On October 31, the 520 new energy bus made in China drove in the main urban area of Santiago, the capital of Chile. Photo by Xinhua News Agency reporter Xin Yuewei.
Recently, the United Nations Economic Commission for Latin America and the Caribbean (hereinafter referred to as "ECLAC") released the "International ** Outlook for Latin America and the Caribbean 2023". In response to the current sluggish global economic recovery and the dilemma of Latin American economic and trade development, the Latin American region looks forward to continuing to improve the quality of economic and trade exchanges with China, helping Latin American countries achieve industrialization and export diversification, and accelerate the path of sustainable modernization.
* Slowing growth.
The report points out that due to factors such as weak global demand, raw materials*** and geopolitical crises, the development of Latin America in 2023 is undergoing a complex situation, and the growth momentum previously shown has slowed down significantly or even regressed.
In terms of goods**, from January to August 2023, the total value of imports and exports in Latin America appeared**. On the import side, imports** and volumes fell by 25% and 45%。At the same time, global***, many of Latin America's main imports, such as computers, automobiles and equipment parts, have further weighed on import demand in the region, which is expected to decline by 6% in 2023.
In terms of goods exports, although the export volume increased by 1% year-on-year from January to August, the total export value fell by 24%。During this period, the region's exports of key commodities such as oil, natural gas, copper, wheat, corn and other indices fell 115%, including about 25% in energy***, reversing the commodity** surge seen in the same period in 2022 due to the outbreak of the Russia-Ukraine conflict. The latest data show that the export earnings of the region's major economies have all declined year-on-year.
Compared with the weakness of goods**, the report pointed out that the import and export volume of services** in Latin America has increased this year. Its exports are expected to grow by 12%, mainly due to the growth of tourism and modern services including finance and information technology, which saw a 17% year-on-year increase in exports in the second quarter of 2023. However, the growth curve of tourism and transport imports and exports in Latin America has begun to decline from the peak reached in the fourth quarter of 2021 and is now basically back to pre-pandemic levels, reflecting trends such as the sluggish recovery of international tourism, the decline in ocean freight rates, and the weakness of regional cargo** in 2023, and the growth rate of Latin American services** is expected to slow down significantly compared with 2022.
Overall, the region's deficit will narrow slightly compared to 2022. The decline in goods imports will be greater than the decline in exports, and Latin America is expected to achieve a surplus of $37 billion in 2023 after a deficit of $28 billion in 2022Exports of services will grow faster than imports, and the deficit in services is expected to fall to $156 billion from $174 billion in 2022.
China is an important partner.
The report is full of confidence that the Chinese market will continue to drive the economic and trade development of Latin America, and has a positive expectation for China's economic growth in the second half of this year, and expects China to become the fastest growing export market in the region, with the value of China's exports expected to increase by 47% will help Latin America contract its decline in the first eight months of this year.
This confidence stems from the fact that China and Latin America and the Caribbean have gradually deepened and strengthened their inseparable economic and trade ties over the years. The report pointed out that from 2000 to 2022, the bilateral volume has increased by nearly 35 times, and the natural complementarity of the product structure of China and Latin America has enabled the two sides to maintain long-term vitalityWith the advancement of China's urbanization process, the demand for high-quality food will further increase, and Latin America, with its abundant natural resources, has the necessary comparative advantages to become China's most nutritious, safe and high-quality food.
In addition to the strong complementarity between China and Latin America, the long-term and stable development of bilateral relations has also injected lasting impetus into maintaining economic and trade vitality. Wang Ping, a professor at the Center for Latin American Studies at the School of History of Nankai University, said that in recent years, under the guidance of the diplomatic strategy of the head of state, the political mutual trust between China and Latin America and the Caribbean has been continuously strengthened, relying on the mechanism of the Ministerial Conference of the China-Community of Latin American and Caribbean States Forum, as well as a series of cooperation platforms such as the China-Latin America and the Caribbean Entrepreneurs Summit and the China-Latin America Investment and Cooperation High-level Forum, the two sides have continuously strengthened exchanges between investment promotion agencies and business associations, promoted enterprises to deepen pragmatic cooperation, and developed a number of new cooperation areas such as biomedicine and renewable energy.
The latest data shows that in the first three quarters of 2023, China's imports and exports to Latin America increased by 51%, which is higher than the overall growth rate of China's foreign trade. Among them, China's imports from Latin America have increased quarter-on-quarter for two consecutive quarters, and the quarter-on-quarter growth rate in the third quarter reached 85%。
The report also mentioned that under the impetus of the hot **, the Latin American region has once again set off a wave of signing agreements with China. Since 2023, China has formally signed FTAs with Ecuador and Nicaragua, and started negotiations on a FTA with Honduras in July. Uruguay has previously completed a feasibility study on a free trade agreement with China, and during a recent state visit to China, Luis Alberto Lacalle Pou of the Eastern Republic of Uruguay said that one of the purposes of the trip was to "be able to hand over the baton closer to the goal".
Sun Yanfeng, deputy director of the Institute of Latin American Studies of the China Institute of Contemporary International Relations, said that as one of the important contents of the Belt and Road Initiative, China has continuously strengthened its unimpeded measures to expand the export channels of Latin American countries to China, of which the signing of free trade agreements is one of the main ways. Adhering to the principles of equality, respect, mutual benefit and win-win results, China has signed the FTA, which has truly increased the quantity of Latin American countries' exports to China, and broadened the types and quality of commodities exported to China, which has won wide recognition from Latin American countries and sent a positive signal to the international community to support multilateralism and freedom, and promote the stable recovery of the global economy.
Explore the cooperation model of "teaching them to fish".
In response to the current slowdown in development, the Executive Secretary of ECLAC, Salazar Hirinachis, said at the launch of the report that the main goal of the economic and trade development of the region, especially South America, in the future is how to increase the diversity of export products and reduce dependence on raw material exports. To this end, regional countries should adopt policies to strengthen industrial agglomeration, and gradually make up for the shortcomings of transportation and logistics infrastructure, and further promote facilitation.
However, at present, the transformation and development of Latin America is facing a large funding gap. The report shows that most countries in the region are facing fiscal austerity, with slow economic growth over the past decade, growing by an average of 0. per year from 2014 to 2022, the report shows7 per cent, resulting in a low level of public investment and insufficient infrastructure stock to drive growth and promote productive development. Currently, total infrastructure investment accounts for about 2% of GDP, and several studies believe that the region needs to spend between 5% and 8% of GDP annually on providing infrastructure services.
The report points out that China is providing new opportunities for Latin America to achieve transformation and development. In recent years, China and Latin America have not only maintained the best vitality, but also increased investment in Latin America, and the investment field has also shifted from a relatively single energy mining to promote diversified production cooperation, especially to clean energy, information and communication, advanced manufacturing, Internet, biomedical and other fields, and strengthen cooperation in scientific and technological innovation, which will have a significant positive impact on increasing the added value of Latin America's exports and enhancing its position in the global industrial chain.
China is seeking mutually beneficial relationships with Latin American countries, not as dumping markets for industrial goods. Sun Yanfeng said that in recent years, China has continued to provide financing loans for Latin American countries through multilateral financial institutions such as China-Latin America production capacity cooperation investment**, the New Development Bank of the BRICS countries, and the Asian Infrastructure Investment Bank, especially to encourage all kinds of financing for Latin American industrialization projects, from the modern railway reconstruction project of the Belgrano freight railway in Argentina, to BYD, Great Wall and other companies choose to invest and build factories in Brazil, etc., China's various types of investment are rapidly promoting the modernization of infrastructure and industrial upgrading in Latin American countries, for the future development of Latin America." Teach them to fish".
Wang Ping said that in the process of carrying out various construction projects in Latin America, Chinese enterprises are also constantly exploring and innovating cooperation models. Previously, Chinese enterprises were more responsible for design, procurement, construction and other aspects through the general contracting model, and had less cooperation with local enterprises in Latin America. At present, the public-private partnership model has gradually become a trend, and through joint investment and operation with local enterprises, Latin American enterprises can Xi master more technical links and management experience from middle school, and further empower the high-quality development of Latin America. (Economic ** reporter Yang Xiaolin).