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Experts hail Li's Latin America trip

By CHEN WEIHUA in Washington ( Updated: 2015-05-20 08:06

Latin America experts in the US applauded Chinese Premier Li Keqiang's current visit to four Latin American countries as significant in boosting bilateral trade and investment ties.

Li is on a four-nation tour from May 18-26 that includes Brazil, Colombia, Peru and Chile, where China is the top trade partner.

"Premier Li's trip is very important," said Eric Farnsworth, vice president of the Council of the Americas. "It signifies a continued, growing Chinese interest in Latin America, not just in terms of trading commodities but also in terms of investment in infrastructure."

Farnsworth interpreted Li's trip as a follow-up on the commitment made by President Xi Jinping in Beijing in January to invest $250 billion in Latin America over the next 10 years.

He said Latin America is deficient in infrastructure, having underinvested for many years. China has investment capital and expertise, as well as a desire to penetrate new markets, given a slowing domestic Chinese economy.

"Therefore this can be a win-win exercise," Farnsworth said. "At the same time, China is adjusting its understanding of Latin American business conditions as well as expectations for investors. Attention must be paid to labor rights, environmental protection and anticorruption."

Farnsworth believes China is creating a more significant profile across the Western Hemisphere over the long term. "The visit of Premier Li is yet another step toward this ultimate goal," he said.

Margaret Myers, program director of China and Latin America at the Inter-American Dialogue, a think tank in the US, also portrayed Li's trip as indicative of China's growing economic presence in the region.

"China has been a critical economic partner for Latin America for over a decade, but is committed to achieving an even more prominent role in the region in the coming years," she said, also citing Xi's promise at the China-CELAC Forum in January to expand trade and investment in the region.

"Li's trip is a step in that direction. The large entourage of businesspeople accompanying him will also support this effort," Myers said.

She believes that Li's announcement of major investments in the four countries will demonstrate China's commitment to a sustained presence.

Myers pointed out that China has promised to diversify its foreign direct investment in the coming years after its investment in the region was criticized for overemphasis on resources.

"During his visit, Li is likely to announce investment in a wider variety of industries, as well as some major, headline-grabbing infrastructure projects," she said.

Harold Trinkunas, a senior fellow and director of the Latin America Initiative at the Brookings Institution, said the premier's talk about the relationship shows that China is listening to criticism that trade with China was too concentrated in certain sectors.

He told a seminar on Tuesday that Latin American countries in general appreciate China's approach of non-intervention, respect for international law, diplomacy and sovereignty.

They also like the fact that China's investment and trade are not conditioned by political factors, especially for countries without other options. "It resonates well, at least with Latin American countries," he said.

Trinkunas noted that China's investment and trade relationship with Latin America is still relatively new. China's trade with Latin America ballooned more than 22 times, from $12 billion in 1990 to $270 billion in 2013. Chinese investment also rose from $7 billion during all of 1990-2009, to $7 billion to $10 billion a year since 2010.

Cheng Li, director of the John L. Thornton China Center at Brookings, said Latin America is a huge market for China and is highly complementary with the Chinese economy.

But he noted that the US is closely watching China's move in its backyard, just like China is sensitive to the US presence in the Asia Pacific. "So it requires a balance there," he said.

Li believes that better interaction between China and the US will help to address concern that every move is seen strategically, while the importance of economic globalization and region economic cooperation has been overlooked.

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