Between 1990 and 2016, trade and investment from China has resulted in 1.8 million direct jobs being created in Latin America and the Caribbean (LAC), representing almost 4% of the region’s available employment.
Some 60 infrastructure projects, worth more than US$85 billion, alone generated approximately 350,000 jobs, according to research on the impact of Chinese investment in the US backyard by the International Labor Organization (ILO).
“Public and private Chinese companies are not only buying raw materials in the region, but also investing in mining, agriculture, industries and services, including financial and banking services,” said José Manuel Salazar, ILO Director for the LAC region.
This trade relationship with LAC countries took shape about 15 years ago when the Chinese construction industry began to boom. For the first decade, LAC countries profited greatly by exporting natural resources to China.
Now China’s hunger for minerals has almost been satiated, yet Chinese firms continue to invest in the region’s infrastructure, also proposing to build a transcontinental railway from Brazil’s Atlantic coast to Peru’s Pacific coast. One of China’s wealthiest businessmen has begun building a canal in Nicaragua to rival the Panama Canal.
The Chinese have bought a significant amount of sovereign debt, which is the main funding source for much of the ongoing development, says the report.
For LAC, China is the second major trade partner, but LAC is the fourth most important trade partner for China after the United States, the European Union, and Asia.
There is a strong trade deficit for LAC: since 2012, the balance of trade has been above $75 billion and increased over 15 fold in 2000–2014, the report noted.
“It is a neglected subject, with a vast knowledge gap,” said Salazar. “The objective of this first study, which is truly ground-breaking, is to start filling that gap.” ILO also claims this is the first ever research carried out on this topic.