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China and Latin America must use BRI to deepen cooperation

As members of BRICS, China and Brazil need to deepen cooperation to optimize the opportunities they share and meet the common challenges they face. The two countries should also help elevate China-Latin America cooperation to a higher level.

Cooperation between China and Latin America has been deepening through the China-proposed Belt and Road Initiative, which comprises a five-pronged approach-policy coordination, infrastructure connectivity, unimpeded trade, financial integration, and enhancement of people-to-people ties.

So China and Latin America can further expand cooperation through the Belt and Road Initiative to help the world to contain the COVID-19 pandemic and reboot the global economy, leading to normal, sustainable economic development.

An increasing number of people in Latin American countries realize the importance of the Belt and Road Initiative in not only domestic, but also regional and global development. Not least because, based on the spirit of mutual respect, win-win cooperation and inclusiveness, the Belt and Road projects are aimed at benefiting all participants.

In particular, the Belt and Road projects have won widespread praise because they have contributed to developing countries’ economic growth, especially in infrastructure construction.

As for China-Latin America cooperation through the Belt and Road, among the 24 Latin American countries with diplomatic relations with China, 19 have signed cooperation memorandums under the Belt and Road framework. And the other five countries, including Brazil, Argentina and Colombia, are in talks on Belt and Road projects.

Chile and Panama, too, are trying to connect the Belt and Road projects, including Digital Silk Road, Green Silk Road and Innovative Silk Road, to their national planning mechanism.

That Chinese investment in Latin America has increased is good news for projects in energy and transportation among others. Also, policy communication has improved China-Latin America cooperation in new areas such as e-commerce and services, and the two sides are experiencing a structural change in trade, particularly in the higher levels of the value chain.

For China, Latin America is playing a more fundamental role in industrial and supply chains. Data from Chinese customs show food and material imports from Latin America increased during the first quarter of this year when China was battling the worst phase of the novel coronavirus epidemic. These imports helped stabilize China’s food supply.

And for Latin America, China is a large source of stable income. The pandemic has caused a sharp decline in Latin America’s exports to the European Union and the United States, which have traditionally been Latin America’s major trade partners, while its exports to China remained stable, even increasing slightly. In fact, Brazil’s soybean exports to China hit a record high in April and May.

The pandemic, ironically, has made China and Latin America realize each other’s increasing importance given the growing risks to globalization. The two sides have also realized that the inclusive Belt and Road Initiative will help them maintain stable and sustainable development.

Expanding cooperation in the post-pandemic era is in the mutual interest of China and Latin America. With the global economy facing both opportunities and challenges, the Belt and Road’s multidimensional development policy can be used to further expand trade and economic exchanges between China and Latin America. For example, the Silk Road of Health and the Digital Silk Road can help develop the industries that have been beneficial to people during the pandemic, including food, pharmaceuticals, and mobile apps and video games.

The Belt and Road Initiative can also help the two sides strengthen their policy communication and coordination, in order to deal with the short-term risks at a time when the pandemic has given rise to an unprecedentedly complicated global situation. For instance, the Belt and Road mechanism can help upgrade and expand China-Latin America cooperation and avoid systemic risks.

Besides, if China and Latin America further deepen cooperation under the Belt and Road framework in third-party markets, and between governments and social capital, the outflow effect will allow the two sides to share the gains with more parties.

And President Xi Jinping’s participation in the upcoming meetings of BRICS and Asia-Pacific Economic Cooperation, and the G20 summit is expected to further boost China-Latin America cooperation.
Source: China Daily

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