Economic Aspects Crucial to Sustaining South America-China Relations


Over the past two decades, China has managed to make its way into South America through trade and investments in natural resources, transport infrastructure, and low-cost manufactured commodities. Amid the cold war between Washington and Beijing over the origin of the COVID-19 pandemic, China is attempting to bolster its position and influence in the Latin American region.

During the global health emergency, China and South America came further close with Beijing sending medical equipment, PPE kits, and ventilators to the various countries of the region. From Argentina to Mexico, governments across South America went onto praise China for its medical goodwill and efforts in maintaining stronger ties with the region.

With its initiatives over the period of time, China has become the second-largest trading partner in the South American regions for major economies such as Chile, Brazil, and Peru. As many as 19 nations in the region have signed in on the Chinese government’s Belt and Road Initiative since 2013. There over 40 Confucius Institute programs have been launched by China across Latin American and Caribbean nations in the past few years. Evidently, with the US alienating Latin America, China is stepping up its game in the region to fill the void caused by Trump’s ignorance. It is important to note that South American countries have been benefitting from China’s growing interests in the region in terms of growing infrastructural development.

However, there is fear in the world order over the increasing dependency of the South American economy on China, particularly amidst the Coronavirus pandemic. According to the United Nations, Latin American GDP will contract by 5.3% in 2020 due to the economic fallout triggered by the pandemic lockdown. In the wake of the crises, the region’s exports to China are estimated to fall by 10.7% this year which will severely disrupt the various factors of South American economic growth including production and foreign investment. It is ascertained that China will be extending certain concessional loans to the region to support it during ongoing difficult circumstances. Experts have asserted that it is important for Beijing to diversify its investment in South American countries to maintain its economic relationship with the region.

Notably, economic interests and international relations go hand-in-hand. When it comes to ties between China and South America, the two regions have potential resources to provide each other. When China has labour and capital, South America has a stack of natural resources and land. While the aftereffects of the pandemic can pose potential threats to the China-South America correlation in the short-term, it is up to the leaders of the two regions to rebound from the uncertainties in the long-run.

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