E-COMMERCE
CONNECTING CHINA AND LATIN AMERICA VIA DIGITAL SILK-ROAD
COMERCIO ELECTRÓNICO CONECTANDO CHINA Y
AMÉRICA
LATINA A TRAVÉS DE LA RUTA DE LA SEDA DIGITAL
Xiaoyu Li * https://orcid.org/0000-0002-6187-8170
Yajie Wu https://orcid.org/0000-0001-7536-4202
Yifan Wang https://orcid.org/0000-0003-0740-043X
Yuexuan Wang https://orcid.org/0000-0001-9726-3349
Tong Wen https://orcid.org/0000-0002-1929-4358
Beijing International Studies University,
School of Interpreting and Translation, Beijing, China
*Corresponding author: lixiaoyu@bisu.edu.cn
JEL
Classification: F02, F15, F59
DOI: https://doi.org/10.5281/zenodo.6186909
Received: 31/01/2022
Accepted: 18/02/2022
Abstract
Latin America is the natural extension of the
“Maritime Silk Road” and its exchanges and cooperation with China have become
increasingly frequent in recent years. Under the current globale conomic
backdrop, e-commerce as an emerging industry is gaining momentum and playing a
bigger role in international
cooperation. The Belt
and Road top-level
design features policy
coordination, unimpededtrade, facilities connectivity and
people-to-people bond respectively, which play a guiding role in China-LAC
cooperation. Coupled with the status quo, the paper will mainly focus on these
four sections so as to better analyze the China-LAC cooperation in Silk-Road
E-commerce. This paper intends to analyze China-LAC e-commerce cooperation in
fields of policy, trade, facilities, and people-to-people contact and study in
which areas still remain room for bilateral cooperation and how can both sides
better achieve win-win results under the framework of China’s “Belt and Road
Initiative”.
Keywords: Silk-Road E-commerce, China-LAC Cooperation,
Policy Coordination, Unimpeded Trade, Facilities
Connectivity, People-to-people Bond
Resumen
América Latina es la extensiyn natural de la “Ruta Marítima de la Seda”
y sus intercambios y cooperación con China se han vuelto cada vez más frecuentes
en los últimos años. En el contexto económico mundial actual, el comercio
electrónico como industria emergente está cobrando impulso y desempeñando un
papel más importante en la cooperación internacional. El diseño de alto nivel
de la Franja y la Ruta presenta coordinación de políticas, comercio sin trabas,
conectividad de instalaciones y vínculo entre personas, respectivamente, que
desempeñan un papel rector en la cooperación entre China y ALC. Junto con el
statu quo, el artículo se centrará principalmente en estas cuatro secciones para
analizar mejor la cooperación entre China y ALC en el comercio electrónico de
la Ruta de la Seda. Este documento tiene la intención de analizar la
cooperación en comercio electrónico entre China y ALC en los campos de
política, comercio, instalaciones y contacto entre personas y estudiar en qué áreas
aún quedan espacios para la cooperación bilateral y cómo ambas partes pueden
lograr mejores resultados en los que todos ganan en el marco de la “Iniciativa
de la Franja y la Ruta” de China.
Palabras clave: Comercio
electrónico de la Ruta de la Seda, cooperación entre China y ALC, coordinación
de políticas, comercio sin trabas, conectividad de instalaciones, vínculo entre
personas
Introduction
The world is currently
undergoing complex changes towards multipolarity. In order to follow the global
trend, China has proposed the “Belt and Road Initiative”. Latin
America, as the natural extension of the "Maritime Silk Road", is one
of the best partners of the “Belt and Road Initiative”. Therefore, the
overall cooperation between China and Latin America is particularly important
in this context. In the past few years, China and Latin America have held
several China-CELAC forums to study and discuss how to build relations in the
new era; in 2015, China opened the Internet plus development model; in 2016,
China and Chile signed a memorandum of cooperation on e-commerce, opening the
door to e-commerce on the Silk Road between the two countries. In the post-pandemic
era, regional cooperation through the Internet has gradually become one of the
important ways of overall cooperation. With the Internet and the BRI as the
backbone, structural reforms as the driving force, and regional integration as
the support, China-Latin America cooperation has shown a positive trend.
However, in the face of global uncertainties, such as complex geopolitics,
unbalanced regional economic growth, transportation and logistics constraints,
the overall cooperation between China and Latin America based on e-commerce is
in a situation of both opportunities and challenges.
First, according to
Zhang Xiaheng1, Silk-Road E-commerce is a kind of cross-border
e-commerce, and cross-border e-commerce refers specifically to cross-border
e-commerce platform enterprises, including both third-party cross-border
e-commerce platforms and self-built ones. In cross-border e-commerce
transactions, cross-border e-merchants are pivotal in trading activities, which
is both a medium for displaying and browsing commodities and a place for
reaching transactions of commodities, playing the role of bridging commodity
supply and consumption. At the same time, cross-border e-commerce is also a
platform for communication and exchange among cross-border e-commerce transaction
subjects, and it is an important element that cannot be abandoned in
cross-border e-commerce transactions.
Latin America and the
Caribbean is a natural extension of the "21st-Century Maritime Silk
Road" and an indispensable and important participant of the “Belt and Road
Initiative”. "Silk-Road E-commerce" is an important initiative to
promote the overall and standardized development of the "Belt and
Road", and is new impetus for promoting the growth of China's foreign trade
under the new situation. China and the countries along the "Silk-Road
E-commerce" have a realistic foundation, but also faces certain
challenges. While the global sudden outbreak of the Covid-19 pandemic in 2020
promoted the development of cross-border e-commerce, it also brought challenges
to cross-border e-commerce. Faced with both challenges and opportunities, China
and Latin America should work together, adjust timely and work on the strategic
plan of China-Latin America cooperation to adapt to the current international situation,
in order to achieve the common development of China-Latin America economy in
the post-pandemic era.
According to the ideas
above, the study aims to analyze the current situation and dig out the
potential value of cross-border e-commerce between China and Latin America
under the framework of Belt and Road Initiative. By using data studies, content
analysis and induction, the study finds the great potential for further
development and cooperation between China and Latin America.This study will discuss
views on four aspects: policy coordination, unimpeded trade, facilities
connectivity and people-to-people bond.
Policy
Coordination
The Silk Road, which
started from the West Han Dynasty, when Zhang Qian stepped forward and opened
up such a road, has a long history and has continued to develop and extend to
the present day. Since 2013, when President Xi Jinping proposed the "Silk
Road Economic Belt" and the "21st Century Maritime Silk Road",
the Silk Road has been integrated with the development needs of today's times
and transformed into a solution and paradigm of China for mutually beneficial
cooperation among countries around the world. As a natural extension of the
Maritime Silk Road, Latin American countries are very important partners for
China. The integration of the “Belt and Road Initiative” and e-commerce to form
Silk-Road E-commerce is a relatively recent development, and is still a very
new topic that deserves to be explored and studied. The development of
China-Latin America Silk-Road E-commerce cannot be achieved without the support
of policies.
To look from a big
picture, China and Latin American countries have had several friendly state
visits and signed many relevant policy documents to guarantee bilateral trade
and economic exchanges. First, the China-LAC Forum was established in 2015,
which reflects the goodwill of both sides to promote the development of a
comprehensive partnership between China and Latin America for equality and
mutual benefit, and is an important platform for dialogue between China and
Latin America. President Xi Jinping visited Ecuador, Peru and Chile and other
Latin American countries from November 17 to 23, 2016, which is the third visit
to Latin America after his presidency. In the view of Zhang Run, deputy director
of the Department of Latin America of the Ministry of Foreign Affairs, the
visit had four important outcomes. First, the visit further improves the layout
of China-Latin America cooperation. The three countries visited are all
strategic partners or comprehensive strategic partners of China, and the
cooperative relationship is at the forefront. Second, the visit leads the
development of China-Latin America relations. During the visit, President Xi
Jinping upgraded the bilateral relations between China-Ecuador and China-Chile
to a comprehensive strategic partnership, releasing a friendly signal to
promote intentional cooperation between the countries and improve the network
of relations in Latin America. Thirdly, it promotes the gear shift and speed up
of China-Latin America cooperation. President Xi Jinping emphasized the
importance of the new framework of "1+3+6" practical cooperation,
namely, one plan as the goal, three engines as the driving force, and the
promotion of industrial docking in six major areas, under which all the agendas
of China and Latin America can be developed in a deeper and broader
cooperation. Fourthly, it brings the people of China and Latin America closer
together. China's commitment to increase the number of training places in Latin
America in the next three years and the establishment of the China-Latin
America Information Center, as well as the successful conclusion of the 2016
China-Latin America Year of Cultural Exchanges, all reflect the heartfelt and
friendly relationship between the Chinese and Latin American people. This
document covers a wide range of topics, including eight sections of politics,
economy, society, humanities, international collaboration, security and
justice, among which this new document gives high importance to the role of
economic and trade cooperation. In the opinion of Wang Peng, associate
researcher at the Institute of Latin American Studies of the Chinese Academy of
Social Sciences, the China’s Policy Paper on Latin America and the Caribbean
has been updated in only eight years, making it one of the fastest regional
policy documents to be updated. This reflects the rapid development of
China-Latin America relations since 2008, especially since Xi Jinping became
president, and the fruitful results achieved as a result. Zheng Meng2
concluded that compared to the old document, the new one has a clearer policy
philosophy toward Latin America: to build a community of destiny, to further
develop the Five-sphere Integrated Plan, and to give full play to the role of
overall cooperation between China and Latin America. From the above, the
cooperation between China and Latin America shows a thriving and overall
positive trend. Therefore, the development of Silk-Road E-commerce has a good
development background and policy environment.
To narrow down and look
from the perspectives of policies related to the cooperation in the field of
e-commerce between China and Latin America, the development of China-Latin
America Silk-Road E-commerce has also been supported by relevant documents.
China has signed relevant Memorandums of Understanding (MOUs) in several Latin
American countries. For example, on November 22, 2016, China and Chile signed
the Memorandum of Understanding between the Ministry of Commerce of the People's
Republic of China and the Ministry of Foreign Affairs of Chile on cooperation
in the field of e-commerce to strengthen cooperation between China and Chile to
provide a favorable development environment for e-commerce, encourage
e-commerce cooperation between enterprises of the two countries, and promote
the sustainable and stable development of bilateral trade. On September 7,
2017, China and Brazil signed the Memorandum of Understanding on E-Commerce
Cooperation between the Ministry of Commerce of the People's Republic of China
and the Ministry of Industry, Foreign Trade and Services of the Federative
Republic of Brazil. The two sides will establish an e-commerce cooperation
mechanism, create a mutually beneficial development environment, and promote cooperation
in e-commerce such as enterprise exchanges, professional training, and sharing
of best practices. All these show that Latin American countries are willing to
cooperate with China to promote the development of Silk-Road E-commerce
together and promote the economic prosperity and growth of countries of both
sides. Especially for Chine, with whom China has a great potential and
feasibility for Silk-Road E-commerce in recent years. The Chilean government
has adopted the Agenda Digital 2020, which focuses on investing in and
developing the digitalization process in the region, improving the information
and communication infrastructure through public-private partnerships, and
enhancing the coverage and quality of Internet connections. This agenda guarantees
the fundamentals of e-commerce development, as Internet communication is the
basis for e-commerce operations. In addition, in October 2021, the mutual
recognition arrangement between the Chinese and Chilean customs
"Authorized Economic Operator " (AEO) was implemented, which is the
first customs AEO mutual recognition arrangement officially implemented by
China in South America. At the same time, for Chile, the country also has
support for businesses. Article 3 of Law No. 20,416 - Special Provisions for Small
Businesses3 states that "the Deputy Minister of Economy,
Development and Reconstruction will be responsible for generating coordination
so that, together with the sectoral ministries, policies and development plans
are formulated considering the particularities of smaller companies. Likewise,
it will be responsible for promoting with its dependent or related services a
general policy for the better orientation, coordination and promotion of the
development of smaller companies, as well as to follow up on the respective
policies and programs and generate the conditions for the access of these
companies to useful sources of information, contributing to the better use of
the promotion instruments available to them”. This provision encourages the
development of small companies and enterprises in Chile, guaranteeing their
survival status, and in the context of e-commerce cooperation, this provision
is able to motivate small businesses to cooperate and guarantee full coverage
of B2B and B2C e-commerce models of cooperation.
From China's
perspective, the country provides an excellent environment for the development
of e-commerce. At the third session of the 12th National People's Congress on
March 5, 2015, Premier Li Keqiang first proposed the "Internet plus"
plan in his government work report. This plan combines the Internet, cloud
computing, big data, Internet of Things, etc. with modern manufacturing
industry to promote the development of web 2.0 and 3.0 of the Internet, which
provides excellent technical development space for e-commerce platforms. This
new development ecology gives full play to the advantages of the Internet and
integrates the innovations of the Internet with the economy, trade, culture and
other aspects. E-commerce is one of this kind of project of Internet plus
traditional trade and achieves the effect of 1+1>2. In addition, China has
launched the digital RMB. In Bao Jianyun’s4 opinion, as a
representative of the sovereign digital currency of a large country, the
digital RMB can become a means of denomination, payment and settlement for
international trade, cross-border capital flow, cross-border industrial
investment and play an important role as a reserve currency in the
international community. The issuance, circulation and internationalization of
the digital RMB can promote the RMB to assume the function of a currency
"for the Chinese people and the people of the world". Building a
cross-border digital RMB issuance and circulation platform with
blockchain-based technology support is an important way to internationalize the
RMB and a strategic measure to build a world sovereign digital currency system
and reform the international monetary system. The digital RMB plays a monetary
support role for the Silk-Road E-commerce and provides a more convenient and
secure payment method for people.
Unimpeded
Trade
Unimpeded trade is one
of the Five-Pronged Approach of the “Belt and Road Initiative”. In the
integrated cooperation between China and Latin America, both sides need to
strengthen the unimpeded trade. According to the statistics of the World Bank,
the total population of Latin America reached 652 million in 2020, with unique
market size and potential. China and Latin America have great potential for
cooperation in the field of trade and investment. China and Latin America
should have discussions and make appropriate arrangements on the facilitation
of trade and investment, eliminate trade barriers, reduce trade and investment
costs, improve the speed and quality of regional economic cycles, and achieve
the goal of mutual benefit and win-win.
The integrated
cooperation between China and Latin America is inevitable, while the building
of Silk-Road E-commerce between China and Latin America has a practical basis.
First, economic interests are the driving force behind the development of the
integrated cooperation between China and Latin America. In terms of trade,
according to Wind Economic Database, the total trade between China and Latin
America has increased from US$14.94 billion to US$216.56 billion from 2001 to
2016, with an average annual increase of 19.5%. In terms of investment, after
the international financial crisis from 2008 to 2009, Chinese investment in
Latin America increased rapidly. By the end of 2015, China’s direct investment
stock in Latin America reached US$126.32 billion. Latin America has become the
second largest region with the highest concentration of China’s OFDI stock
after Asia. The rapid growth of trade in goods between China and Latin American
countries has provided the trading basis and conditions for the development of
Silk-Road E-commerce.
Second, the concept of
e-commerce has been popularized in China. Trade based on e-commerce platforms
continues to develop, providing strong support for the development of Silk-Road
E-commerce in the integrated cooperation between China and Latin America. As
one of the foundations of e-commerce development, electronic payment is
developing rapidly in China. According
to the 48th Statistical Report on China’s Internet Development released by
China Internet Network Information Center (CNNIC),
as of June 2021, the total number of online payment users in China reached 872
million, with an increase of 17.87 million from December 2020, which accounts
for 86.3% of the total number of netizens. On the basis of the rapid
development of electronic payment, online shopping has been popularized. As of
June 2021, the number of online shopping users in China reached 812 million, up
29.65 million from December 2020, which accounts for 80.3% of the total number
of netizens. According to the data from National Bureau of Statistics, in the
first half of 2021, the national online retail sales reached 6113.3 billion
yuan, a year-on-year growth of 23.2%. As one of the giants of e-commerce
platforms in China, Alibaba Group’s total domestic e-commerce revenue reached
473.6 billion yuan in fiscal 2021. At the same time, the number of monthly
active users on the mobile clients of Alibaba Group’s online shopping platform
has exceeded 900 million.
Meanwhile, China’s
cross-border e-commerce has developed rapidly, laying the trade foundation for
the building of Silk-Road E-commerce. In the first half of 2021, China’s
cross-border digital trade continued to advance, leading to the deepening of
international cooperation. In March 2021, the Ministry of Commerce and five
other departments jointly announced to further increase the pilots of
cross-border e-commerce retail imports. At present, China’s cross-border
e-commerce comprehensive pilot zones have been expanded five times, reaching
105 at the total number, covering 30 provinces, autonomous regions, and
municipalities directly under the Central Government. At the same time,
according to CNNIC5, in the face of the impact of COVID-19,
collaborated with the normal operation of China EU trains, cross-border
e-commerce provides convenient access for economic and trade cooperation among
countries along the Silk-Road E-commerce.
As of March 31, 2021, Alibaba Group served approximately 240 million
overseas users in the past year.
Third, e-commerce has
also been popularized to a certain degree in Latin America. The market
potential of Latin America is enormous. It is estimated that in 2021,
e-commerce retail sales in Latin America will reach US$85 billion, and the
total number of e-commerce users in Latin America will reach 298 million. In
2020, the sudden COVID-19 pandemic challenged the economic development around
the world, and Latin America is no exception. However, not all businesses have
been hit by COVID-19. Mercado Libre, an online shopping platform founded in
Argentina, is one. Under the influence of pandemic prevention measures, many
consumers have had to keep quarantine at home. At this point, online shopping
has become a very safe way to buy wanted things. According to data provided by
Mercado Libre, its net income for the first three quarters of 2021 reached
US$494 million. Mercado Libre is not the only e-commerce platform in Latin
America that has developed rapidly during the COVID-19 pandemic. In 2020, 3 of
the 10 countries with the largest growth in e-commerce retail sales were Latin
American countries. Among them, Argentina topped the list with its high growth
rate of 100.6%. Besides, many users will be more inclined to shop online in the
post-pandemic era. According to a survey conducted in Argentina in 2020, about
92% of new e-commerce users tend to continue shopping online in the future. In
countries such as Mexico, Colombia, Peru and Chile, the proportion also reached
90%, 86%, 83% and 82%, respectively. From this perspective, the potential of
e-commerce development in Latin America is high.
In the integrated
cooperation between China and Latin America, it is crucial to build Silk-Road
E-commerce. However, there are many challenges in the process of building
Silk-Road E-commerce in China and Latin America. First, the investment
environment of Latin America is complex, with many factors of regional
instability. According to Zhang and Ma6, Latin American countries
vary widely in their economic development, and the financial and international
systems are not yet sound. In some countries, financial systems are unstable,
while financial institutions are imperfect. Currency exchange rates fluctuate
greatly. Investing enterprises often have to bear a large risk of exchange rate
fluctuations. Second, at present, there are problems with the management model
of cross-border e-commerce enterprises in China, whose management system is not
yet complete. According to Yang7, cross-border e-commerce trade has
developed rapidly driven by improvements in information technology. However,
cross-border e-commerce enterprises also face challenges while reaping huge
economic benefits. Cross-border e-commerce enterprises are imposed higher
requirements in many aspects such as enterprise transaction platforms,
logistics warehousing and payment forms, based on the rapid change of time and
methods of international exchanges. On the other hand, low customs clearance
efficiency and high operating costs have limited the scale and level of cross-border
e-commerce trade to a certain extent and reduced the speed and efficiency of
commodity circulation, which become important external factors limiting the
development of cross-border e-commerce enterprises.
The sudden COVID-19
pandemic has posed a greater challenge for China and Latin America to jointly build Silk-Road
E-commerce. On the one hand, China’s economy has maintained steady growth
thanks to proper government coordination. According to the communiqué of the
National Bureau of Statistics, according to preliminary accounting, China’s
gross domestic product (GDP) exceeded 100 trillion in 2020, an increase of 2.3%
over the previous year, which means the total economic volume reached a record
high. According to the IMF report, China’s economic growth will reach 8.4% in
2021 and will continue to be an important driving force for world economic
growth. On the other hand, however, the lack of governance systems and
governance capacity has caused a severe negative impact on the socio-economic development
of Latin American countries. According to an April 2021 report by IMF, Latin
America’s economy contracted by 7% in 2020, which led Latin America to become
the region with the worst recession around the world in 2020. According to the
ECLAC report, the COVID-19 pandemic has affected Latin America’s economy by
five factors, namely, the decline in economic activity of major trading
partners and the resulting impact, lower commodity prices, disruption of global
value chains, weakening demand for tourism services, increased risk aversion
among investors and deterioration of the world financial environment. The
severe situation caused by the COVID-19 pandemic and the slow economic and
social recovery in Latin America are not conducive to attracting investment,
which negatively affects e-commerce cooperation between China and Latin
America. In addition, after the outbreak of COVID-19, countries around the
world have introduced travel bans and restrictions on people’s movement and
other pandemic prevention measures. The global industrial chain has been
severely impacted. Many countries have shifted their governance priorities to
pandemic prevention and control, leading economic cooperation to be temporarily
placed on the back burner, which causes great impacts on unimpeded trade.
Facilities
Connectivity
Infrastructure is a
prerequisite for all digital economies, and only through infrastructure can
digital technology take hold. On the one hand, infrastructure covers conventional
infrastructure, such as transportation and power grid. On the other hand, as
Internet is enjoying its ever-growing popularity, innovative infrastructure is
also on the rise, with information transmission systems taking the lead,
including telecommunication networks, cable TV networks, radio communication
networks, Internet and mobile networks. Especially in the cross-border trade of
"Silk-Road E-commerce", logistics is an indispensable process among
all, which directly determines the efficiency and feasibility of trade, and
most importantly, infrastructure is one of the most powerful back-ups of
logistics. From the outset of logistics, it is required to go through the steps
of production, loading and unloading, transportation, storage, etc. It is a
robust reflective of the significance of infrastructure that factories,
highways, docks and warehouses are imperative.
Apart from this,
infrastructure can be affected by numerous external factors to a great extent.
For instance, if the world is viewed as a whole, during festival seasons,
consumers always place a large number of orders, and the warehouse capacity
will undergo a great test successively. During the pandemic, the sluggish
economic situation has caused the loss of many jobs, the decreasing number of
workers, and the laggard logistics, so that consumers could not receive goods
in time.
Over the past three
decades, with the development of China's reform and opening up and
urbanization, China has rapidly become the largest infrastructure market in the
world. The Ministry of Transport of the People’s Republic of China pointed out
that since the reform and opening up, China has made great achievements in the
building of transportation infrastructure. For example, by the end of 2017, the
mileage of railways and highways in China reached 127,000 kilometers and 4.78
million kilometers respectively, which are 2.5 times and 5.4 times that of
1978. Among them, the mileage of high-speed railway and expressway has created
a miracle from scratch to the first mileage in the world.
While at the same time,
some problems have been uncovered, the most prominent of which is overcapacity.
As China's infrastructure building has transitioned from a period of rapid
growth in the past 40 years to a period of stable development now, it is
expected that for a short term in the future, the needs of building
expressways, high-speed rail, ports and airports in China will shrink bit by
bit with the problem of overcapacity approaching. With reference to this, China
has begun to dive into innovative infrastructure building and at the same time
has increased cooperation with other countries, so as to better ensure smooth
trade.
According to 2020
Statistical Bulletin of China’s Outward Foregin Direct Investment8,
in 2020, China's foreign direct investment in transportation, warehouse and
postal services increased by 60.6% year-on-year, ranking third among all 18
industries, second only to the year-on-year growth rates of construction,
health and social work, indicating that China has attached great importance to
the construction of foreign infrastructure in recent years. In the
"Silk-Road E-commerce", China has improved the transportation
efficiency and automation of cross-border logistics by increasing the network
infrastructure building at home and abroad, building a smart overseas warehouse
system, and combining the development of new infrastructure with the increase
of infrastructure structure with other countries.
In Latin American
countries, the economic growth has always counted on the export of commodities
and they do not have sufficient infrastructure building capacity. After being
pummeled by the pandemic, the demand for commodities in many importing
countries has decreased sharply, which has disclosed the problem of
insufficient infrastructure building of Latin American countries. Especially in
recent years, after clean energy gains its ground globally, the demand for commodities
will not increase much in the long run and will even lead to a precipitous
decrease in the short term. Therefore, Latin American countries have been
vigorously promoting economic transformation. Through South-South cooperation,
developing infrastructure vigorously can develop and interconnect Latin
America's conventional facilities and communication networks at great extents,
in a bid to directly promote the economic growth of Latin American countries
and assuage the dim economic situation affected by external factors.
After General Secretary
Xi Jinping put forward the "the “Belt and Road Initiative”" in 2013,
in the following years, Latin American countries respond toward it proactively.
In January 2018, at the second ministerial meeting of the China-Community of
Latin American and Caribbean States (CELAC) Forum held in Chile, China sent
formal invitations to 34 Latin American countries, which kicked off the
extension of the "the “Belt and Road Initiative”" to Latin America.
The infrastructure building cooperation between China and Latin America have
also ramped up after the signing of a formal agreement.
To start with, according to Bai Yu9,
China's traditional infrastructure building in Latin American countries has
achieved great success, among which are three most prominent sectors, leading
by port facilities, hydropower station and UHV transmission network. These
sectors have played a pivotal role in logistics during the process of Silk-Road
E-commerce. In addition, information and communication network as one of the
infrastructures can directly affect the economy. Vital as it is, information
and communication network can connect consumers with e-commerce to go through
the last checkpoint of "Silk-Road E-commerce", in which
telecommunications is a way of communication, and telecommunications also
includes mobile communication services. China's mobile communication business
is highly developed, so is the communication equipment manufacturing industry.
On November 1, 2019, China Mobile, China Telecom and China Unicom, the three
major operators in China, officially released 5G commercial packages.
Immediately, more business giants joined. For
example, Wan Jun10 claims that Huawei and ZTE have successfully
entered the field of high-end communication equipment manufacturing, and their
influence in the world is colossal without saying. Therefore, Chinese
businesses are capable enough to help Latin America build an information and
communication network which can be a good fit in the "Silk-Road
E-commerce". Many Latin American countries have chosen to cooperate with
Huawei. The Argentine Ministry of Foreign Affairs11 issued a
statement in July 2020, saying that the Argentine government held talks with
Huawei on the 7th of that month to discuss the possibility of applying Huawei
5G technology in Argentina. Argentine government officials said that Argentina
plans to start using 5G technology in 2022 or 2023; Chilean President said in
April 2019 that he welcomed Huawei's participation in Chile's 5G network
building; Uruguay also signed a memorandum of understanding on strategic
cooperation with Huawei in August 2019.
However, while China and Latin America are
facing opportunities in infrastructure building, challenges are not far from
the sight. For instance, United States has frequently backlashed Huawei's
technology, which can incite Latin American countries to take hostile attitude
towards Huawei. Therefore, intervention of external forces and the like are the
challenges China has to face. Fortunately, most Latin American countries have
stuck to their position and chose to cooperate with Huawei. For example,
Brazil, a country whose one third of its 4G operating networks are in the use
of Huawei equipment. They are aware that if Huawei products are banned, the
equipment that has been put into use will be dismantled, and operators will
suffer a lot of losses inevitably. This is the clear-cut testimony of the great
efforts made by China and Latin America in building an information and
communication network in terms of "Silk-Road E-commerce".
Nowadays, clean energy has gained an
ever-growing popularity. At present, at least 14 Latin American countries have
set renewable energy targets. China has also delivered its commitment to
achieve carbon peak by 2030 and carbon neutrality by 2060. The demand for
energy is urgent in the whole process of "Silk-Road E-commerce".
Hence, China and Latin America have made great efforts in the infrastructure
building of clean energy to ensure the sustainability of "Silk-Road
E-commerce". Over the past decade, the numbers of annual clean energy
installations funded and financed by China have generally been creeping. Yan
Huan, Fan Jianqing, Li Qiang, Wang Xiaobo12 concluded that the
large-scale hydropower project of Santa Cruz River in Argentina kicked off in
October 2015. The project took place at the southernmost part of the world and
was undertaken by China. The total designed installed capacity of the project
was 1,740 MW, and the planned construction period was 5 years. The contract
value of the project was about 5.5 billion US dollars, of which 85% of the
financing came from China. After completion, it would greatly improve the power
supply shortage in Argentina. What’s more, there is cooperation of nuclear
power plants. In November 2014, CNNC and Argentina Nuclear Power Company
formally signed the Commercial Contract of Argentina Heavy Water Reactor
Nuclear Power Plant and the Framework Contract of Pressurized Water Reactor
Nuclear Power Plant, and the two sides cooperated to build the fourth and fifth
nuclear power plants in Argentina. On April 25, 2019, BRI International Green Development
Coalition13 was formally established, aiming at promoting a green
“Belt and Road Initiative” and helping to achieve the United Nations
Sustainable Development Goals in 2030. Cuba and Guatemala are founding partners
in this case. It can be seen that clean energy infrastructure building between
China and Latin America has been at the forefront for a long time. As the
demand for clean energy is growing, there will be more infrastructure projects
for "Silk-Road E-commerce" between China and Latin America in the
future.
People-to-people Bond
“People-to-people Bond” is a significant component of
the five-prolong approach. In September 2013, during the state visit to
Kazakhstan, President Xi Jinping delivered a speech at the Nazarbayev
University. In his speech, Xi Jinping14 proposed the concept of
“People-to-people Bond”. Later, during the visit to Indonesia in
October 2013, President Xi15 outlined the essence of
“People-to-people Bond”, namely, “pursuing trust and harmony, promoting
win-win cooperation, helping each other mutually, connecting people
heart-to-heart, staying committed to openness and inclusiveness”. To make a
conclusion, “People-to-people Bond” aims to build a bridge between two countries,
connecting people of both sides. By enhancing mutual understanding, building
sound friendship, deepening mutual trust and confidence and building a
long-term mechanism for cooperation, both sides can achieve win-win
development.
People-to-people Bond provide an anchor for the “Belt
and Road Initiative” and it is a decisive factor in China promoting
international cooperation of all kinds. At present, the world is facing an
intertwined impact of great changes that have never been seen for a century and
the global pandemic, which has made global economic and social development
unstable. Besides, though the world’s main anthem is still peace and
development, hesitations and doubts towards it remain. Adding deliberate
misleading words of some media, trust, and confidence toward China, and
willingness to cooperate has shown a sign of receding in some countries and
regions. As President Xi Jinping has pointed out the key to state-to-state
cooperation lies in the people-to-people connection, in order to achieve policy
coordination, connectivity of infrastructure and facilities, unimpeded trade,
and financial integration, a nation should get support of people. To this end,
it’s necessary to encourage friendly exchanges between people of both sides and
enhance mutual understanding. Over the years, the “Belt and
Road Initiative” has achieved fruitful results, showing that where people
on both sides are closely linked, cooperation goes a long way.
The outbreak of the Covid-19 pandemic has had huge impacts on the world’s
politics, economy, and society, posing mounting challenges to countries and
regions. People are the foundation of a nation. If people’s wellbeing is being
hit, its influence will ripple to every aspect of society. According to data of
2021 released by the United Nations16, global unemployment remains
at alarming levels, and some vulnerable regions that are already underdeveloped
and unevenly developed are losing heavily in this international health crisis.
However, at the same time, great changes brought by the pandemic have driven a
transformation and creation of new business models in different industries. As
the virus has limited the social distance, online business modes have been developing
rapidly. The digital economy has become a boom and a variety of new business
formats have emerged, during which time e-commerce has seized the chance to
grow. Featuring the requirement of keeping social distance and the advantage of
zero space-time lapse, e-commerce has played a prominent role in ensuring
people’s living standards, stabilizing employment, tackling the overstock of
goods. And in the post-pandemic times, e-commerce was the first to recover. By
boosting consumption, it has been driving the economic and social recovery of
the whole nation. For consumers, e-commerce has solved the travel difficulties
in the pandemic times, providing goods that are available at people's
fingertips; for employees, while the e-commerce industry growing bigger and
stronger, it also has created many jobs; for businesses, e-commerce is more
efficient as it is free from the constraints of time and. In general, if it is
put into good use, e-commerce has a positive effect on improving social and
people’s wellbeing.
Currently E-commerce in China is gaining good momentum
and has become an important part of the digital economy that is the largest in
scale, the fastest in growth rate, the widest in coverage, and the most active
in entrepreneurship and innovation. Besides, it is also an important driving
force for the integration and development of the real economy and the digital
economy. Since the signing of the first bilateral MOU on e-commerce cooperation
between the Ministry of Commerce of China and the Ministry of Foreign Affairs
of Chile at the end of 2016, Silk-Road E-Commerce has spread across five
continents. So far, 22 countries have signed MOUs and established bilateral
cooperation mechanisms with China, among which 17 of them are developing
countries. Silk-Road E-Commerce has proposed innovative methods for
international exchanges, and it has shown great vitality and posed a promising
development scenario.
In the new developing stage, China needs cross-border e-commerce
to be the driver China is a populous country with 1.4 billion people. The large
population makes China an attractive and competitive consumer market. In the
new stage of development, the principal conflict facing Chinese society in the
new era has changed to a conflict between unbalanced and inadequate development
on the one side and the people’s ever-growing desire for a better life on the
other. People's demand for goods does not merely stay in quantity but in
richness and quality. By building a platform to gather products from around the
world, cross-border e-commerce has a unique advantage on the supply side.
Besides, China’s new “dual circulation” development pattern also needs
e-commerce to play its unique advantage of innovation-driven and efficiency
advantages to improve resource allocation, help to integrate different services
including education, health care, cultures, tourism, and so on, inclusively
take development requirements of different regions into account of the, and
facilitate the upgrading and transformation of global supply chains.
Chinese e-commerce always puts people at the
center. By the end of 2020, China achieved the elimination of extreme
poverty with 770 million rural poor living below China’s poverty line have
gotten rid of poverty. The unbalanced development between regions has been
greatly improved. E-commerce has played an important role in poverty
alleviation. By building an online platform, e-commerce breaks down spatial
barriers and brings out quality goods that used to be hidden in remote places,
making them available to a wider range of consumers. According to the
Ministry of Commerce of China17 the national rural network
retail sales reached 1.79 trillion yuan in 2020, an increase of 8.9%
year-on-year on a comparable basis. In international cooperation, China has
been sharing its experience in poverty reduction also providing the world with
Chinese solutions to the problems of poverty and uneven regional development.
During this process, the digital economy has facilitated regional and country
development.
Chinese e-commerce companies are well developed, have
a large business scope, and have accumulated rich experience in doing business
overseas. In a report published by the United Nations Conference on Trade
and Development18 in 2021, four of the top ten global B2C e-commerce
by GMV in 2020 are from China: Alibaba in the first place, JD.com in third
place, Pinduoduo in fourth place and Meituan in seventh
place. And also, according to the data released by Alibaba19,
its international website serves a cumulative total of over 26 million active
business buyers in over 200 countries and regions, with a compound growth of
over 100% in buyers over the past three years. With rich practical
experience in cross-border e-commerce, Chinese e-commerce businesses can make
their service more suitable for local production and life patterns, making the
cooperation a close fit.
E-commerce in the Latin American regions is gaining
momentum. The pandemic was a turning point for the development of e-commerce in
Latin America. before it, e-commerce development was still in its infancy. The
pandemic has accelerated the digital transformation and e-commerce has been
growing rapidly in Latin America. According to Matteo Ceurvels20
article published on eMarketer's website, eMarketer’s survey its
sales increasing by 63.3% in 2020 and surpassing US$100 billion for the
first time. But at the same time, according to Ali-KPMG's
"Digital Economy Development Index”21, Brazil is ranked first
in Latin America, but only 31st in the world, and most other Latin American
countries in the 40th to 100th percentile, and some in the bottom 50.
The demand for e-commerce among Latin Americans is on
the rise. Over the years, with improved infrastructure and widespread use of
mobile phones, Latin America has seen a gradual increase in Internet
penetration and an increase in the number of netizens and online consumption.
In addition, Latin America has a relatively young demographic and e-commerce
can be a perfect match for young people who like to seek out innovation and
adapt quickly to new things that emerge. In the post-pandemic era, global
employment is in a gloomy situation. As e-commerce is flexible in business
forms, it has provided new employment ways for people, which to some degree,
has helped to ease pressure on employment.
In light of the current situation of e-commerce development in China and
Latin America respectively, there are multiple points for cooperation between
China and Latin America in the e-commerce area. As China and Latin American
countries are developing counties, there are some similarities in the
development stage. Besides, most Latin American countries are in the same
period of development as China once was. Therefore, China’s experience in
development can be used as a reference for Latin American countries. In
addition, the needs of the people of both sides are complementary at the
current stage of development. China's vast market has strong purchasing power
which matched Latin America's need to balance regional development, narrow the
gap between the rich and the poor, and accelerate the digital transformation.
Given the momentum of e-commerce on both sides, China's Silk-Road E-commerce
initiative provides a platform for exchange. Under the framework of this
initiative, exchanges between the two sides can be more robust and productive.
At the government level. Governments of both sides
need to seize the opportunity of digital transformation and expand their circle
of friends in the digital economy field. In addition, under the framework of
the “Belt and Road Initiative”, the government should continue to improve the
top-level design. Together with think tanks, the government should devote more
effort to regional and country-specific studies to better guide enterprises in
localization and enhance mutual trust and confidence in international
cooperation.
Economically, cooperation should focus on improving
local people’s living standards and strengthening friendships of both sides. In
international cooperation in poverty reduction, the Silk-Road E-commerce can
serve as a platform for investment and cooperation in education, agriculture,
and health care and help to improve overall local infrastructure conditions and
help transformation.
In terms of culture, through online media and
platforms, people can easily access information and cultural knowledge from
both sides, which helps to improve mutual understanding and bridge cultural
boundaries. Besides, in the cross-border trading process, cultural products are
various in forms and are easy to get. By making full use of its feature, people
can get cultural products online and use them to present Chinese and Latin
American cultures. What’s more, online courses can lower the threshold of
language learning and help forest professionals for international exchanges and
cooperation.
Result:
Future and Prospects
This study found that
there is a huge potential for cooperation in China-LAC Silk Road E-commerce.
In terms of policy
coordination, Silk-Road E-commerce still has potential and room for
development. For example, although there are MOUs, they are generally used in
what the parties have indicated, and have not yet reached a legal commitment,
or the parties are not yet able to designate an agreement with legal
compulsion. Therefore, in order to further promote the development of Silk-Road
E-commerce, China and Latin America still need to sign more specific,
down-to-earth relevant policy documents, which is exactly the direction that
China needs to work on. In addition, there are few binding and control treaties
for the cooperation system. If the two sides want to further strengthen the
cooperation of Silk-Road E-commerce, more detailed agreements must be made to
ensure that there are countermeasures in case of problems in all aspects, such
as capital, trade, finance and people's confidence.
In terms of unimpeded
trade, amidst the challenges come opportunities. In recent years, major
countries in the world have taken the development of digital economy as an
important way to develop the economy. The COVID-19 pandemic has inadvertently
facilitated the development of digital economy. The outbreak of the pandemic
has reconfirmed the importance of developing information technology and
promoting the digitization of the economy and society. The willingness of China
and Latin America to promote cooperation in digital economy has also increased
because of the pandemic. On the one hand, the COVID-19 pandemic has provided
practical experience for the popularization and development of digital economy.
As the pandemic continues, more and more Latin American companies are taking
advantage of the Internet to conduct business. According to CEPAL statistics,
between March and April 2020, the number of commercial websites in Colombia and
Mexico increased 800% over the same period of the previous year. In April 2020,
the number of new e-commerce websites of Brazil and Mexico increased by more
than 450% over the same period of the previous year. At the same time, the
number of websites active in Colombia and Mexico also increased by about 500%
over the same period of the previous year. On the other hand, the outbreak of
COVID-19 has provided an opportunity to further promote the building of
Silk-Road E-commerce for China and Latin America. The digital transformation of
economic and social activities under the pandemic has also provided more
opportunities of cooperation for the building of Silk-Road E-commerce. The
cooperation needs and willingness of China and Latin America to promote the
digital economy development will further increase.
Nowadays, on a global
scale, many companies have seen the limitations of conventional infrastructure,
so they begin to innovate infrastructure constantly to ensure that future of
infrastructure will veer into a smarter and more automated fashion. For example,
automated three-dimensional warehouses can expand the space of warehouses, and
unmanned aerial vehicles can solve the problems of shortage of workers and
rising labor costs. But companies at home and abroad that can master such
leading technology are still marginal. Especially considering that most Latin
American countries are devoid of advanced infrastructure, and most of them are
still at an initial stage of building it, it is difficult to merely rely on
themselves to actualize a short-term success of infrastructure building.
However, there is no doubt that Latin American countries possess their unique
shining points when it comes to software techniques. As a result of that,
cooperation between China and Latin America in infrastructure building in “Silk-Road
E-commerce” is a two-way choice.
Among the five-prolong approach, “People-to-people Bond” seems less
practical than the other four, but without it, nothing can go smoothly.
Although China and Latin America are distant away, bilateral contacts have a
long history, which serves as the foundation of cooperation and exchanges in
the current era. “People-to-people Bond” is everywhere and is in a variety of
forms, adding luster to the interaction between the two sides. In today’s
digital information world, geographical distances are brought closer through
the Internet and people are connected in innovative ways. China and Latin
America are common or complementary in many aspects, which unleashes the great
potential for cooperation. With the help of “People-to-people Bond”,
China-Latin America cooperation will achieve fruitful and win-win results in
the new era.
All these provide
guidance and development ideas for China-LAC Silk Road E-commerce and help
China-Latin America cooperation to a higher level.
Bibliographic
references
1.
Zhang, X. The
types and patterns of cross-border e-commerce. China Business And
Market, [Internet]2017;(31):76. Available from: https://kns.cnki.net/kcms/detail/11.3664.F.20170110.1511.020.html [Accessed
16th Feburary 2022]
2. Zheng, M.
Gathering Strategic Consensus, Boosting Practical Cooperation between China and
Latin America - Summary of the Results of President Xi's Visit to Latin America
and the Significance of the China's policy paper on Latin America and the
Caribbean. Journal Of Latin American Studies, [Internet]2016;38(6):2. Available from: https://kns.cnki.net/kcms/detail/detail.aspx?dbcode=CJFD&dbname=CJFDLAST2017&filename=LDMZ201606001&uniplatform=NZKPT&v=djz8bFqF7LGZro2h2LpivVLvs5tR8TQmaSF5zkVXClWRzQ5lH5FcrPcoWSnERvPa
3. Ley 20416, Fija Normas Especiales para las Empresas de Menor
Tamaño.(Biblioteca del Congreso Nacional, 16th Feburary, 03-02-2010)
4. Bao, J. Sovereign Digital Currency, Financial
Technology Innovation and the Reform of International Monetary System--A
Concurrent Discussion on the Issuance, Circulation and Internationalization of
Digital RMB. Frontiers, [Internet]2020;(02):24-35. Available from: https://kns.cnki.net/kcms/detail/10.1050.C.20200325.1322.002.html [Accessed 16th Feburary 2022]
5. China Internet Network Information Center. The 48th Statistical Report
on China's Internet Development [Internet]. 2021 p. 47. Available from: http://www.cnnic.net.cn/hlwfzyj/hlwxzbg/hlwtjbg/202109/P020210915523670981527.pdf#/ [Accessed 16th February 2022]
6.
Zhang Y, Ma R. The Path Choice of
"Silk-Road E-commerce" Building between China and the Countries along
the "Belt and Road". Practice in Foreign Economic Relations and
Trade. 2019;37(12):20.
7.
Yang J. Management Model Innovation
of China's Cross-Border E-Commerce Enterprises in the Context of Silk Road
Diplomacy. Quality & Market. 2021;41(10):107.
8. Gov.cn. 2021. 2020 Statistical Bulletin of
China's Outward Foreign Direct Investment. Available from: http://www.gov.cn/xinwen/2021-09/29/5639984/files/a3015be4dc1f45458513ab39691d37dd.pdf [Accessed 26 January 2022].
9.
Bai Y.
2014. New Landscape for China and Latin America to Cooperate and Create Win-win
Results in Building Infrastructure. Available from: http://www.xinhuanet.com//world/2014-07/26/c_1111811598.htm [Accessed 26 January 2022].
10. Wan J. On China-Latin America Cooperation on
Industrial Capacity. Journal of Latin American Studies. 2017;39(3):53.
11. Investgo.cn. 2021. Analysis of Experiences on
Carbon Reduction in Latin American Countries and the Cooperation Potential for
China and Latin America. Available from: https://www.investgo.cn/article/yw/tzyj/202109/560726.html [Accessed 26 January 2022].
12. Yan H, Fan J, Li Q and Wang X. Cooperation on
Clean Energy Between China and Latin American Countries. Available from: http://www.xinhuanet.com/world/2016-04/28/c_128939143.htm [Accessed 26 January 2022].
13. Brigc.net. 2019. Introduction of Alliance.
Available from: http://www.brigc.net/gywm/lmjs/202007/t20200726_102077.html [Accessed 26 January 2022].
14. Xi. (2013a, September 8). Promoting Friendship
and Jointly Creating a Bright Future [弘扬人民友谊 共创美好未来]. People’s Daily. Retrieved from CNKI
database.
15. Xi. (2013b, October 4). Jointly Build a
China-ASEAN Community of Shared Future. [携手建设中国—东盟命运共同体]. People’s Daily. Retrieved from CNKI database.
16. Xi J. Promoting Friendship
and Jointly Creating a Bright Future [弘扬人民友谊 共创美好未来]. People's Daily [Internet]. 2013
[cited 16 February 2022];:2. Available from: https://kns.cnki.net/kcms/detail/detail.aspx?FileName=RMRB201309080030&DbName=CCND2013
17. Xi J. Jointly Build a China-ASEAN
Community of Shared Future. [携手建设中国—东盟命运共同体]. People's Daily [Internet]. 2013
[cited 16 February 2022];:p. 3. Available from: https://kns.cnki.net/kcms/detail/detail.aspx?FileName=RMRB201310040020&DbName=CCND2013
18. the United Nations. World Economic Situation
and Prospects: November 2021 Briefing, No. 155 [Internet]. the United Nations;
2021 para. 1. Available from: https://www.un.org/development/desa/dpad/publication/world-economic-situation-and-prospects-november-2021-briefing-no-155/
19. Ministry of Commerce of PRC. The head of the
Department of E-Commerce of the Ministry of Commerce talks about the market
development of online retail sales for the whole year of 2020 [商务部电子商务司负责人谈2020年全年网络零售额市场发展情况] [Internet]. Ministry of Commerce of PRC; 2021
p. 1. Available from: http://www.mofcom.gov.cn/article/news/202101/20210103033238.shtml
20. United Nations Conference on Trade and
Development. Estimates of global e-commerce 2019 and preliminary assessment of
covid-19 impact on online retail 2020 [Internet]. United Nations Conference on
Trade and Development; 2021 p. 2. Available from: https://unctad.org/system/files/official-document/tn_unctad_ict4d18_en.pdf
21. 阿里巴巴国际站（Alibaba.com） [Internet]. Supplier.alibaba.com. 2021 [cited 16 February 2022]. Available from: https://supplier.alibaba.com/content/detail/PX874C04.htm?joinSource=gw_baidu_PC_007872
22. Ceurvels M. Latin America Ecommerce Forecast
2021 [Internet]. Insider Intelligence. 2021 [cited 16 February 2022]. Available
from: https://www.emarketer.com/content/latin-america-ecommerce-forecast-2021
23. Global Digital Economy Development Index 2018
[2018全球数字经济发展指数] [Internet]. 1st ed. 2018 [cited 16 February
2022]. Available from: https://i.aliresearch.com/img/20180918/20180918153226.pdf
Conflict of interests
The authors declare that they have no conflicts of
interest.
Authors' contribution
·
Xiaoyu Li: Project administration review & editing
·
Yajie Wu : Investigation
·
Yifan Wang:
Investigation
·
Yuexuan Wang:
Investigation
·
Tong Wen:
Investigation