Financial experts discussed remarks by Argentine Ambassador to China Diego Ramiro Guelar, who said recently that talks about a possible free-trade deal between China and South America’s major economies could start as early as next year.
Following the Summit of the Americas held in Lima, Peru, earlier in April, the ambassador said that China’s investments were essential for Argentina, which is struggling to reform its isolated economy and regain access to the international capital market.
“China is as important as the US and sometimes it is more important than the US,” Guelar told the South China Morning Post, adding that “the Americans might be worried because they used to think that they would be hegemonic in the region.”
Financial experts said that while the Latin American Market apparently seeks to strengthen economic ties with China and it is very likely that the free-trade deal will be reached, the US will certainly hinder the negotiations, pile political pressure on certain countries and try to unravel regional organizations.
Bian Yongzu, a researcher with the Chongyang Institute for Financial Studies at the People’s University of China, said that the beginning of free trade zone negotiations between China, Argentina and other South American states has been greatly anticipated.
“In recent years, trade and economic cooperation between [these parties] has been tightening. The project is predetermined by the structure and interrelatedness of the region’s economic paradigms,” the expert said.
He explained that China, for instance, has invested in the extraction of mineral resources, infrastructure and agriculture of South America. In its turn, South America exports minerals and agricultural products to China; and the volume of trade between the regions has been consistently growing.
“On the other hand, South America has traditionally been the United States’ backyard. [The US] interferes in South America’s politics and economy, sanctioning some of the region’s states at every given opportunity,” Bian said. “Meanwhile, China’s economic clout in the world has been growing, which allows South American nations to consider other ways of cooperation on development.”
“All indications are that China’s development provides South America with a chance to solidify its positions in dialogue with the US. It is safe to say that negotiations between China and South America on a free-trade zone are exigencies of modern times,” the expert said.
Bian cautioned that the US may still try to slow the process down with a demonstration of power, but in the end it cannot do anything to stop the growing trend away from American dominance of the region, given the numerous and growing alternatives.
Alexander Kharlamenko, an expert from Russia’s Institute of Latin America, said that China has long and successfully been developing relations with Cuba, Venezuela and some of the other countries in the region, and these countries will have to deal with political blows aimed at disrupting the unity of Latin America.
The expert suggested that the US will likely continue to pressure some of the region’s right-wing governments, seeking to undermine the system of regional organizations, including MERCOSUR [Southern Common Market].
“China will counter with its economic power,” the expert said. “It obviously seeks to avoid an open politicization of relations with countries in this region, securing normal relations and economic cooperation even amid regime changes.”
“China will rely upon its traditional flexibility, the policy of non-interference in internal affairs, supporting the independence of states in the region. That is a traditional Chinese policy to counter hegemonism,” Kharlamenko concluded.