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Bogota 2015 Blog: China Eyes Infrastructure Investments in Colombia

The Pacific port of Buenaventura. (Image: European Commission)

Tuesday, June 9, 2015

Chinese Premier Li Keqiang landed in Colombia on May 21, the second stop on his four-country tour in Latin America last month. The trip’s focus was transportation and large-scale infrastructure projects to facilitate Asian-Latin American trade. And while the announcement of a $50 billion investment in Brazil dominated headlines, Colombia also stands to draw Chinese cash.

President Juan Manuel Santos made a point to improve Colombia’s infrastructure during his first administration (2010–2014), which spent record amounts on transportation. “We multiplied our investment budget for the transportation sector by four,” said Santos in May at the inauguration of a bypass in the Cesar department. He pointed out that transportation spending now averages around $3.1 million a year. The flagship project Autopistas de Cuarta Generación, better known as the 4G plan, has set out to modernize the country’s road system to foster growth and development in more isolated areas of the country. It is expected to cost approximately $18 billion in total. “It is very important to bring investors from the outside because of the magnitude of the program,” said Luis Fernando Andrade, the president of Colombia’s National Infrastructure Agency, in an interview with The Prospect Group. “We don’t have enough equity in Colombia to finance these projects.” Cue China’s entrance as an investment partner and driver.

As of the May meeting, China has set its eyes on a pair of infrastructure projects meant to capitalize on Colombia’s farming and industrial potential: an industrial park for the central Pacific port of Buenaventura, and the construction of a road that permits the development of the Orinoquia region in the east.

Bilateral trade between the Asian giant and Colombia stands at about $15.6 billion, making China Colombia’s second-largest trading partner after the United States. And while the two countries are just now broaching the idea of a potential free-trade agreement, China has already committed some $3 billion to create an industrial complex of about 2,500 acres in Buenaventura. The city hosts the country’s largest Pacific port, through which half of Colombia’s trade passes. As such, Pacific Alliance enthusiasts consider the port the country’s gateway to Asia. The project will create 45,000 much-needed jobs, says the port’s Chamber of Commerce President Alexander Micolta, in the city, which has an unemployment rate roughly four times the national average, and could turn around the city’s violent trajectory. According to Human Rights Watch, criminal violence in Buenaventura has generated the largest internal displacement rates in the country, though this year the port city already saw a marked decrease in homicides.

Another one of China’s investment projects in the country includes a road that would connect Orinoquia in the east to the Pacific coast, while exploring new farming opportunities in the largely rural, savanna-covered area. The project also aims to make the Meta River—along which the road will run—navigable so as to spur agricultural development. Cooperation on the agricultural front offers potential, said Santos after the Chinese premier’s visit: “Colombia has millions of hectares left to cultivate, and China needs food.”