. Many Chinese financial institutions including the National Development Bank of China and the Export-Import Bank of China have entered into partnership with banks in Mexico, Brazil and Venezuela and have carried out substantive cooperation. In addition, China has joined the Caribbean Development Bank and the Inter-American Development Bank, which offers new and important platforms for the two sides to enhance financial cooperation and facilitate business ties.

Third, join hands to counter the crisis. This year, the economies of China and Latin America have been hit rather severely by the global financial and economic crisis. Trade between the two sides has dropped. From January to August, the trade was down by almost 25% on a year-on-year basis. To cope with the crisis, China has stepped up cooperation with Latin America. China continues to import from the region. In the first half of this year, export from Latin America to China was down by 4%, much lower than the 35% decline with Europe and the United States and also below the 19% decline in intra-regional export. The Chinese Government will continue to create business opportunities for enterprises both in China and Lain America. On 25 and 26 this month, China and Columbia will jointly hold the 3rd China-Latin America Entrepreneur Summit. In order to maintain financial stability and enhance cooperation on financing, China signed a currency swap agreement with Argentina (with a total value of 70 billion RMB yuan); an oil for loans agreement with Brazil (US$ 10 billion); double the joint investment fund with Venezuela (to US$ 12 billion); contributed US$ 350 million to the Inter-American Development Bank, most of which will be used to help the poorest countries and SMEs to get credit. On the multilateral arena such as the G8+5 and the G20 Summit, China and relevant Latin American countries maintained close coordination and worked together to make the reform of international financial institutions more equitable and reasonable.

The rapid growth of the economic and trade ties between China and Latin America has drawn extensive attention with a lot of misinterpretations. In my view, such development should be viewed in the context of economic globalization and the stages of economic development both in China and Latin America.

To counter common challenges requires China and Latin America to step up mutually beneficial cooperation. Economic globalization has brought countries closer with greater interdependence. In the meantime, global issues such as the financial crisis, energy security, food security and climate change need collective response from all countries. China and Latin American countries are all developing countries. We are all at the crucial juncture in economic restructuring and social development and face the common task of development. Against this backdrop, for China and Latin America to intensify exchanges, learn from each other's experience and strengthen mutually beneficial cooperation and coordination, it would enable the two sides to share opportunities, achieve common development and bring benefit to people of both sides.

Complementarity is the integral driving force behind expanding cooperation. China has a big market and strong demand while Latin America enjoys rich resources and an early start in the development process. The two sides need each other and have much to offer to each other. In recent years, the two sides have witnessed notable progress in cooperation in trade, finance, energy, telecommunication and infrastructure. This is attributable to the high complementarity and converging interests between the two sides. The UN Economic Commission for Latin America and the Caribbean and other institutions have concluded that demand in China is an important factor that drives the economic growth in Latin America. China has also benefited a lot from its economic exchanges with the region. If the two sides are to counter the crisis, stimulate the economy and achieve common development, they have no better choice but to strengthen economic ties.

There is still room for stronger economic ties between the two sides. Due to geographical distance, lack of understanding and big cultural differences, China is lagging behind European countries and the United States in building business relations with Latin America. China-Latin America trade is less than 1/4 of that between Latin America and the United States and accounts for less than 6% in China's total foreign trade. The crude oil China imports from Latin America is only 7% of China's total oil import. And the commodities are not diversified enough. Last year, China's total direct non-financial investment in Latin America was just US$ 3 billion. Therefore the economic relations between the two sides have the potential and room to expand and deepen. It is true that China and some countries in the region may find themselves competing with each other in certain industries, which has caused some frictions. But it is hardly avoidable as the trade ties between the two sides continue to grow. China stands ready to coordinate the interests and accommodate other's concerns with a positive attitude and seek proper solution to disputes through friendly consultations as equal partners so that the economic relations will continue to develop in a healthy and sustained manner.

Ladies and Gentlemen,

Friends,

The theme of today's conference is the "Strategic Implications of China's Evolving Relationship with Latin America". When it comes to security, it is no longer limited to military dimension, but covers political, economic, cultural, social and other aspects. Transnational crimes, climate change, infectious diseases have emerged to be new global security concerns. The security of countries is never interconnected as today. China upholds a new security concept features mutual trust, mutual benefit, equality and coordination. One should work to safeguard its own security while respecting the concerns of other countries. This is the way to common security of mankind.

In recent years, China and Latin American countries have conducted exchange of visits among military personnel and exchanges between military academies. China has provided logistic supply and assistance to some countries, but never offensive weapons and equipment. It has signed agreements on judicial mutual assistance and countering transnational crimes with Mexico, Brazil, Venezuela, Peru and Columbia. There have been visits between the two sides by law enforcement personnel as well as information sharing and joint operation to crack down on transnational crimes such as narcotics, economic crime and illegal immigration. Since 2004, China has dispatched 8 groups with a total of 1,000 peace-keeping police to Haiti. This year, when Latin America and the Caribbean was first hit by H1N1 flu, China stood with the region and immediately provided assistance to relevant countries in cash and kind. China has also funded the regional anti-violence program through OAS and stepped up exchanges on disaster relief and reduction with the region. All in all, China stands ready to maintain and strengthen information and experience sharing with the region in the security field and on global security issues. We will work more closely with the region to enhance coordination and cooperation both bilaterally and multilaterally with a view to enhancing our capacity and better safeguarding the well-being of our people.

Ladies and Gentlemen,

I want to spend a few minutes to talk about the China-US consultation on Latin American affairs as I know many friends here from the United States would want to know. Under the framework of the China-US Strategic Dialogue, the consultation mechanism on Latin American affairs was set up between the two Foreign Ministries. Since 2006, the two sides have conducted three rounds of consultations and exchanged views on respective policies and relations with the region. China and the United States had cooperated well when China sought membership in the Inter-American Development Bank and in respect of counter narcotics and illegal immigration that relate to Latin America. China is willing to strengthen consultation with the United States and explore further cooperation.

Here I would like to reiterate that China is firmly committed to the path of peaceful development and pursues an opening-up strategy aimed at mutual benefit. China's effort to promote its ties with Latin America does not target any third party. I firmly believe that stronger relations between China and Latin America will bring more development opportunities to both sides. It will have positive implications on the peace, stability and development of Latin America and the Caribbean and contribute to peace and development of the Western Hemisphere and the world at large.

All of you are renowned experts and scholars from the United States, Latin America and China with years of research on China-Latin America relations. I believe that today's discussions will help people view and interpret China-Latin America relations with a comprehensive and objective light. We welcome your constructive views on how to advance such relations in a sound, steady and sustained fashion. The Chinese Embassy is happy to keep up communication with you and provide necessary facilities.

To conclude, I want to again thank the Center for Hemispheric Security Studies and the Brookings Institute for having me today and I wish this conference a big success.

Thank you.

 

 


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