Colombia and Its Economic Ties With China

Colombia and its slow but steady strengthening of economic ties with China are currently experiencing new episodes that could accelerate history. Historically, relations between Colombia and China have been distant. Similarly, China’s influence in the country has traditionally been much lower than in other states in the region. The reality is that both countries did not establish formal diplomatic relations until 1980. However, the rapprochement between the two nations, though slow, has also been consistent in the following decades, and a modest trade relationship has been maintained into the second decade of the 21st century.

Since its origins, Colombia’s predominant political and commercial relationship has been with the United States. Not in vain, as the US is the main trading partner, the largest exporter, and the primary donor, having contributed $677 million in aid in 2022, including extensive support for the anti-narcotics strategy and the implementation of the Peace Accords with the now-defunct FARC. Today, despite existing differences between the two countries, with the arrival of the first left-wing government in Colombia, the relationship remains significant, with public demonstrations of willingness to maintain it on both sides.

Simultaneously, relations between Colombia and China have undergone a significant transformation over the years, evolving from a historically low level to becoming a strategic partnership today. Both in the political and commercial spheres, these two nations have woven ties that have contributed to mutual development.

Strengthening ties since the 2000s

Without ever abandoning its traditional alliance with the US, South America, and Europe, Colombia has invited Chinese companies into the country from the early 2000s, especially in the fields of technology and infrastructure . By 2010, China had become Colombia’s second-largest trading partner, albeit at a considerable distance behind the first, the United States.

The visit of Prime Minister Li Keqiang to Bogotá in 2015, during Juan Manuel Santos’ presidency, served for China to propose a bilateral free trade agreement with Colombia (following the example of South Korea and Japan), in addition to greater cooperation in various specific economic sectors, including the development of infrastructure related to the port of Buenaventura and its surroundings.

That incipient presence, always discreet, gained momentum by 2019 when the China Harbour Engineering Company (CHEC) obtained the rights to build the Mar 2 project, a 254-kilometer toll highway from Cañasgordas to Necoclí in the Antioquia region. That was the first major commercial agreement signed during the presidency of pro-US-leaning Ivan Duque. The reality is that China had been trying to get involved in 4th generation road projects in the country four years earlier when the Chinese embassy in Bogotá offered financial support from the China Development Bank.

Likewise, it is worth noting China’s significant presence in the mega-project to build Bogota’s first metro line. Through a consortium, two Chinese companies, CHEC and Xi’an Metro, are involved in this significant project, which represents a massive transportation system.

The Petro government, an opportunity for China?

If during the presidencies of clearly pro-American Colombian leaders, China has been gradually occupying more space in the Colombian economy, Gustavo Petro’s tenure as head of state could be an opportunity for the Asian giant to accelerate its influence.

President Petro’s recent visit to Beijing was an occasion to showcase the interest that exists between both nations to strengthen commercial relations. While preserving the always close relationship with the US, Colombia’s president is trying to expand investments in his country in a multipolar way, favoring the arrival of Chinese technology and capital to infrastructure megaprojects beyond the future Bogotá metro.

In the meeting he held with his counterpart Xi Jinping, Petro negotiated possible investments in the railway transport sector, which is currently non-existent in Colombia since the crisis of the national railways in 1991. Similarly, negotiations were conducted on issues related to ICT, digital economy, and public communication media.

Colombia seeks entry into APEC

Although it is not a decision that would affect only relations with China, it is noteworthy that Colombia has been trying for years to be accepted as a full member of the Asia-Pacific Economic Cooperation (APEC) Forum. If successful, it would be a boost to Colombia’s attempts to approach the Asian continent, as it would lower costs and facilitate logistics. The forum has 21 member countries representing about 62% of the world’s Gross Domestic Product (GDP) and 48% of global trade.

Although APEC has not admitted new members since 1998, President Petro has announced Colombia’s candidacy from San Francisco, USA, where he traveled as a guest to participate in the summit of that forum being held today. In this meeting, Colombia will address “sustainability and energy transition,” topics that Gustavo Petro’s presidency has addressed in various international forums in his 15 months as head of state.

Colombia’s application has had the support of all sectors within the country, seeing in possible membership a unique opportunity for Colombia to belong to one of the most important economic hubs in the world. APEC is a multilateral forum, highly significant in the world economy, which would contribute to the development of productive sectors such as agro-industry, hydrocarbons, and energy.

Colombia and the multipolar alliance

Thus, it seems that present-day Colombia is seeking to expand its alliances in a multipolar way. Without renouncing its close and historic relationships with the US, the country aims to complement American influence with a closer approach to the Chinese giant. Despite significant cultural, political, and even linguistic differences, China’s presence in Colombia is growing daily and is expected to increase.

Colombia has the opportunity to involve Chinese companies in strategic investments such as transportation and other infrastructures while weighing the benefits and disadvantages of cooperating with China in areas such as media, technology, and cybersecurity.

The great challenge for the country will be President Petro’s ability to convince other segments of Colombian politics of the benefits of this alliance with China. Political changes in Colombian’s leadership are subject to democratic will, and can either push forward or paralyze this opening towards China. Therefore, the initiative must be agreed by the whole country, and not partisan. Only in this way will Colombia be able to seize the investment opportunities from the world’s major economies for its necessary development.