Toward more resilient and reliable partnership

President Xi Jinping and guests attend a photo session during the opening ceremony of the first Ministerial Meeting between China and the Community of Latin American and Caribbean States. FENG YONGBIN / CHINA DAILY

President Xi Jinping is visiting Latin America for the third time since 2013. The frequency of his high-level visits to the region reflects the priority China gives Latin America in its diplomatic agenda. And that Ecuador, Peru and Chile are the three countries Xi is visiting this time indicates China's continued efforts to diversify its economic exchanges with the region.

Against the background of Donald Trump's election as the president of the United States and the uncertainty it has created for the open, but changing, world order, Xi's visit proves China's commitment to globalization. Its recent international initiatives, such as the establishment of the Asian Infrastructure Investment Bank and BRICS New Development Bank attest to its effort at global integration. Latin America is not behind in that effort.

China has announced the establishment of a settlement bank in renminbi in Chile, the first in the region, to promote the use of its currency. This should assure the region's countries of China's increasing terms of engagement with the world.

China's transformation toward an innovation－and consumption-led economy offers many opportunities. Its economic slowdown, inherent in that restructuring process, is already affecting Latin America. While two-way trade grew in double digits for years, in 2014 the region's exports to China fell for the first time this century－down 10 percent－reflecting its declining appetite for the region's raw materials.

Latin America's export basket to China is not very sophisticated. In 2013, for example, commodities represented 73 percent of the region's exports to China, compared with 41 percent for the rest of the world.

However, the changing dynamics in China are pushing Chinese outward foreign direct investment to record levels and encouraging its companies to transfer their industrial operations abroad. Since China is already a capital exporting country, its "new normal" could reverse the inter-industry flows that have prevailed with Latin America. Doing so implies strengthening their trade and investment linkages by furthering the integration of their value chains.