China presses on with business in Latin America

Updated: 2014-10-24 10:06

By Hua Shengdun in Washington(China Daily USA)

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China presses on with business in Latin America

Evan Ellis, associate professor of Latin American studies at the US Army War College Strategic Studies Institute, discussed his new book China on the Ground in Latin America on Wednesday at the Center for Strategic and International Studies in Washington. Sheng Yang / for China Daily

China has challenges doing business in Latin America but will carry on, said the author of a new book on the subject.

"Challenges came from various aspects, such as relationships with the local labor force and subcontractors, resistance from environmentalists and security concerns," said Evan Ellis, a research professor of Latin American studies at the US Army War College Strategic Studies Institute in Carlisle, Pennsylvania. Ellis is the author of China on the Ground in Latin America.

Ellis said the challenges seem similar to those faced by other foreign companies, but they "became more serious when compounded by differences in language and culture". Still, Ellis said he expects China's commercial endeavors in the region to continue to grow.

With trade rising from $50 billion in 2005 to more than $260 billion in 2013, China is expected to become Latin America's second-largest trading partner in two years and tops in 13 years, according to a Forbes report.

"The success of the Chinese economy in recent years is a big motivation for the interaction," Ellis said."The new physical presence of Chinese companies has introduced an important new political and social dynamic in the region."

Chinese President Xi Jinping visited Argentina, Brazil, Venezuela and Cuba in July.

Latin Americannations also are seeking joint ventures with China as bilateral relations have become increasingly vital to the region, said Carl Meacham, director of the Americas Program at the Center for Strategic and International Studies.

If Chinese companies hire more local people and help improve local conditions, bilateral cooperation will grow, Meacham said.

China's increasing engagement in the region has raised political concerns both in Latin America and the US.

"The competition from Chinese products and attempts by Chinese companies to win projects began to become part of the political struggles in individual Latin America countries," Ellis said.

Many Chinese companies, such as Huawei, ZTE and China Harbor, already have a strong presence in Latin America. As these companies became more effective as local players, they will play more of a role in politics, Ellis said.

"The availability of China as an alternative source of financing, investment, and purchasing Latin American exports will tend to decrease US influence," Ellis said. "Thus, China in Latin America will be a more important issue during the 2016 [US] presidential elections."

Sheng Yang contributed to this story.