PRESIDENT XI JINPING’S tour of Argentina, Brazil, Cuba and Venezuela in July 2014 confirmed the importance of China’s foreign policy to the region once thought of as America’s backyard. During the trip, Xi attended a meeting of the BRICS (Brazil, Russia, India, China and South Africa) group of emerging powers at Fortaleza, Brazil, as well as the first summit between China and the Community of Latin America and the Caribbean States (CELAC) in Brasilia, Brazil. Xi expanded China’s bilateral strategic partnerships and co-operative agreements with Latin American countries during the ten-day journey. But his most pressing task was to revitalise economic relations with key trading partners in the region.
Between 2000 and 2013, trade between China and Latin America skyrocketed from US$12 billion to over US$261 billion, while total Chinese investment in the region is now approximately US$65 billion. By 2016, China is likely to supplant the European Union as Latin America’s second-largest trading partner after the US.
However, the pace of growth in trade has slowed in recent years, mainly due to an economic downturn in China and protectionist policies in Latin America that have stymied the flow of cheap Chinese manufactured goods into the region. Xi’s visit allowed China to work through trade and investment issues with Latin American nations, especially with its biggest trading partner in the region, Brazil. Through CELAC, China has also offered up a US$20 billion infrastructure fund to construct railways across South America, ostensibly to lower the costs of trade, just as it has done in Africa.