China & LAC: Doing the Math

˙ Asia & Latin America

Numbers have featured prominently in Chinese domestic and foreign policies over the years, from Sun Yat-sen’s Three Principles of the People and the recent Four-Pronged Comprehensive Strategy to the Five Principles of Peaceful Coexistence and Hu Jintao’s six-point proposal on cross-Strait relations.

Recent high-level Chinese to Latin America introduced two new arithmetical schemes– the “1+3+6 cooperation framework” and the “3×3 cooperation model.”

Though rarely referenced in the international media, these policies indicate a subtle shift in Chinese policy toward Latin America.

By the numbers…

The “1+3+6″cooperation framework” was first announced during President Xi Jinping’s trip to Fortaleza, Brazil for the BRICS Summit in 2014.

The “1” here means one plan, referring to the China-CELAC Cooperation Plan (2015-2019), which was made public following the China-CELAC ministerial meeting in Beijing in January 2015.

The “3” refers to the economic “engines” – trade, investment, and financial cooperation – that will drive China’s relations with the region.

And the “6” in this framework refers to the six industries in which China will focus its attention (and money) in the coming years: energy and resources, infrastructure construction, agriculture, manufacturing, scientific and technological innovation, and information technologies.

Premier Li largely upheld this new framework during his trip to Latin America in May 2015. The tens of billions in deals announced during that trip focused overwhelmingly on the “6” industries outlined above.

Premier Li also introduced a new numerical policy – the “3×3” model for Sino-Latin America economic cooperation – during his visit. This policy proposes cooperation between Chinese and Latin American enterprises, societies, and governments (3) in logistics, power generation, and information technology (3). Li simultaneously proposed a $30 billion special fund to develop production capacity in these and other industries.

Doing the math

Though promoting of “much of the same” in terms of economic engagement (Chinese entities are already active in all of the above-mentioned sectors, to varying degrees), these new policy frameworks are intended to communicate China’s commitment to more and increasingly diversified engagement. They promote “systematic upgrading of the relationship,” as Zhu Qingqiao, director general of the LAC division at the Chinese MFA, explained during a recent meeting at the Inter-American Dialogue.

For years now, China has been criticized by governments, the media, and international/regional organizations for its rather singular focus on LAC’s commodities (e.g., minerals, oil, and soy) and for relatively low levels of foreign direct investment in the region.

Chinese officials often justified commodities-focused engagement by pointing out obvious trade complementarities between China and LAC.

But the “1+3+6” and “3×3” frameworks seemingly concede the point that the China-LAC economic ties have been limited in scope. They seek to otherwise define the China-LAC relationship – moving away from a commodities-focused narrative, if not from commodities-based engagement altogether.

As China contends with economic shifts at home, these frameworks also pave the way for China’s top communications, infrastructure, IT, and other high-tech firms to establish new markets, contracts, and partnerships in Latin America – a goal already clearly articulated in China’s recent overseas investment policy.

If it comes to pass, China’s promise of enhanced economic engagement in strategic sectors could mean good things for some LAC nations. Latin American governments would of course be best served by also formulating their own policies – numeric or otherwise – to guide Chinese investment to strategic industries.

Margaret Myers is director of the China and Latin America Program at the Inter-American Dialogue. Follow her on Twitter @MyersMargaret.

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