This year, Venezuela’s valentine was China. On February 14, the Asian giant pledged to invest $2.7 billion across 22 projects in the country. China’s investments and loans in exchange for Venezuelan oil account for one of the growing links with Latin America, where China has been the region’s main lender for at least five years, according to Angel Melguizo. "It’s good news, first because Latin America is a region that saves very little," the head of the Latin American and Caribbean Unit in the OECD’s Development Center tells AS/COA Online’s Elizabeth Gonzalez in this podcast episode. China’s loans have helped stabilize the region’s economic slowdown, a sign that China is here to stay, according to Melguizo.
"This role of Chinese loans stabilizing the region actually shows that China has interests unrelated to the economic cycle."
There’s also room for growth on trade. Even thought Sino-Latin American commerce has multiplied twenty-fold in the last decade, there are markets left to explore. Case in point: Mexico. "The relation between Mexico and China is almost nonexistent," says Melguizo. And the Trump administration’s talk about NAFTA renegotiations could hasten the shift. The new China that Melguizo describes could be more compatible with Mexico. It also spells an opportunity for Latin America's agricultural exporters. China's growing middle class will be consuming more food products, from flowers to fish, according to a 2015 OECD report on China and Latin America.
Ultimately, the winners in the Chinese relationship will depend on Latin American countries. "The ones that are proactive are the ones that are going to win," he says. Working in an integrated way also means the region can help set the standards when it comes to the environment and labor rights. "We cannot complain that China is trying to set the standards if we don’t try," said Melguizo.
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