China and Latin America aligning their development strategies within the framework of the Belt and Road Initiative

When meeting then Argentine president Mauricio Macri during the Belt and Road Forum for International Cooperation in May 2017 in Beijing, President Xi Jinping said that Latin America is a natural extension of the 21st Century Maritime Silk Road, and China is willing to strengthen cooperation with Latin America in aligning development strategies within the framework of the Belt and Road Initiative, promoting common development and building a China-Latin America community with a shared future.

During Argentine President Alberto Fernandez's visit to China in February this year, the two nations signed a memorandum of understanding on cooperation under the framework of the Belt and Road Initiative.

The priority for Belt and Road cooperation is to promote connectivity in five areas－policies, infrastructure, trade, finance and people-to-people exchanges. The participation of Latin American countries in the Belt and Road Initiative is conducive to expanding the coverage of the initiative, lifting its international status and promoting the economic and trade relations between China and Latin America.

China and Latin America should join hands and take the following measures to promote cooperation under the framework of the Belt and Road Initiative.

First, the two sides should uphold the principle of extensive consultation, joint contribution and shared benefits. This principle has been proposed by China to promote global governance and ensure the implementation of the Belt and Road Initiative. Extensive consultation means that both sides undertake feasibility studies of each cooperation project on the basis of equality. Joint contribution means that both parties work together to carry out cooperative projects with the same sense of participation and responsibility. Shared benefits mean that both parties enjoy the fruits of cooperation and attain win-win outcomes.

Second, the two sides should continue placing emphasis on the complementary nature of their economies. The rapid growth of overall China-Latin America relations can be attributed to the steady advancement of bilateral economic and trade relations. China has a comparative advantage in its strong manufacturing sector, while Latin America enjoys a comparative advantage in its abundant natural resources. In the era of globalization, such comparative advantages are complementary in nature and should be further utilized to benefit both sides.

Third, it is important to proactively respond to the adverse impact of the so-called US factor. On Nov 18, 2013, then US secretary of state John Kerry claimed in a speech at the Organization of American States that the Monroe Doctrine was over. But after Donald Trump became US president, the Monroe Doctrine was revived, and the US has been unprecedentedly vigilant and alert to the growth of China-Latin America relations. The US has not only gone to great lengths to sow discord and slander China for creating a so-called debt trap in Latin America, but also rolled out the America Crece program to counter the Belt and Road Initiative in Latin America. Although most Latin American countries do not want to pick sides, the impact of the Monroe Doctrine on China-Latin America relations cannot be underestimated.

Fourth, it is important to sign more free trade agreements with Latin American countries. The practice of international economic relations shows that free trade agreements are an important driving force for promoting bilateral economic and trade relations. To date, China has signed free trade agreements with Chile (in 2005), Peru (in 2009) and Costa Rica (in 2010). China is also negotiating FTAs with Panama and Ecuador, and an FTA feasibility study is underway with Colombia. In order to better extend the 21st Century Maritime Silk Road to Latin America, China and Latin America countries should actively explore the feasibility of signing more FTAs.

Fifth, mutual understanding should be strengthened. As the Chinese saying goes, friendship, which derives from close contacts between people, holds the key to sound state-to-state relations. China and Latin America are far apart, and there exist huge differences in culture, language, thinking and behavior between them. In this regard, the two sides should make full use of the strengths of globalization, the internet and information technology to intensify people-to-people and cultural exchanges. In addition, both sides should vigorously promote the development of tourism in the post-pandemic era so that more people can get rid of their prejudice and stereotypes with their first-hand experience.

In addition to the above-mentioned measures, China and Latin America should pay close attention to each other's demands.

For example, China should increase its imports from Latin America. Trade between China and Latin America is growing in an exponential manner, with bilateral trade volume rising from $12.6 billion in 2000 to over $300 billion in 2018 and over $450 billion in 2021.However, some Latin American countries have lodged complaints over their trade deficits despite the trade growth. On the one hand, Latin American countries should strive to strengthen the international competitiveness of their exports; on the other hand, China might need to import more from Latin America to reduce the trade imbalance. Needless to say, Latin American products must strengthen their competitiveness in the Chinese market.

Latin America should also strive to improve its business climate. The region has already become one of the key destinations for China's foreign direct investment. With the implementation of the Belt and Road Initiative, China's direct investment in Latin America is expected to further increase. In order to attract more Chinese investment, Latin American countries should proactively improve their business environment by eliminating the mentality of the "China threat" theory, simplifying investment laws, streamlining labor rules, curbing corruption and crimes, etc.

A lesson from history is that peaceful development, fairness and justice, and win-win cooperation are the right path to take. In the face of major changes unseen in a century, China and Latin America should actively take advantage of the Belt and Road Initiative to work together in overcoming difficulties, creating opportunities and jointly building a global community of development with a shared future.

The author is a distinguished professor and director of the Center for Latin American Studies, Shanghai University. The author contributed this article to China Watch, a think tank powered by China Daily.

The views do not necessarily reflect those of China Daily. Contact the editor at editor@chinawatch.cn