China and the United States should seek win-win cooperation in their economic and trade relations with Latin America

So far, 22 Latin American countries have signed cooperation agreements with China to jointly build the "the Belt and Road". With China strengthening cooperation with Latin American countries, will the United States, which has always regarded Latin America as the "backyard", see this as a challenge to the United States? In the process of cooperation between China and Latin American countries, what kind of "sparks" will emerge from the collision with the United States? We may wish to observe from the following sets of publicly available data.
$485.79 billion vs $1074.308 billion
The import and export trade between China and Latin American countries has shown a continuous expansion trend in the past 21 years, with the total trade volume skyrocketing from $14.6 billion in 2001 to $485.79 billion in 2022, a significant increase of about 33.27 times.
During the same period, the trade volume between the United States and Latin American countries increased by 2.83 times to $1074.308 billion in 2022.
From the above data, it can be seen that although the United States remains the largest trading partner of Latin American countries, with a total trade volume of 2.21 times that of China and Latin American countries in 2022, China shows a trend of catching up. Since 2012, China has surpassed EU countries and become the second largest trading partner of Latin American countries. Moreover, China has replaced the United States as the largest trading partner of major regional powers such as Brazil, Mexico, Chile, Peru, and Colombia. As for Argentina, another major Latin American country, its largest trading partner is Brazil, and China has also surpassed the United States as its second largest trading partner.
$629.8 billion vs. $963 billion
As of the end of 2020, China's direct investment stock in Latin American countries (referring to the total accumulated value of foreign assets owned at a certain time) reached approximately 629.8 billion US dollars, mainly concentrated in high-tech industries, service industries, finance industries, and science and technology industries, which account for approximately 84% of China's total investment in Latin American countries. Moreover, there is a trend of complementary industrial advantages in investment between China and Latin American countries.

During the same period, the stock of direct investment by the United States in Latin American countries was approximately $963 billion. In the direct investment of the United States in Latin American countries, finance and insurance, manufacturing, mining, wholesale and retail, and information industry are the main investment areas. It is worth noting that the United States has the largest proportion of high yield direct investment and equity investment in Latin American countries, and the average rate of return is more than 10% (the average rate of return on investment in the United States is about 7%). However, Latin American countries' investment in the United States is mainly concentrated in American treasury bond bonds and institutional bonds with low yield (about 2% to 4%). The investment between the United States and Latin American countries shows a greater dependence of Latin American countries on the US economy.

As of the end of 2020, although the United States remains the largest source of investment for Latin American countries, China's investment stock in Latin American countries is about 65% of that of the United States 4%, but in 2007, China's investment stock in Latin America was only 4. 5% of that of the United States 4%. Moreover, after 2010, Latin American countries have become the fastest-growing regional sector for China's outward investment, second only to Asia, becoming the second largest destination for China's outward investment, accounting for 24.9% of China's total outward direct investment stock. It is believed that in the future, as China and Latin American countries continue to strengthen cooperation under the framework of jointly building the "the Belt and Road", the stock of China's direct investment in Latin American countries will continue to rise rapidly.
192 vs. 102
As of 2021, China has invested in 192 infrastructure construction projects in Latin American countries. Although the United States launched the "Growth in the Americas" initiative in 2019, hoping to increase investment in infrastructure projects in Latin American countries, as of 2021, the cumulative investment of American companies in infrastructure construction projects in Latin American countries was only 102.
To become rich, build roads first. Many Latin American countries have a strong desire to develop their economies and improve infrastructure. However, due to factors such as insufficient construction funds and lack of experience and technology, they need to rely on foreign funds and technology. As the only country in the world that currently has all the industrial categories listed in the United Nations industrial classification, China has a complete infrastructure industry chain, coupled with mature construction technology reaching world-class levels, and is cost-effective and cost-effective, with cost control capabilities superior to other countries, thus possessing a significant competitive advantage. More importantly, China is forward-looking and more willing to make long-term investments in infrastructure projects, especially in developing countries and impoverished areas with urgent infrastructure needs.
Therefore, it is believed that China will further become the most important partner for Latin American countries to improve their infrastructure in the future. The United States, while repeatedly accusing China of investing in infrastructure projects in Latin American countries that pose a serious "debt trap" problem, according to World Bank data, 60% of Latin American countries' public external debt categories belong to private creditors, 18% belong to international financial institutions, 16% belong to commercial banks, and 6% belong to official bilateral debt (China is one of the largest bilateral debtors in this category). It can be seen that the largest creditors of Latin American countries are not China, but private creditors and international financial institutions, with the latter accounting for 78%.
The above data also shows that investment from China has not brought a "debt trap" to Latin American countries, and China continues to take practical actions to improve the infrastructure of Latin American countries, which helps promote the economic development of Latin American countries.
Whether it is for China, Latin American countries, or even the United States, building a new type of international relationship centered on cooperation and win-win can create a "community with a shared future for mankind". After all, the good of everyone is truly good.
(The authors are respectively Dean and Honorary Dean of the "the Belt and Road" Research Institute of Hainan University)