2023-05-02 04:06:20
01/05/2023
The lack of knowledge regarding the operation of the Chinese private sector, the doubts that exist regarding its government and its respect for human rights, added to the tense relationship that has existed in recent years between the United States and that Asian country, make them persist. many reservations in public opinion regarding the relationship between Colombia and China.
According to the report Local Perceptions on Chinese investment in Colombiaa, carried out by Colombia Risk Analysis and Cifras y Conceptos, the influence that the People’s Republic of China has in Colombia has grown in size and scope during the last decade, but this is not an isolated case, as the same occurs in the rest of America Latin America, where trade and investment have increased.
In fact, “21 countries in the region have joined the Belt and Road Initiative (BRI), which was launched in 2013, and is financed by the Chinese government to invest in infrastructure such as railways, highways and ports. Chinese banks have lent money to finance infrastructure projects to be built by Chinese construction companies around the world. The OECD projects that investments and loans will exceed 4.570 trillion pesos (US$1 trillion) in a ten-year period, between 2017 and 2027. Argentina, Ecuador and Peru have signed the agreement and, as a result, have received a large number of investments in ports, dams, highways, telecommunications and energy infrastructure”, reads the text”.
Although Colombia is not yet a signatory to the BRI, the recent largest transport and mining infrastructure projects in Colombia have been awarded to Chinese companies: among them the construction of the Bogotá metro, the 80 light metro (Medellín), the Jobo – Medellín gas pipeline, the Regiotram de Occidente, Vía al Mar 2, and the high-grade gold mine of Buriticá – Antioquia (Zijin – Continental Gold).
China has even become Colombia’s second largest trading partner in the last 20 years, following the United States. The commercial relationship of the last 10 years accumulates 27,000 million dollars.
The report states that “these companies have won the tenders in open and transparent competitions with other companies, in accordance with Colombian laws and regulations. China is expected to take advantage of the different investment opportunities that will be tendered by the Government of Gustavo Petro and by future local and national governments, to create stronger ties with Colombia.”
Findings
The main findings of the report, which both institutions took several months to prepare, are: first, the Colombian government is not prepared to deepen its relationship with China from an economic, geopolitical, strategic, and supervisory point of view; second, political, security and contracting risks are increasing for companies, which affects Foreign Direct Investment (FDI) in Colombia; and third, there is a lack of knowledge and understanding regarding China and its way of doing business among Colombian public officials, the business community, and the general public.
In recent months, the executive director of the Colombo-China Chamber of Investment and Commerce, Ingrid Chaves, explained to this newspaper that the Asian country’s expectations regarding Colombia are long-term, that they do not depend so much on the current government but rather on the business is good.
In Chaves’s opinion, China looks favorably on investing in infrastructure, clean energy, technology and mining. In this sense, the Colombia Risk Analysis report predicts that this investment will continue to favor the extractive and hydrocarbon industries, since these sectors satisfy the demand of China and have proven profitability.
However, the analysts say, “social conflicts in resource-rich areas such as Buriticá and Caquetá are likely to deter Chinese companies from increasing their investments in Colombia until the government demonstrates the ability to handle unrest and offer security guarantees on business operations”.
On the other hand, the infrastructure sector will remain the most important for Chinese investment, including investment in roads, railways, ports, energy and digital technology. “Chinese efforts to win additional infrastructure tenders in Colombia will continue and will likely face increased competition from other global competitors,” the report details.
In addition, opinion polls carried out throughout the country by Cifras y Conceptos suggest that Colombians do not have a uniform position on China, because while 67% believe that Colombia should strengthen its economic ties with China, only 27% believe that Chinese companies abide by human rights standards.
Still, analysts believe this is likely to change as increased exposure to Chinese products and progress on infrastructure projects such as the Bogotá Metro: “The lack of a dynamic, proactive and informed debate on China’s role in Colombia will continue to nurture stereotypes and misinformation at all levels of government, business, and public opinion. If sustained, this will translate into Colombia’s continued strategic weakness in dealing with emerging geopolitical challenges.”
Chinese investment has fully delivered five projects: the Gecelca 3 Thermoelectric Plant, in Puerto Libertador (Córdoba); the remodeling of the José María Córdoba airport, in Rionegro (Antioquia); the 4G Pasto – Rumichaca highway, in Nariño; the San Felipe Solar Park, in Armero (Tolima); and the Los Llanos Solar Power Plant phases 1 and 2, in Puerto Gaitán (Meta).
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