As the world’s leaders headed to World Economic Forum’s annual meeting in Davos, China and Latin American foreign ministers held their own reunion in Santiago. On January 22, China and the Community of Latin American and Caribbean States (CELAC) met for the second ministerial forum in the Chilean capital. There, the Chinese Foreign Minister Wang Yi all but invited the 33 member countries of CELAC to become part of China’s “Belt and Road” initiative, previously termed “One Belt, One Road.”
While only Panama has formally signed onto it, Yi said the region overall is a “natural expansion” of China’s massive infrastructure development plans linking Eurasia. Beijing’s tentacles in the region already have significant size and scope, representing $200 billion in annual trade, and tallying $260 billion in loans and foreign direct investment (FDI) to the region since the beginning of the century. “Obviously, the infrastructure gap is something that Latin America has to seal in order to do the jump from middle income to high income economies with more inclusion,” Ángel Melguizo, the head of the OECD’s Latin America and the Caribbean unit told AS/COA Online’s Elizabeth Gonzalez in a podcast interview.
"'Belt and Road' is the biggest global value chain that is going to be happening among emerging economies in the next few years."
Latin America’s northern neighbor, however, doesn’t like the prospect of deeper Sino-Latino ties. Before kicking off his tour to 5 countries across the region from February 1 to February 7, U.S. Secretary of State Rex Tillerson expressed his concern that Latin America might be “trading short-term gains for long-term dependency” with China. But Melguizo says the relationship can be a win-win if Latin America takes a proactive stance in engaging and funneling investment to the right sectors, meaning not just primary resources. One way to achieve that is to set standards and shape policies as a coordinated bloc of countries rather than on a bilateraly basis. “In that sense, we agree with the secretary of state," says Melguizo. “It’s not up to China to respond to all of Latin America’s demands, wishes, and needs.”
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- Listen: LatAm in Focus with Melguizo – In Latin America, the New China Is Here to Stay
The songs "La cazadora" and "Niño perdido" heard in this podcast episode were performed by Tonolec at Americas Society in New York. Find out about upcoming concerts at Music of the Americas.