February 23 ,2017 , 07:40 PM
China trade thrives again in Latin America
Ding Gang

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In mid-16th century, a Spanish expedition sailed from Mexico, arrived at the central region of the Philippines and then caught the eastward-blowing winds off the east coast of Japan that took them back to Acapulco. In this way they mapped out a "silk road" across the Pacific Ocean.

The Manila Galleon was manufactured in the Philippines by Spanish-hired Chinese craftsmen. With a capacity of 300 tons, it was the most state-of-the-art freighter in the world at that time. During the 250 years from the latter half of the 16th century to the early days of the 19th century, such galleons traveling between the Philippines and Mexico mainly transported raw silk, China, brocade and cotton cloth from South China's Guangdong Province and East China's Fujian Province.

Andre Gunder Frank (1929-2005), a German-American economic historian and sociologist, wrote in Reorient: Global Economy in the Asian Age that by the end of the 18th century, 63 percent of the Mexico's total imports were from China and Peruvian businessmen usually purchased goods with millions of gold pesos, which is now equivalent to tens of millions of US dollars.

The goods carried by the China ships to Latin America were not only sold there but many of them were then transported on the backs of mules to the Atlantic coast in exchange for European commodities. Therefore a greater trade cycle across the earth was achieved.

Nowadays, local residents of Acapulco hold a "China Ship" festival in November every year to commemorate the first ever cargo ship setting sail from the port of Acapulco to Asia on November 20, 1564.

After more than 400 years, China-Latin America relations are enjoying rapid and comprehensive development and the trans-Pacific shipping lane has become one of the busiest trade routes in the world. The fastest flight takes you from Beijing to Rio de Janeiro within 24 hours.

China has become the most important source of the economic takeoff in Latin America. The gradually expanding and enhancing new Silk Road is bringing the two regions closer and closer and the vast Pacific Ocean no longer poses an obstruction.

The first ministerial meeting of the forum of China and the Community of Latin American and Caribbean States (CELAC)   held in Beijing on January 8 and 9. This is   the first time for China and the CELAC countries to hold a collective dialogue about politics, economy and trade, culture and people-to-people exchanges.

There were few exchanges and interactions between China and Latin American states regarding economic development only 10-odd years ago. But today the two sides are closely linked with each other.

China's robust economic growth has boosted its huge demand for resources. Most Latin American countries have seen a sharp increase in their trade surplus through exporting resources to China over the past decade. With financial performance improved and more jobs created, plenty of formerly poor families stepped into the middle class and more than 40 million people cast off poverty in Brazil alone.

Some economists are concerned that the economies of Latin American states may depend too much on the export of bulk commodities to China. Amid China's economic slowdown, these countries will perhaps lose their impetus for sustainable development. Nonetheless, it is vitally important to note that the foundation of Sino-Latin American cooperation has undergone fundamental changes over the past decade.

The bilateral collaboration between the two sides not only reflects the fact that emerging economies are playing an increasingly critical role in key variables of the global economy, but also demonstrates that their interconnections have been strengthened via South-South trade and investment. All these are unprecedented changes.

The present Sino-Latin American cooperation has gone far beyond their relationship in the era of grand galleons. Beijing put forward the initiative of building the Silk Road Economic Belt and 21st Century Maritime Silk Road, known as the "One Belt and One Road" in a push to expand trade and investment instead of adding to trade routes. Latin America will be bound to benefit a lot from the proposal.

In addition, today's Latin American states are different from the past. The changes in external economic power may prompt them to transform pressure into a driving force for their economic reforms and opening up to the outside world as well as seek new ways to promote their economy. 


Thursday, Jan 08, 2015 12:03 pm


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