What are China's Trade Interests in Latin America

Best Growth Stock – Only 5% of China’s exports go to Latin America and only 6% of the region’s exports going to China. So what interest would be the Asian country?

Conventionally it has been talking to Chinese interests in Latin America are due to (i) the demand for natural resources, (ii) a market for manufactured goods from China, and (iii) resolution of the dispute over the political status and international recognition Taiwan as part of the People’s Republic of China.

Indeed, 57% of Latin American exports are minerals and 28% are derived from farming. On the other hand, 55% of imports from China in the region include machinery and electronic equipment, clothing and accessories 15% and 6% toys.

China has close trade relations with countries like Chile with whom he has an FTA since 2006, and Peru with whom he signed in 2008. However, the debate from the political economy is what is so beneficial or negative trade relations between America and China?

There is no doubt widespread enthusiasm among politicians and some businessmen from the region by attracting foreign direct investment in China, especially in extractive industries and mining, as an alternative to dependence that exists in the United States in terms of investment and market. Yet there is skepticism from some scholars and civil society organizations about the drawbacks it would bring to the non-traditional export industries.

Based on the Power Transition Theory of Organiski, we hypothesize that structural changes in the international hegemonic wars have meant to define the new distribution of power and new rules of the game in the world order. In contrast, Liberal Internationalism theory say that beyond having structural forces that define the political and economic interdependence, cooperation between states and the rules are the shaping global policies. Therefore under this scenario China would not be interested in imposing their rules of the game by provoking a war, but will through various policy mechanisms to change the status quo for purposes of ratification as a power.

Additionally, there have been obvious differences between U.S. and China into global governance issues such as climate change, promoting democracy and human rights, nonproliferation of weapons of mass destruction, and functions of international financial institutions are the World Bank or IMF. However, there are questions about whether there is an interest of China to have allies in its position on these issues.

The interest of China in Latin America are primarily economic. To maintain the dynamism and economic growth, China needs to import natural resources. We must be clear that it is a country that does not need cheap labor, but it needs a market for their export products. China can use the region to push the United States a little more outside the region and to position itself as an international political power.

Investment and trading complements the interests of China to Colombia and the region are very long term. Evidence of this is that they come to develop a friendly relationship for nearly 30 years, which is why the interests of China in the region go beyond economic or commercial interests, and so is political and cultural interests, test this is the establishment of Confucius Institute in Latin America, which aim to promote culture and the teaching of Mandarin.