ECLAC underscores importance of strengthening ties between China, Caribbean

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ECLAC underscores importance of strengthening ties between China, Caribbean

Tuesday, January 23, 2018

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SANTIAGO, Chile (CMC) — The executive secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, has underscored the need to strength ties between the region and China.

Addressing the Second Ministerial Meeting of the Community of Latin America and Caribbean States (CELAC) and China here, Bárcena said China seeks economic growth, “centered on shared prosperity;” the combatting of poverty and inequality; the protection of the environment; and the principles held in the 2030 United Nations Agenda for Sustainable Development.

The meeting is being attended by representatives from 31 countries including the Caribbean and Bárcena took the opportunity Monday to present the document, “Exploring new forms of cooperation between China and Latin America and the Caribbean,” in which ECLAC analyses the joint journey since the first meeting of the China-CELAC Forum held in 2015 in Beijing.

The report also gives a comparative assessment of macroeconomic, environmental, infrastructure, science and technology, and social development policies.

The ECLAC senior representative noted that the Cooperation Plan (2015-2019) was adopted during the first meeting of the China-CELAC Forum, setting the goal of achieving trade of US$500 billion by 2025.

“According to our estimates, trade between the region and China multiplied 22 times between 2000 and 2013, and in 2017 reached US$266 billion. This means progress of 53 percent toward the goal with seven years to reach it,” Bárcena said.

She added that the second goal for 2025 is to achieve foreign direct investment stock between both parties of US$250 billion.

She said that, as of 2017, Chinese direct investment stock in the region reached around US$115 billion, representing 46 percent progress toward that goal.

The ECLAC official said that, in the financial arena, China has provided financing over the past decade for a total in excess of US$141 billion, “an amount surpassing that received through institutions such as the IDB (Inter-American Development Bank) or the World Bank.”

However, on trade, Bárcena said the diversification of the export basket to China continues to be “a pending assignment for the region.

“We exported only five basic products in 2017 – soybeans, iron ore, copper ore, refined copper and oil – making up 70 per cent of the total value of shipments,” she said, adding that direct foreign investment from China also shows “a strong degree of concentration, both in terms of sectors,” with mining and fossil fuels representing at around 80 percent.

Bárcena said this reinforces the pattern of exchange of raw materials for manufactured goods “that has characterized trade between the region and China.

“The good news is that foreign direct investment from China to the region increased in 2017, surpassing US$25 billion, and began to diversify toward new sectors such as food, telecommunications and renewable energies.”

Bárcena stressed the importance of the “Belt and Road” initiative for Latin America and the Caribbean, in the first place, “because, in spurring the economies of Asia and Europe, it will increase aggregate demand; and, consequently, exports from the region will benefit.”

She added that the Chinese initiative “offers us a unique opportunity to shorten the great territorial distance that separates us through better air, maritime and especially digital connectivity, to tighten our trade, investment, tourism and cultural ties.”

ECLAC's Executive Secretary said China has become a leader of the digital economy and in innovation, with investments surpassing two per cent of gross national product (GNP) in research and development, especially in applied research, “which has allowed it to move rapidly toward production and export of highly knowledge-intensive goods and services.”

She called on the region to diversify its trade and foreign investment flows with China; to take advantage of China's technical and financial skills “to reduce the serious infrastructure debt in our region;” and to cooperate on social issues “to eliminate poverty in all its forms by 2030.”

Additionally, Bárcena urged China to support the countries of the Caribbean to obtain concessional loans in order to restructure their high debt.

“Today, as China positions itself for a new era, a strategic association of mutual trust is necessary to build an ecological civilization and together make the goals of the 2030 Agenda for Sustainable Development a reality,” she said.

ECLAC said the purpose of the China-CELAC Forum is to promote the development of the Comprehensive Cooperative Partnership between China and Latin America and the Caribbean, “characterised by equality, mutual benefit and shared development.”

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