China forges deeper ties with Latin America amid trade war with U.S.
Updated 14:54, 10-Oct-2019
Franc Contreras

At a time when the trade war between Beijing and Washington is rippling across the world economy, China has been working to strengthen its economic ties with Latin America. 

For decades, Sergio Ley, Mexico's former ambassador to China, has watched the relationship between Mexico and China grow. For him, it is deeply personal. His father was a Chinese immigrant, who became a distinguished business leader in Mexico. 

In the mid-1980s, Sergio Ley began his diplomatic career as a cultural attaché at the Mexican embassy in Beijing. Later, he was Mexico's first consul general in Shanghai. And then he became Mexico's ambassador to China. 

In his Mexico City home, he proudly displays a Chinese painting of Beijing, which reminds him that personal contact produces deeper understanding.

A view of Mexico City, Mexico. /VCG Photo

A view of Mexico City, Mexico. /VCG Photo

Ley said, "One of the key and important programs at that time, one that I am very proud of, were student exchanges. They produced many fruits. In fact, 30 Chinese student diplomats came to Mexico."

"Unfortunately, the program only lasted until 1985, one year after I arrived in China. The program was suspended because of recurring economic and financial crisis that we had back in those days," he added.

Despite plans to create people-to-people exchange programs, commercial trade has been the driving force behind relations among Latin American nations and China.

Analysts say Mexico and China benefited from the North American Free Trade Agreement, even though China was not part of NAFTA. Beijing began investing in Mexican assembly factories. Those factories shipped Chinese goods across the border to the United States. 

VCG Photo

VCG Photo

However, in recent years, some of China's investments in Mexico and other parts of Latin America have been derailed. In 2014, Mexico's government cancelled a 3.75-billion-U.S.-dollar contract with a Chinese-led construction consortium to build a high-speed train.   

China made up for that loss by signing a deal with Argentina to build the 2.1-billion-U.S.-dollar Belgrano rail network, along with hydroelectric dam projects worth more than four billion dollars.  

China has reached out to other Latin American nations – including Bolivia, a member of the Belt and Road Initiative. As of 2017, Bolivia got more than 20 percent of its imports from China. 

Peru is also expecting Chinese investments worth up to 10 billion U.S. dollars over the next three years – mainly in the energy and mining sectors.  

VCG Photo

VCG Photo

For its part, the Mexican government is taking steps to create a stronger relationship with China. Mexico's Foreign Secretary Marcelo Ebrard has made two visits to China this year. 

"China is our second largest trade partner and the third largest destination for Mexican exports. Both governments recognize there is still enormous potential to be exploited," Ebrard said during his most recent visit to China.

Experts insist -- for a relationship to thrive between China and Latin America, it also requires efforts to understand each other – at a cultural level.

"Today, we need a far deeper understanding of the high complexity of the relationship of China with the Latin American region and each of the countries including Mexico," said Professor Enrique Dussel Peters, a leading expert on China's relations with Latin America. 

According to Dussel, increasing people-to-people contact will eventually help override the political barriers – and improve relations between China and Latin America.