China’s President Xi Jinping is about to embark on an ambitious Latin American tour: From July 15 to July 23, the Chinese leader will attend a BRICS summit in Brazil, and then travel to Argentina, Cuba, and Venezuela.
The BRICS summit will likely receive the most news coverage, but the Chinese leader may accomplish more during his visits to the other Western Hemisphere nations.
China’s trade with Argentina
President Xi Jinping will arrive in Argentina nextFriday, July 18. Since China and Argentina first established relations in 1972, commerce has been an important cornerstone in their relationship. For example, the Sino-Argentine Chamber of Commerce hosted a symposium on May 26 to discuss economic cooperation between Argentina and the Chinese city of Shenyang.
As for trade, a July 1 press release by the Argentine government states that China was a major importer of Argentine goods over the past trimester. During this period, China imported 7.8 percent of Argentine goods, and became Argentina’s second trading partner (Brazil was first with 20.6 percent of imports).
China is also interested in strengthening energy ties with Argentina.
For example, the China National Offshore Oil Corporation bought shares of the Argentine energy firm Bridas in 2010. It seems that China plans to use this company as a proxy to begin drilling in the Vaca Muerta oil field in the near future.
Finally, Beijing-Buenos Aires relations received a diplomatic boost during theG77+China summitin Bolivia this June. During the meeting, the representatives of the participating nations, including China, declared their support for Argentina over the infamous “vulture funds.”
China’s ties with Venezuela
Relations between Venezuela and China greatly improved during the presidency of the late Hugo Chávez, and it seems that Nicolas Maduro––Venezuela’s current president––is following in his mentor’s footsteps. The strengthening relations between the two nations are best demonstrated by Maduro’s trip to Beijing in September 2013, and ChineseForeign Affairs Minister Wang Yi’s visit to Caracas this past April.
Today, Venezuela is China’s fourth largest trading partner in Latin America, and China is Venezuela’s second largest trading partner. The Chinese People Daily explains that bilateral commerce reached $19 million USD in 2013.
However, the relationship between these two countries goes beyond trade. As BBC explains, China has continued to heavily invest in Venezuela. Two major Chinese oil companies, China National Petroleum Corporation and China Petroleum & Chemical Corporation have invested in the South American country’s oil industry.
Additionally, China is attempting to profit from the billions of dollars that Venezuela spends on its armed forces. This past April, there were reports that Caracas had finally agreed to purchase the L-15 Falcon, a military aircraft manufactured by China.
China’s trade with Cuba
China and Cuba have generally had good relations since 1960, when they first established diplomatic ties.
Most recently, Cuban Foreign Affairs Minister Bruno Rodriguez Parrilla traveled to Beijing to meet with President Xi Jinping in November 2013. To return the favor, Minister Wan Yivisited Cuba this past April. Additionally, a Chinese military delegation, led by a colonel of the People’s Army, also visited the Caribbean island in May. They met with senior Cuban officials, including Raúl Castro.
In recent years, the Cuban government has worked to attract international investment. One big example of Havana’s success is that Brazil is financing the upgrading of the port ofMariel. However, Cuba desires Chinese investment as well.
In September 2013, the Cuban Ministry of International Commerce provided information to Chinese companies about a 295 square mile sector around the Mariel port, where Havana wants to develop an industrial sector.
More recently, in April the Cuban embassy in Beijing organized a conference for Chinese industrialists, once again to promote development in Mariel. According to Cubadebate.cu, a pro-Cuban government news agency, representatives from companies such as the China National Huachen Energy Group have expressed interest in investing.
Chances of Success
The future of commercial relations between China and Latin America will not be solely determined by bilateral initiatives. In the past months, media reports have discussed whetherMERCOSUR, of which Argentina and Venezuela are members, could begin negotiations for a free trade agreement with China. (Though speculation regarding this deal dates back to 2012). Without a doubt, Buenos Aires and Caracas would greatly benefit from exporting more to China, but negotiations have yet to begin.
As for Cuba, the Chinese government certainly approves that Havana has been a thorn in Washington’s side for decades. However, in spite of ideological similarities, trade between the two countries remains unimpressive. This would change if Chinese and Cuban leaders agree on some kind of development project for Mariel, as Havana desires.
Chinese President Xi Jinping’s visit to Latin America comes at a time when the region’s nations are looking for more commercial partners in the Asia Pacific region. As we have discussed, each nation has different interests, from Cuba’s development of Mariel to Venezuelan and Argentine oil.
Given the positive reception that awaits President Xi Jinping during his upcoming Latin American tour, it is likely that the Chinese leader will return home with several beneficial commercial accords in his briefcase.