China Seeks Economic Dominance in Latin America
Chinese President Xi Jinping discusses free trade at APEC Summit
Chinese President Xi Jinping’s visit to Chile following the Asia-Pacific Economic Cooperation (APEC) summit signaled deepening relations between China and Latin America. President Xi and Chilean President Michelle Bachelet signed twelve new cooperative documents during the visit on November 22 that aim to further economic relations and increase trade.China and Chile announced a renegotiation of their bilateral free trade agreement. The agreement is estimated to currently cover 97 percent of Chinese exports to Chile as tariff free, and, consequently, the deal secures China as Chile’s largest trading partner. The twelve deals between China and Chile were a part of a greater forty deals signed by Xi during his tour of the region.
Experts speculate that China’s efforts are an attempt to build a free-trade region in the Pacific following the apparent death of the Trans-Pacific Partnership, a U.S.-led trade agreement that notably excluded China—thus hampering its influence in the region.
The release of a policy paper by the Chinese government on December 1 highlighted the belief that China is continuing to seek increased dominance in the region. The paper focused on developing and deepening ties with a number of countries throughout Latin America and the Caribbean. Representatives of the Chinese government pledged to increase trade with the region to upwards of $500 billion by 2025 and announced new investment targets as well.
However, economic relations with China are not uniformly desired throughout the region. Members of the Argentine government characterize trade with China as a “structural deficit” that harms their nation’s economy and needs to be renegotiated. Chilean experts also warned against pursuing closer economic and diplomatic relations with China at the expense of traditional links to the United States.
China’s desire for stronger economic relations with Chile and the rest of Latin America correlates with the seeming withdrawal of the United States from the region, but the willingness of Latin American nations to pursue free trade with China remains to be seen.