China values geopolitical importance of Latin American and Caribbean nations and wants all-round cooperation with them

  President Xi Jinping's second visit to Latin America - Brazil, Argentina, Venezuela and Cuba - from July 17 to 23, is a milestone in Sino-Latin American relationship. Xi's first trip to the region came within three months of taking office last year during which he visited Trinidad and Tobago, Costa Rica and Mexico.

  The highlight of Xi's second visit to the region is his meeting with leaders of Latin American and Caribbean countries in Brazil, demonstrating the increasing political will of China and the region's countries to deepen cooperation on all fronts and resolve important issues.

  Trade between China and Latin America has increased rapidly - from $14.9 billion in 2001 to $261.6 billion in 2013, or 17 times in the past 12 years. China has become the second-largest trading partner of Latin America and Chinese investments in the region have grown at a fast pace; the region is second only to Asia in total direct Chinese investment. But the deepening trade partnership between China and Latin America has also thrown up some challenges such as China's asymmetric aid to Latin America and imports from the region.

  Economic cooperation between the two sides is seemingly focused on a limited number of products and concentrated in certain countries of the region. For instance, two-way trade is mainly in resource-related products and manufactured goods, rather than technology or services, and involves Latin American countries that are rich in natural resources, such as Brazil. Also, most of the Chinese investors prefer providing financial aid to mineral-rich countries in the region.

  Moreover, Sino-Latin American economic and trade cooperation has reached an inflection point. Therefore, China has to extend its market to more countries in Central America and the Caribbean, giving priority to the promotion of its technology and services. And to ensure that its overseas investments yield win-win results, China could use its expertise in generating wind power to broaden its foreign-investment horizon and help more Latin American countries in infrastructure construction and to achieve optimum benefits from their industrial structures.

  Economic and trade exchange, a major driver of Sino-Latin American cooperation, can be boosted only if governments on both sides establish a sound consultation and dialogue mechanism. The Community of Latin American and Caribbean States, founded by 33 countries in the region in 2011, has a taken a big step in that direction by announcing the establishment of a Sino-LACS forum at its second summit in Cuba earlier this year.

  The forum is aimed at not only developing more balanced relations between the two sides, but also advancing a fairer international order. Latin America, home to a number of emerging economies, is keener than ever to participate in global governance. So, one can safely say that Latin American states and China will deepen their coordination and cooperation to safeguard the interests of developing countries.

  The four countries Xi visited are major players in Latin America that will work with China to protect developing countries' interests and have different strategic significance for China's diplomacy. Brazil is a pillar of economic growth in South America. It is the seventh-largest economy in the world and a crucial member of BRICS. To further boost the already booming China-Brazil trade, Xi signed a wide range of economic agreements with Brazilian President Dilma Rousseff.

  Argentina and oil-rich Venezuela, the other two big powers in the region, and China are deeply interdependent in trade. Cuba is the first Latin American country to establish diplomatic ties with China, and has had a well-developed relationship with China based on mutual political and economic trust since 1960.

  From a geopolitical point of view, China's endeavor to strike a diplomatic balance is noteworthy because the four countries Xi visited this time are in the southern part of the region, while the ones he visited last year were in Central and North America.

  Since China and Latin American countries are emerging powers and developing economies, they can easily enhance strategic agreements and deepen mutual trust because they are eager to see a multipolar world. Unlike the world order promoted by the US, which is marked by cliques and factions, China's Latin American policy accords equal importance to all the countries of the region based on the principle of all-round cooperation, because Beijing wants to establish win-win ties across the Pacific Ocean.

The author is deputy head of the Institution of Latin American Studies, affiliated to the Chinese Academy of Social Sciences.

Originally published in China Daily, Thursday, July 24, 2014