Venezuelan President Hugo Chavez's visit to China has once again attracted the attention of foreign media over the China- Latin America relations.

Sino-Latin American relations have undergone a rapid development in recent years. In the politics, leaders of both sides have paid more frequently high level visits to each other. In foreign affairs, China has established diplomatic relations with 21 (of 33) Latin American countries. In the economics, after the bilateral trade reached $40 billion in 2004, the trade volume in 2005 exceeded $50 billion between them. In the same year, China and Chile reached a bilateral free trade agreement.

Along with the rapid development of Sino-Latin American relations, there was also some tension. Roger Noriega, former US Assistant Secretary of State and the US government's point man for Latin American said that the United States must pay close attention to China's expansion in Latin America and must act to ensure that China is not pursuing incompatible goals against the United States in the region. Congressman Dan Burton said more blatantly in a hearing that the Chinese presence in Latin America is not conducive to the Untied States in pursuing her own goals.

Both China and Latin American countries, including Venezuela are developing countries. Both sides are aware of the necessity and feasibility to strengthen cooperation in between all fields. China's developing bilateral economic and trade relations with Latin American countries are not aimed at any third party. On the contrary, they are conducive to promoting cooperation between the South.

Latin American countries initiated their opening up and reform policy in late 1980's and early 1990's for which trade liberalization is an important part of the opening up and reform policy. After the Latin American market was opened up, a large number of small and medium-sized enterprises (SMEs) could barely survive the competition with US, European and Japanese enterprises and faced many difficulties. At that time, China only had a small number of exports with Latin American countries. In recent years, out of more than $400 billion of total imports by Latin American countries, China's exports to Latin America ($20 million) only accounted for around 5%.

In an era of globalization, the competition between countries and enterprises is unavoidable. Since China implemented the reform and opening up policy, Latin American countries and other developed countries also expanded exports to China. Since Latin American countries now also pursue the policy of reform and opening up, this justifies the expansion of exports to Latin America to the whole world.

In recent years there have been repeatedly claims by Western media that China is pursuing a "new colonialism" policy and "plundering" primary products and resources in the Latin American countries. This argument can be seen as unfounded. Although China's imports of primary products and raw materials from Latin America have been increasing in recent years, it is in the interests of Latin American countries. With vast territory and abundant resources, Latin American countries export raw material and primary products to China and other countries. This is appropriate in accordance with their comparative advantage principle. Moreover, China settles all the accounts for its raw materials and primary products imports at the prices that are fixed in accordance with the international market clearing price. The entire transactions are conducted in accordance with the principle of equality and mutual benefits.

The development of Sino-Latin American relations is also conducive for the Latin American countries to further enhance their diversification of foreign economic relations. For a long time, Latin American countries have been pursuing a diversified diplomatic strategy. One of the important components of this strategy is to expand foreign economic relations, reduce its dependence on the US market, and seek more trade partners across the world. Although the current volume of bilateral trade between China and Latin America accounts for less than 6% of the total foreign trade volume of Latin America, her growth potential is huge.

In summary, the rise of China is conducive to enhancing cooperation between the South, promoting the development of Latin America, enhancing the relationship between Chinese and Latin-Americans, and safeguarding world peace and development.

The author Jiang Shixue is deputy director of the Research Office of Latin America at the China Institute of Contemporary International Relations.