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2015 Business Review XV: Seize the Opportunity to Accelerate the Upgrading of the Economic and Trade Cooperation between China and Latin America
  

In 2015, amid the global economic downturn, fall in commodity prices, currencies devaluation of main Latin America countries and other adverse effects, the quality improvement and upgrading between the economic and trade cooperation between China and Latin America remain steady and their cooperation in the trade, investment, project contracting, financial and other fields is fruitful, promoting the mutually beneficial and sustainable development of their economic and trade relations.

High-level reciprocal visits promoted the economic and trade cooperation between China and Latin America. In May 2015, Chinese Premier Li Keqiang successfully visited four Latin American countries, namely, Brazil, Colombia, Peru and Chile, where Li puts forward a "3x3" new capacity cooperation mode to promote the industry docking for a updated version of the cooperation between China and Latin America. Leaders of Argentina, Ecuador, Venezuela, Cuba, and other Latin American countries visited China or attend activities in succession. Those visits further consolidate the traditional friendship of China and Latin America, and enhance political mutual trust, laying a solid foundation for the quality improvement and upgrading of the economic and trade cooperation between China and Latin America.

Inter-governmental cooperation mechanism continued to be improved. In 2015, China respectively held economic and trade meetings with Brazil, Peru, Chile, Bolivia, Venezuela and Cuba, through which, the MOFCOM actively promotes the bilaterally pragmatic cooperation in trade, investment, infrastructure and other fields. China and Chile launched joint research on the upgrading of China-Chile free trade agreement. In addition, China has set up infrastructure cooperation forum between China and Latin America within the framework of Sino-Latin America forum. The first Sino-Latin American infrastructure cooperation forum was successfully held in Macao, attended by ministerial delegations from 14 Latin American countries, which developed market introduction, project promotion and enterprise docking activities.

Bilateral trade structure optimization improved further. In recent years, at the same time as actively expanding imports from Latin America, China propelled the exports of its equipment manufacturing and, Latin America has become an important export market of China's automobile, rail transportation, communication, engineering machinery, and other products. In 2015, China's imports from Latin America grew and the bilateral trade structure continued to be reasonable; however, as affected by such factors as the fall in commodity prices, total trade volume between China and Latin America declined to USD 236.545 billion, down 10.28% on year-on-year basis. China's exports to Latin America sit at USD132.216 billion, falling by 2.97% year on year and its imports from Latin America dropped by 18.09% when compared with last year to USD104.329 billion. At present, China has become Latin America's second-largest trading partner, also the biggest trading partner of many Latin American countries such as Brazil, Chile.

Chinese investment in Latin America continued to grow. Latin America is China's important overseas investment destination. As at 2014, Chinese enterprises' direct investment stock in Latin America was USD106.11 billion, involving energy, mining, agriculture, finance, infrastructure, manufacturing, services, and many other fields. In recent years, Chinese enterprises mainly gave their priority to mergers and acquisitions in Latin America in terms of major investments. In 2015, China's non-financial direct investment flow to Latin America was USD21.46 billion, an increase of 67% when compared with USD 12.85 billion in 2014.

A breakthrough was realized in terms of the projects contracting cooperation transformation. Infrastructure is a new growth point of economic and trade cooperation between China and Latin America. In 2015, the contract amount signed by Chinese enterprises for projects contracting in Latin America reached USD18.16 billion, and the turnover, USD16.4 billion, respectively increasing by 10.3% and 24.4% when compared with 2014. Kirchner Argentina - Saipeilike hydropower station and Belgrano freight railway reconstruction, Brazil Meilishan ultra-high voltage power transmission phase II project, Bolivia Rurrenabaque highway, Colombia Madaosi highway and other major projects undertaken by Chinese enterprises have been or will be implemented. Columbia Madaosi highway project is the first PPP infrastructure project won by Chinese companies in Latin America, having far-reaching significance on the promotion of the transformation and upgrading of infrastructure cooperation between China and Latin America.

Financial cooperation promotes the transformation and upgrading of the trade and economic cooperation between China and Latin America. In 2015, to support the capacity cooperation projects between China and Latin America, China announced the setup of a USD30 billion production capacity cooperation special fund. China and Brazil also jointly announced the setup of USD 20 billion capacity expansion cooperation fund between China and Brazil. Within the framework of "1+3+6" pragmatic cooperation advocated by China, USD 20 billion infrastructure special loan, USD 10 billion concessional loan and USD 5 billion cooperation fund between China and Latin America have been or are about to start. In addition, in order to promote the cooperation in trade and investment between China and Latin America, China respectively set up a Renminbi settlement centers in Chile and Argentina.

China and Latin America are highly complementary in terms of economy, and have broad prospects of economic and trade cooperation. Under the new situation, the economic and trade cooperation between China and Latin America is facing new development opportunities.


Transnlated by Wang Baihua
Proofread by Eddiea

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