Ten Suggestions for China and Europe to Develope Their Relations with Latin America

Presentation at the Seminar
“New Grounds for the Relations between the EU, Latin America and the Caribbean – Towards a Relevant Partnership”

Organized by
EU-LAC Foundation and the German Institute of Global and Area Studies
17th and 18th September, 2012, Hamburg, Germany

Thank you very much. First of all, I would like to express my thanks to the conference organizers.  It seems to me that I am the only one from a third Continent. So I am going to say a few words about how China and the EU can cooperate to have better relations with South America, Central America and the Caribbean.

Well, as you know, in the past decade China’s relationship with the Latin America has been developing very quickly in political, economic, diplomatic, cultural and even military areas, practically in any field. At the same time, we can also see that the EU has been trying to promote a stronger partnership with Latin America.

My view is that China emphasizes economic relationship with Latin America whereas the EU is not only interested in economic, trading, and investment, but also in promoting democratic governance, strengthening security, improving conflict prevention and etcetera, etc. Therefore, it seems there is an evident difference there.

Unlike the US, Europe seems not to be afraid of China’s presence in Latin America. That’s a welcome attitude. Now, we need to ask the following questions: Does China need the European “bridge” to go to Latin America? And, does Europe need China to further promote its relationship with Latin America? My answer is “yes” for both questions.

Some years ago I talked to a Chinese ambassador to a South American country. I asked him what he thought about our books, papers and articles. He said: “Well, the books, papers and articles by scholars are good, but they are too theoretical and sometimes too empty.  Therefore, we do not pay much attention to them.” So here I would like to make ten very practical suggestions for China and the EU to further develop their relations with Latin America:

First, let’s include the triple partnership or triangulation into the annual China-EU Summit.  The 15th China-EU summit will take place very soon, so we could ask the leaders from both sides to include this kind of topic into the summit.

Second, can we set up a China–EU fund to promote Chinese and European investment in the region?  This effort, if realized, will make it easier for both European and Chinese firms to expand their presence and operations in Latin America.

Third, let’s make more joint ventures like the Sinopec-Repsol, a deal in Brazil. As far as I know, it is the largest private energy group in the region, almost eighteen billion dollars.

Fourth, can China be invited to become an associate member or an observer at the EU-LAC Summit and/or the Ibero-American Summit, so that China can have a better understanding of what is going on there between Europe and Latin America.

Fifth, let’s bring China and Europe into their business summits with the region. So far we have seen five China-Latin American Summits, and the next one will take place probably next month or so. It’s necessary to have the European business community at the summit.  At the same time, China can also be invited to go to the Europe-Latin American Summit. Needless to say, a triple understanding is certainly very helpful for business relations among the three parties.

Sixth, can we strengthen our cooperation in the Inter-American Development Bank (IDB) and other multilateral institutions. China joined the IDB in early 2009 and many European countries are also members of the IDB. So we can cooperate with IDB and other multilateral institutions in this regard. As you know, the IDB is a very important player in Latin America.

Seventh, let’s make good use of Macao’s position as a platform for China-Portuguese speaking nations. The Secretariat of the Forum for Economic and Trade Cooperation between China and Portuguese-Speaking Countries is located in Macao. The Forum is a good connection between China and all the eight Portuguese-speaking nation except for Sao Tome and Principe, which has diplomatic relationship with Taiwan. China and Portugal (and other EU members) can join hands at this forum.

Eight, Build more “bridges” like the Spanish law firm Uría Menéndez so that Chinese and European traders and  investors can go to Latin America more easily. As far as I know, many Chinese investors want to invest in Latin America, but they do not know anything about Latin America’s market conditions or the so-called investment environment.  They cannot have access to information about investment opportunities there. So bridges like Uría Menéndez might play an important role.

Nine, let’s diffuse the mentality of China-threat or “fear of China” by the American, European and Latin American media, politicians, etc. Of course I know that this is not a very easy job but we have to understand that this mentality is harmful to China. As I mentioned just now, China’s relationship with Latin America has been developing very quickly, but the nature of this relationship is South-South cooperation. It promotes development for the benefits of both sides, and China’s presence in Latin America poses no danger to the US and/nor to Europe. It contributes to world peace and development. So let’s do away with the mentality of China-threat or “fear of China”.

And last but not least, let’s strengthen trilateral understanding of each other in every aspect. In order to promote the triangulation of China, Europe and Latin America, we need to have a better understanding of each other. Otherwise, as one panellist mentioned before, husband and wife will not talk to each other but shout to each other. Better understanding is very, very important, and I think that think-tanks like GIGA and the Chinese Academy of Social Sciences should do something about this kind of thing.

Finally, we have the following questions: First, will triangulation increase transaction costs? I would say probably “yes” in some cases, but in other cases I think that it will cut transaction costs.  So we need to pay attention to this point. Second, should the triangulation mean that all the three parties, i.e., China, Europe and Latin America, work together, or just China and Europe join their two hands?

Well, in the first stage, it is likely that there will be only China and Europe working together to further develop their relationship with the Latin America. But in the second stage, I hope that all the three parties, i.e., China, Europe and Latin America, can cooperate more in every aspect. For instance, the EU and Latin America can also join hands to have better relationships with China. Therefore, it should be a kind of a three-way street.

Thank you very much.

（Contact Jiang Shixue: jiangsx@cass.org.cn）