29 Jun, 2012
SANTIAGO, June 27 (Xinhua) — Chinese Premier Wen Jiabao delivered a speech at the United Nations Economic Commission for Latin America and Caribbean (ECLAC) on Tuesday. In order to deepen strategic relations with the region, he announced the creation of a cooperation fund for the region with an initial input of US$5 billion to promote, inter alia, the development of the manufacturing industry, as well as a credit line of US$10 billion to boost infrastructure cooperation through the Bank of China.
In a message directed at the Latin American and Caribbean region on the occasion of his official visit to Brazil, Uruguay, Argentina and Chile, the premier proposed the creation of a China-Latin America cooperation forum and the establishment of a regular dialogue mechanism with the troika of Foreign Ministers from the Community of Latin American and Caribbean States (CELAC) – with a first meeting due to be held during 2012. He put forward concrete proposals for cooperation in areas such as food security, innovation, science and technology and sustainable development.
In the context of the visit, ECLAC itself launched the document “The People’s Republic of China and Latin America and the Caribbean: Dialogue and Cooperation For The New Challenges Of The Global Economy,” which examines recent trade and investment trends.
According to the report, trade between China and the region is strikingly interindustrial, which means that China exports manufactured goods to the region, while Latin America and the Caribbean exports mainly raw materials. The document states that this reduces the potential for possible Chinese-Latin American business partnerships, and hampers a more effective integration of the region’s countries into the production chains of Asia-Pacific.
Only four of the region’s countries (all in South America) posted surpluses in their trade with China in 2011: Brazil, Chile, Venezuela and Peru. In all cases, this was due to sales of a smaller number of commodities. At the other extreme there is Mexico’s trade deficit with China: while less than 2% of Mexican exports in 2011 went to China, 15% of Mexico’s imports that year came from China.
With this in mind, Wen Jiabao stated in his speech that China does not seek to have a trade surplus, but rather that it wishes to have balanced trade with the region by increasing future imports of products with greater added value from Latin America and the Caribbean. According to the country’s Premier, China expects the volume of trade with the region to be worth more than US$400 billion dollars in the next five years.
The Executive Secretary of ECLAC, Alicia Barcena, welcomed Wen Jiabao on behalf of the Commission. According to her, “Latin America and the Caribbean’s growing economic and trade ties with China raise opportunities and concerns”, and it was therefore essential to set up an agenda for dialogue and cooperation between the two parties.
The opportunities of the relationship with China mentioned by Ms. Barcena included improved terms of trade, higher growth rates and additional resources to invest in education, infrastructure and innovation. The concerns related to the reprimarization of exports, deindustrialization, Dutch disease, land access and immigration.
The following is the full text of Prime Minister Wen’s speech:
It gives me great pleasure to come to the Economic Commission for Latin America and the Caribbean (ECLAC) on the occasion of my visit to four Latin American countries after attending the UN Conference on Sustainable Development. I wish to begin by extending, on behalf of the Chinese government and people, cordial greetings to the people of Chile and other Latin American and Caribbean countries. I also wish to pay high tribute to ECLAC for its efforts over the years in promoting relations between China and Latin America and the Caribbean.
Latin America and the Caribbean is a magical land known for its vast expanse, spectacular landscape, rich resources and splendid cultures. It is where the Maya, Inca and Aztec cultures were nurtured, and it is home to both natural wonders and an ancient civilization of the world. The lush and extensive Amazon virgin forest, the majestic Andes mountains and the charming Caribbean sea make this region a distinctive and enchanting place.
The astronomical calendar invented by the Mayans, the Pyramids of the Sun and the Moon built by the Aztecs and the maize, sweet potato and pumpkin cultivated by the Incans are the fine achievements of human civilization known and shared across the world. They attest to the exceptional ingenuity of the people living on this land.
Latin America is known for its rich literature and art. It has produced the passionate and exquisite Latin songs and dances, and such literary giants as Pablo Neruda, Gabriel Garcia Marquez and Jorge Luis Borges. The Latin American civilization has come into being through the long course of development of this region. It is also a product of exchanges and mutual learning with other civilizations in the world. Such cultural interactions are a natural development independent from people’s will.
Both the Latin American and Chinese civilizations are open, inclusive and innovative, always ready to draw upon the fine achievements of all human civilizations. This is the fundamental reason why our two civilizations have survived and thrived.
This is my third visit to Latin America. It has given me the opportunity to gain more first-hand knowledge and do some deep thinking about the Latin American countries. Everywhere I went, from Rio de Janeiro to Montevideo, and from Buenos Aires to Santiago, I could feel the warm hospitality of the Latin American people and the vibrancy of economic and social development in the region.
What has impressed me most is that governments of the Latin American countries have adapted their domestic and foreign policies to the changing circumstances in recent years and focused on pursuing coordinated economic and social development. You have effectively countered the international financial crisis, achieved steady economic recovery, and become one of the important engines driving global recovery. You have made concerted efforts in advancing regional integration and established the Community of Latin American and Caribbean States (CELAC).
This has bolstered the coherence, capability and influence of the region. Latin America and the Caribbean today is a major emerging power on rapid rise and plays an increasingly important, constructive role in global economic governance, sustainable development and other critical issues. As a good friend and good partner of the Latin American and Caribbean people, we feel truly happy for what you have achieved. We firmly believe that a growing Latin America and the Caribbean serves the interest of world peace and development.
In spite of the geographical distance, our two sides have a time-honored history of friendly exchanges. Entering the new century, our relations have embarked on a fast track of development, showing sound momentum of all-dimensional, wide-ranging and multi-tiered growth. High-level exchanges between us have become closer and mutual political trust has deepened.
In 2008, the Chinese government issued China’s Policy Paper on Latin America and the Caribbean, and proposed to build a comprehensive and cooperative partnership featuring equality, mutual benefit and common development between the two sides. It was well received by the Latin American and Caribbean countries.
Our practical cooperation has made substantive progress. Since 2001, two-way trade has been growing at an average annual rate of over 30%, reaching US$241.5 billion last year. China has become Latin America’s second largest trading partner and a major source of investment. Our cooperation in finance, resources, energy, infrastructure, high technology, agriculture and other fields has also expanded, and cultural and people-to-people exchanges have deepened.
Both China and Latin America are birthplaces of human civilization with similar national conditions and splendid cultures. And now, we are at the same stage of development, face the same task of development and share extensive common interests. As long as we continue to treat each other on the basis of mutual respect and equality, and accommodate each other’s core interests and major concerns, we can be good friends who trust and rely on each other, and good partners who draw on each other’s strengths and cooperate for mutual benefit. Our friendship will stand as firm as the Himalayas and the Andes.
Ladies and Gentlemen,
The world today is undergoing major development, major adjustments and major changes. The impact of the international financial crisis continues to deepen and world economic recovery remains difficult and tortuous. Profound transformation in relations between countries and the international system is in the making, presenting a growing number of new issues to the international community.
Both China and the Latin American and Caribbean countries are developing countries enjoying bright prospects and vigorous growth. Both are important parts of the emerging power in the world and positive forces for world peace and common development. Under the complex international situation, both our common interests and mutual needs are growing, and our enterprises and peoples are more eager to enhance exchanges and cooperation.
Stronger win-win cooperation and mutual reliance between us serves the fundamental interests of our people and balanced development, prosperity and stability of the world. China is ready to advance its comprehensive and cooperative partnership with Latin America and the Caribbean with utmost sincerity and raise our practical cooperation to a new level. In this context, I wish to put forward the following proposals:
- First, deepen strategic cooperation on the basis of mutual political trust. We should increase high-level contacts, establish various forms of government consultation mechanisms, expand exchanges between legislatures, political parties and local governments, and enhance experience sharing on governance. China proposes to launch a cooperation forum between the two sides as a higher platform for enhancing our overall cooperation.
China is a staunch supporter of the efforts of Latin American and Caribbean countries in seeking strength through unity. We would like to set up a regular foreign ministers’ dialogue mechanism with the CELAC Troika and hold the first round of dialogue within this year. We are also ready to explore the possibility of establishing a China-CELAC leaders’ meeting mechanism at an appropriate time. We look forward to working with countries in this region to play a constructive role in international affairs and safeguard the common interests of developing countries.
- Second, expand common interests with a focus on economic cooperation and trade. The pursuit of common interests lies at the core of China-Latin America relations. The strong complementarity of our economies opens up broad prospects for our business cooperation. The two sides should oppose trade protectionism, open markets wider to each other, improve the trade mix, enhance customs and quality inspection cooperation, and bring our trade to over US$400 billion in the next five years. China does not pursue a trade surplus. We not only import raw materials from this region, but want to buy more manufactured goods and high value-added products so as to achieve balanced and sustainable growth of our trade.
Our two sides should step up cooperation in investment and finance. China will initiate a cooperation fund between the two sides. Chinese financial institutions will contribute a first tranche of US$5 billion to the fund, and we welcome the participation of Latin American and Caribbean countries in developing the fund for our joint investment in cooperation projects in manufacturing, high and new technologies, sustainable development and other fields.
The China Development Bank will coordinate the efforts in setting up a special loan of US$10 billion to facilitate our cooperation in infrastructure development, including railways, roads, ports, power plants, power grids and telecommunication facilities that are closely linked to production and people’s livelihood. We will continue to encourage competitive and reputable Chinese companies to invest in this region to enhance our industrial cooperation. At the same time, we want to explore the possibility of establishing industrial cooperation mechanisms with Latin American and Caribbean countries and this region as a whole to promote closer industrial links and collaboration.
China is considering signing currency swap agreements with more Latin American and Caribbean countries, settling bilateral trade with local currencies with them, and establishing more bank branches in each other’s countries. The Chinese government will continue to provide economic assistance to the relevant countries in this region as its ability permits and undertake more projects that benefit the local people. The sixth China-Latin America and the Caribbean Business Summit will be held in Hangzhou, China this October, and we welcome the active participation of companies from this region.
- Third, safeguard food security through agricultural cooperation. Latin America and the Caribbean, blessed with fertile land and favorable weather conditions, has a unique advantage in agricultural production, while China has been a long and stable export market for farm produce from this region. Our agricultural cooperation can bring benefits to both sides. China proposes to launch a China-Latin America and the Caribbean agricultural ministers’ forum and hold the first meeting in China in 2013.
We propose to put in place an emergency food reserve of 500,000 tons between the two sides for natural disaster response and humanitarian relief. The Chinese government will contribute US$50 million to set up a special fund for our agricultural cooperation and development. We plan to establish five to eight agricultural research and development centers, agricultural processing demonstration parks and agricultural investment zones in this region. The two sides will exchange 500 agricultural experts and technicians in the next five years and strive to bring our trade in agricultural products to over US$40 billion.
- Fourth, enhance people-to-people friendship through cultural exchanges. Both the Chinese and Latin American civilizations are open and inclusive. We can draw on each other’s strengths and seek common progress through exchanges. Deeper people-to-people and cultural contacts will help expand the common understanding between our peoples and pass on our friendship from generation to generation.
We should actively promote inter-civilizational dialogue, expand cooperation in education, culture, media, sports and other fields, and encourage mutual respect and harmonious co-existence among different races, religious beliefs and cultures. The Chinese government supports setting up Chinese cultural centers in this region and will offer 5,000 scholarships to Latin American and Caribbean countries in the next five years.
China proposes to launch a scientific and technological innovation forum between the two sides for stronger cooperation in space and aviation, new energy, resources and the environment, ocean, and polar science research. We support the holding of a China-Latin America and the Caribbean young political leaders’ forum to provide more opportunities for youth exchange between the two sides.
Both China and Latin American and Caribbean countries have rich tourism resources, and there is great potential for our cooperation in this area. It is necessary to put in place a tourism facilitation mechanism between the two sides as quickly as possible to promote each other’s tourism resources, and encourage airlines to open more direct flights to facilitate personnel exchanges.
Ladies and Gentlemen,
Since launching the reform and opening-up program in the late 1970s, China, an ancient country in the East, has undergone momentous changes. But China’s basic national condition of being a developing country remains unchanged. China’s foreign policy of strengthening solidarity and cooperation with other developing countries remains unchanged. And the Chinese people’s sincere friendship towards the Latin American and Caribbean people remains unchanged.
As China grows and gets more closely linked with the world, it needs, more than before, a peaceful and stable external environment and closer cooperation with other countries. Peaceful co-existence, openness and inclusiveness, and pursuit of common development are the valuable experience that we have gained in developing external relations over the past 30-plus years. They are also the important principles that have made our continuous progress possible.
China will unswervingly follow the path of peaceful development, strive for a peaceful international environment to develop itself and promote world peace and prosperity with its own development. This serves the fundamental interests of all Chinese people and will bring more benefits to people around the world, Latin America and the Caribbean included. China’s development and progress represents an opportunity to the world, not a challenge, less still a threat.
As a Chilean saying goes, “Friends are like stars in the sky. Though far apart, they can still see each other.” Let us join hands and work together to usher in a new era of lasting friendship and common development between China and Latin America and the Caribbean.