China's ties with Latin American good for all

Latin American nations attending a landmark forum in Beijing last week had high praise for China's pledges to dramatically boost economic and financial cooperation with their region. President Xi Jinping reiterated that over the coming decade, Chinese trade would be almost doubled to US$500 billion and direct investment boosted to US$250 billion. The deals will revitalise ties with key nations, strengthen partnerships and further build cooperation. Some people may view closer relations warily, particularly in the US, but the links are of benefit to all sides and, by extension, the world.

China and Latin America have good reason to move closer. Both are experiencing economic challenges after years of rapid growth. As developing countries, they share common interests and aspirations, a matter highlighted by Xi during a 10-nation trip to the region last July. He amplified that at the forum, pushing a previously agreed five-year plan that aims to achieve inclusive growth and sustainable development by focusing on trade, investment and financial cooperation and working together on energy and resources, infrastructure, agriculture, manufacturing and scientific and technological innovation.

Trade has grown more than twentyfold since 2000, when it was just US$12 billion, and total investment at the end of 2013 was US$65 billion. After the US, China has become Latin America and the Caribbean's second-largest trading partner and third-biggest source of foreign investment. Trade ties have become increasingly problematic, though, mostly caused by imbalances resulting from China's thirst for oil and raw materials and its exports of industrial products. That has led to a rise in protectionist measures and the sharp decline in oil prices has caused economic and financial difficulties for petroleum-producing countries Venezuela, Ecuador and Argentina.

Much as the US strategic rebalance to Asia is causing strains with Beijing, China's deepening ties with Latin America are viewed suspiciously by Washington. The US sees the region as its backyard and projects like the Nicaragua canal, being constructed by a Hong Kong-based firm, clearly rival the Panama canal, once controlled by the US. There is also a political dimension to Beijing's push, centred on the creation of a more just, reasonable and equitable world order. But it is trade and advancing development that is driving efforts and that will benefit not just Latin America, but will spill over to the US and beyond. Stepped-up relations can only be welcomed.