SANTIAGO, Chile, July 28 (UPI) -- China is actively grooming at least three Latin American states as potential springboards for exploring and exploiting greater business and investment opportunities on the continent, new U.N. data indicated.
Chinese President Hu Jintao embarked on a high-profile, bridge-building official tour in the region in April but cut it short to return home after an earthquake hit western China. He visited Brazil but canceled stops in Venezuela and Chile.
Chile, itself hit by a major temblor in February and now in the throes of a major reconstruction program, is among countries where China has built a significant economic and trade presence.
China has also made gains in Colombia and Peru -- defying economists' calculations that only left-wing countries can warm up to Beijing. Colombia is a strategic ally of the United States in Latin America and Peru is ripe not only for inward investment but also in need of the turnkey project aid universally seen as a Chinese strong point.
U.N. Economic Commission for Latin America and the Caribbean statistics indicated that Chile, Colombia and Peru have China as one of the largest and most dynamic trade partners and are working on a common strategy for further liberalization of trade. Earlier this year, ECLAC said it saw Latin America's trade with China as central to the region's recovery.
China is a strong advocate of trade liberalization that generates new markets for its exports and is currently in dispute with Argentina over anti-dumping measures adopted by the country against China and Brazil. In a thinly disguised retaliation, China stopped importing Argentine soybean oil, a trade worth about $2 billion to Argentina and switched to U.S. and other suppliers.
Beijing's relationship with other Latin American countries has thrived, in contrast, because of Chinese hunger for raw commodities including copper and other metals, oil and livestock products.
"Overall the South American economies export commodities to China," said Osvaldo Rosales, head of the trade and integration department from ECLAC.
However, Latin America countries increasingly looked to China for greater investments. Analysts said the Chinese economists appeared driven by Beijing's overall goal of converting China's dollar reserves into imports and investments.
In line with a time-honored tradition going back to its insular communist years, China has been lavishing hospitality on Latin America leaders, senior officials and trade delegations who are making a beeline for Beijing.
Chinese bilateral trade with Latin America showed 10 percent year-on-year increase but growth in reported investments was slower, though this could be changing, analysts said.
An ECLAC report showed that in 2009, Chile, Colombia and Peru together received a
$100 million investment from China, less than 1 percent of the overall foreign direct investment in Latin America. Chinese investments in Argentina and Brazil weren't included in those figures but are likely to be substantial, analysts said.
ECLAC said Latin American countries needed to try harder to become a part of the Chinese production chain instead of remaining at the receiving end of small-scale investment.
"This must be a coordinated common effort, quite different from the individual initiatives launched by the different countries," said Rosales.
"Given its growing role in the world economy, Latin America should promote a
strategic alliance with China," said Rosales.
