Business / Economy

China's structural reforms open new doors to Latin America: experts

(Xinhua) Updated: 2016-04-07 13:28

MEXICO CITY - The ongoing economic structural reforms, launched as part of China's 13th Five Year Plan, are poised to have a positive impact on the country's trading partners in Latin America, regional experts say.

Designed in part to meet the needs of China's growing middle class and accompanying demand for better products and services, the reforms are expected to spur production of value-added goods, and promote investment in technology, innovation and human capital.

Marisela Connelly, a professor at Colegio de Mexico university, said since Latin America's economic growth in recent years relied largely on its raw material exports to China, "China's current structural reforms present a challenge, but they will also contribute to changing the region's growth model."

Trade between Latin America and China has seen unprecedented growth in recent years, but the current slowdown reveals the region's structural weaknesses of growth based on raw materials, according to a report entitled "The Latin American Economic Outlook 2016."

The report was jointly issued by the Organization for Economic Cooperation and Development (OECD), the Economic Commission for Latin America and the Caribbean (ECLAC) and the Andean Development Corporation (CAF).

To meet these challenges, the report recommends the region to "pursue innovative development policies to better cater to the growing Chinese domestic demand, notably in the agro-food industry and services."

The report also suggests Latin American countries shift investment on skill- and technology-intensive industries.

To better follow these recommendations, Latin American countries should establish a dialogue with China to seek areas of complementarity, said Connelly.

Enrique Dussel Peters, a founding member and coordinator of the China-Mexico Studies Center (Cechimex) at Mexico's National Autonomous University (UNAM), expects China's structural reforms to open new doors to Latin America in value-added sectors, including agro-foods, energy and infrastructure.

China's growing demand for processed meat, fish and fruits, among other foods, increases Latin America's potential to export value-added goods, Peters added.

In the field of energy, China's new push to reduce its reliance on fossil fuels and promote green energy gives more opportunities for cooperation between the two regions, he said.

In the area of infrastructure cooperation, China can help Latin America to narrow its infrastructure gap, which, according to the World Bank, would boost the region's annual economic growth rate by 2 percent, the expert stated.

"China's reforms will benefit Latin America", said Yang Zhimin, a researcher at the Latin America Institute of the Chinese Academy of Social Sciences, "because cooperating with an economy that has more sophisticated technology contributes to the modernization of the region's infrastructure and manufacturing, making the region more competitive."

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