With the start of 2026, the global economy is increasingly shaped by structural adjustment rather than cyclical recovery.

Growth remains uneven across regions, caused and strengthened by divergent monetary conditions, fiscal constraints and productivity gaps, while geopolitical fragmentation and "nationalist industrial policies" continue to reshape trade, investment and technology flows.

Persistent supply-chain reconfiguration — driven by resilience concerns and strategic competition — has replaced expectations of a rapid post-pandemic normalization.

The Global South faces increasingly constrained development prospects. The escalation of trade wars, the weaponization of international finance, and the growing use of sanctions, financial controls and access to capital markets as instruments of strategic competition have heightened volatility and uncertainty for emerging and developing economies.

At the same time, the weakening of multilateral institutions and cooperative frameworks has eroded collective problem-solving capacity, limiting policy space and reducing access to stable, long-term financing.

In this context, China-Latin America relations offer a revealing lens on how Global South economies navigate through slower growth, strategic rivalry and shifting patterns of globalization.

China enters 2026 amid efforts to achieve Chinese-style modernization, with policy firmly oriented toward high-quality development. Domestically, growth is increasingly driven by innovation, strategic emerging industries and the integration of digital and traditional sectors, while manufacturing is being upgraded toward higher value chains. Green and low-carbon initiatives and expanded domestic demand strengthen internal momentum. Externally, China is deepening engagement with the Global South, promoting high-standard opening-up, enhancing connectivity and fostering partnerships that support shared development and long-term prosperity of a community with a shared future for humanity.

Latin America faces modest growth prospects, constrained by persistent productivity gaps, infrastructure deficits and fiscal pressures. Nonetheless, cooperation is expected to remain robust, increasingly selective and concentrated in areas where commercial logic, infrastructure priorities and export diversification clearly outweigh geopolitical concerns.

Trade and investment continue in key sectors, with gradual diversification into new industries. Commodities — including agricultural products, minerals and energy — remain central, but diversification is emerging in processed foods, agri-tech, selected manufacturing and services. The key challenge for the region is to leverage Chinese demand to move up value chains rather than revert to re-primarization.

Chinese foreign direct investment has shifted from megaprojects to targeted, commercially driven ventures in infrastructure, renewable energy, logistics, manufacturing and digital services.

Latin America is increasingly seen as a platform for regional production, with green finance and partnerships with local enterprises and development banks playing a growing role.

Strategic sectors illustrate tangible economic links. Latin America has become a vital supplier of the raw materials and resources that support China's industrial production and manufacturing sectors. About 77 percent of Chile's copper exports went to China, while Argentine and Bolivian lithium — central to battery production — accounts for a growing share of global supply from the "lithium triangle", which holds roughly 40 percent of global lithium reserves. Brazil's soybean exports to China surged toward $50 billion in 2025, accounting for over 70 percent of its total soybean shipments.

Meanwhile, Chinese investment supports renewable energy projects, infrastructure development and local production of electric vehicles, both for domestic consumption and export markets. While Latin American countries expand their exports of commodities to China, trade flows are increasingly two-way: Latin America imports machinery, electronics, components, electric vehicles and processed goods from China.

China's engagement offers Latin America opportunities to secure long-term investment, technology cooperation and market access. Political stability, regulatory consistency and stable domestic policies will improve the effectiveness of this cooperation, enabling mutually beneficial investment, trade expansion and sustainable growth.

Looking ahead, the China-Latin America relationship in 2026 offers a platform for transformation. Pragmatic, strategically focused engagement can help the region diversify economies, strengthen value chains and boost productivity.

The author is former minister of tourism of Brazil, a distinguished professor at Tsinghua University and professor at the Chinese University of Hong Kong (Shenzhen).

The views do not necessarily reflect those of China Daily.