China is a good partner of Latin America and the Caribbean that is able to boost the technology and resilience of regional production and supply chains by investing in infrastructure, and add value to the region's exports, said Ernesto Santibanez, professor of engineering at the University of Talca in Chile.
Trade between China and Latin America "was not greatly impacted" by the COVID-19 pandemic in 2020 mainly due to the recovery of the Chinese economy in the second quarter of the year and a growing demand for agri-food, metals and minerals, South America's top export products, Santibanez, a professor of industrial engineering and specialist in global value chains, told Xinhua in an interview.
China's gross domestic product (GDP) expanded 2.3 percent in 2020 and its foreign trade in goods reached record highs despite the global drop in exports due to the pandemic, according to official data.
Policies adopted by the Chinese government to stimulate domestic consumption and employment lifted the country's economy, "when predictions were that if there were no countermeasures in China, it would be a catastrophe because of its importance to global trade," since the Asian country "accounts for 30 to 50 percent of trade for certain countries, including investments of all kinds," he said.
Latin America's exports to China rebounded to their usual levels starting in June and were estimated to have grown by 2 percent last year, according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).
A recent ECLAC report showed the region's foreign trade saw its worst performance in 2020, down by 13 percent, since the 2008 global financial crisis, but the decline was tempered by the recovery of its main partners, particularly China.
Amid the pandemic, "the agri-food sector grew and the chains of Latin American countries are mainly in this sector, and they go in specialized, refrigerated or semi-refrigerated containers," as is the case for fresh fruit, shrimp, pork and white meats, among other food products, Santibanez said.
Thanks to the financing of infrastructure investment projects, "we have ports, roads and trains, and if we put that in the context of supply chains, they are important, because the mineral is moved by trains and highways before reaching the ports, and from there it goes to China. It's the same with agricultural products in general, such as fresh fruit and others," said Santibanez, who underscored the influx of Chinese capital helped to maintain and make trade resilient amid the pandemic.
Santibanez said he was in favor of "taking advantage of the investments that are already being made in greater technology and infrastructure, because that will continue to better prepare all our exports, which will continue to be raw materials in many cases. But there are also opportunities to jump in and add value hand in hand with good partners, and China is definitely a good partner."
In addition to its technological potential, China is an "important provider of credits, along with the World Bank and the Inter-American Development Bank," which opens up new possibilities for financing infrastructure projects that can "make the prices of our basic products competitive," Santibanez said.
Lithium, a promising industry in Chile and Bolivia and a beneficiary from Chinese financing, will spur the development of technological devices and electromobility, making it possible to build and maintain sustainable and resistant supply chains, he said.
