By Robert Lee, Partner and Gerardo Rodriguez-Albizu, Associate Attorney Diaz Reus
Driven by demand for the commodities needed to fuel its fast-growing economy, China has successfully built strong commercial and investment relationships with Latin America over the last decade.
Despite the global economic downturn, China continues to invest billions of dollars in Latin America through investments, loans, acquisitions and currency swaps. These ever-growing ties between China and Latin America are likely to have significant consequences for the entire global economy.
China’s objective is to maintain its economic growth while conserving energy and natural resources. China currently relies on imports for 50% of its 7.6 million barrels a day of oil consumption. As a result, China is looking to Latin America to supplement its supplies from the Middle East, Africa and Asia.
From Financial Times:
For most of its history, Latin America has looked east across the Atlantic to Europe. Today, however, it increasingly looks west across the Pacific to Asia – especially when it comes to trade.
China – hungry for the commodities that South America produces, be it Brazilian iron ore, Chilean copper, or Argentine soya – had by 2009 become Brazil and Chile’s biggest single trading partner, according to data from the Inter-American Development Bank. It had also become Peru’s second biggest trade partner and Argentina’s third largest. The impact of this profound shift in trade patterns can be felt throughout the region.
China’s foreign policy towards Latin America is focused on the acquisition on natural resources that can support the nation’s economy for years to come. Today, most Latin American countries are willing to cooperate with China. Successes, such as the China-Venezuela relationship, have clearly demonstrated teh benefits derived by both nations in fostering a relationship based on mutual respect and cooperation. It is an important shift for China, Latin America and the world.
Download the complete article written by Diaz Reus attorneys, Robert Lee and Gerardo Rodriguez-Albizu here…