China and Latin America: The next stage (Luis Alberto Moreno (Chairman of the Inter-American Development Bank)

China and Latin America: The next stage
http://gestion.pe/impresa/noticia/china-america-latina-proxima-etapa/2010-10-28/24566
Luis Alberto Moreno (*) Chairman of the Inter-American Development Bank.

These days, the headlines about the relationship between China and Latin America are focused on exchange rate disputes. In the short term, this is a legitimate and necessary debate, but we must not lose sight of the transformative potential of greater integration between our region and the Asian giant. To deepen our ties, both China and Latin America will be consolidated as two engines of growth, contributing to a global economic recovery, especially after the global financial crisis. The statistics are overwhelming: China generated more than half of global growth over the past three years and is projected to grow by an impressive 10.5% in 2010. Latin America will grow about 5.7% this year, more than twice the rate estimated for the United States and European triple. This is not a coincidence. Each in his own way, China and Latin America have staged major changes in the last 20 years. Opened their borders to trade and investment, becoming vital members of the global economic system. This was a historic expansion of production that has lifted tens of millions of people out of poverty. Today the combined economic output of Latin America (about U.S. $ 2.6 billion in 2009) is comparable to China's gross domestic product of U.S. $ 2.7 billion. In just one decade, two economies that had little contact they have become great partners: trade between China and Latin America rose from just U.S. $ 10.000 billion in 2000 to over U.S. $ 100.000 million today. Last year, China became the largest importer of Brazilian products. And China is already the main trading partner of Chile, Peru and Argentina. Increased Chinese demand for American exports was instrumental in the revival of many of our economies during the crisis, and helped to consolidate a recovery based on a decade of reform and sound fiscal and monetary policies. This relationship is in its infancy, but we are entering a new phase of cooperation and generate wealth can improve the quality of life of our peoples. To do so, both China and Latin America must address several strategic challenges. One of them is energy. Many countries in our region share an interest in China to reduce dependence on hydrocarbons. China has become a leader in wind and solar power and efficient lighting. Latin America, which gets most of its electricity from renewable sources has enormous growth potential in this field. Another shared challenge is to clean transport. Our region has at least 50 cities with over 1 million inhabitants, China has at least 170. Mobility and air pollution are problems for all of these emerging cities. Latin America is a leader in bus rapid transit with millions of vehicles powered by biofuels or natural gas. China is becoming a world leader in high-speed trains, intelligent traffic control and electric vehicles. Opportunities for productive collaboration are clear. Water and sanitation are also a common problem. Both China and several countries in our region are facing water shortages, the need to purify polluted rivers and protect the aquifer. Several operators of services in Mexico and China have improved systems for recycling and reuse wastewater. Companies that offer solutions in this sector have excellent growth prospects. To promote such cooperation, it has recently conducted a business summit China-Latin America in Chengdu, a major Chinese industrial centers. Participated in the event nearly a thousand employers in our region and Asia, evidence of interest in strengthening ties between the two sides of the Pacific Ocean. This approach is not by chance: China entered the country last year as a member of the IDB. Since then we have entered into numerous cooperation agreements with Chinese entities, including some of its major banks. We are ready to work with our partners to generate new opportunities for prosperity and dignity for our peoples. (*): Chairman of the Inter-American Development Bank.