Page 46 - STRATEGY Magazine (G)

DEEP POCKETS
As Latin America continues its struggle to revive growth, China has emerged as a leading source of much-needed capital in the form of Chi- nese loans to countries in Latin America and the Caribbean.
TOP RECIPIENTS 2005-2014 [in billions]
VENEZUELA $56.3 BRAZIL $22 ARGENTINA $19 ECUADOR $10.8 BAHAMAS $2.9 MEXICO $2.4 PERU $2.3 JAMAICA $1.4 BOLIVIA $0.6 COSTA RICA $0.4
TOP VALUE OF LOANS BY YEAR [in billions]
44 STRATEGY
the parties would be handled consistent with WTO rules and existing agree- ments. Other elements of the trade and investment portion of the plan focus on stimulating investment, encouraging co- operation, and enhancing collaboration.
The China-CELAC Cooperation Plan 2015-2019 also provides the potential for diversifying the market basket of goods currently exported to China through
the establishment of a regional center
for trade and investment facilitation in Beijing. This diversification is important because that market basket is heavily weighted toward raw materials, which contributes to a growing deficit in the trade of manufactured goods. The center will also address other pressing issues, including helping both sides understand and manage cultural differences that impact the trade relationship, providing a forum for brainstorming and repre- senting regional interests to appropriate Chinese authorities, and offering a forum organized to prevent or resolve disputes through negotiation oriented toward
the long range. The center would also conduct other critical but more mundane tasks like market research, collection and dissemination of market intelligence, and the promotion of business opportunities.
Infrastructure & Transportation
The infrastructure and transportation component of the cooperation plan has two main objectives and encompass-
es several specific projects. The first objective is the fostering of cooperation in everything to do with transportation, storage, communication, and other logistical issues—truly an ambitious undertaking. The second is to encourage enterprises from China and countries in CELAC to participate in projects that will enhance the integration of CELAC countries and improve their connectivity to China. There are already advances underway in the infrastructure area, such as the Integration Priority Project Agenda (API), comprising 31 strategic projects representing a total investment of US $21.17 billion. These projects will have a significant impact not only on the region’s physical integration, but also in
socioeconomic development. Regional in scope, they strengthen existing synergies and solve deficiencies that previously existed in the infrastructure.
API gives priority to seven main projects, including a roadway corridor connecting Caracas, Bogota, and Bue- naventura/Quito; northeastern access to the Amazon River; and a bi-oceanic rail- way corridor connecting Brazil’s Atlantic seaport of Paranaguá with the Chilean port of Antofagasta on the Pacific. The other projects also emphasize improv- ing road, rail, or waterway navigation between various important locations in South America.
Energy & Natural Resources
The plan has three major goals with respect to energy and natural resourc- es: enhance technological research and development into the sustainable use of natural resources, strengthen collabo- ration and investment in all aspects of generating electricity, and promote train- ing programs in the development and management of renewable energy. The plan sees several specific areas where these agenda items could be implement- ed, such as the governance of infrastruc- ture and natural resources; the sustain- ability of logistics chains; and studies of the economic, social, and environmental impact of energy megaprojects currently under consideration, using a time frame extending out to the year 2030.
LOOKING AHEAD
The region is faced with a historic op- portunity as a result of China’s interest in establishing stronger links with Latin America and the Caribbean. Produc- tion integration in the region could be promoted as China invests in a broader range of more diversified opportunities, transforming relations among the par- ties. For instance, if China increases its presence in the agro-industry, automo- tive, and electronics sectors, it could not only meet its own needs, but could also coordinate with local suppliers, helping to increase the historically low level of intraregional trade in LAC. It remains the responsibility of Latin America to negotiate agreements that permit it to