Vol. 6 Num. 1 - GCG: Revista de Globalización, Competitividad y ...

1161. A Brief History of Economic relations between China and LatinAmerica1.1. Ancient TimesChina and Latin America have a long history of friendly relations in term of economic,trade, and cultural exchange. Beginning in the 16 th century, or the Ming dynasty in China,Chinese businessmen traded silk, china, tea, and other goods for silver, which wasshipped across the Pacific Ocean from Mexico and Latin America to Manila City in thePhilippines, a colony of Spain at that time. This was called the Silk Road of the Sea, orTrade of Silk for Silver. In colonial times, the production of silver in Latin America wasabout 100,000 -130,000 ton per year, 80% of silver was exported abroad and half of thatwent to China in exchange for Chinese silk and other goods, or for speculation 1 . The largeamount of silver used as hard currency contributed significantly to Chinese economicdevelopment during the late Ming dynasty through the Qing Dynasty, from the 16 th to 19 thcentury 2 .Furthermore, corn, sweet potatoes, potatoes, and other vegetables were introduced toChina due to the trade between China and Latin America in Manila. Instead of the traditionalwheat and rice in China, which had low production, these new foods from Americahad higher production, which contributed to the fast growth of the Chinese populationduring the Qing Dynasty (from the 17 th to early 20 th century), from about 100 million at theend of the Ming Dynasty to more than 400 million by the end of the Qing dynasty.1.2. The Cold WarSince the establishment of the People’s Republic of China in 1949, China has had toadopt a “one-sided policy”, that is, China joined the socialist camp headed by the SovietUnion and had no formal diplomatic relations with the western camp, including LatinAmerican countries. In this context, the Chinese government adopted polices of “Developingunofficial Diplomacy between people, building up closer economic and culturalrelations, and developing formal diplomatic relations step by step” 3 .Key WordsChina, LatinAmerica,EconomicRelations, SilkRoad, 21 st centuryPalabras ClaveChina,Latinoamérica,RelacionesEconómicas,Ruta de la Seda,siglo XXIPalavras-chaveChina, AméricaLatina, RelaçõesEconómicas,Rota da Seda,século XXIChina began trading with Latin America in the early 1950s, but with much difficulty. In1. Han Qi, The Relations between Latin American Silver and Chinese Economic development in Late Ming Dynasty and Qing Dynasty, ChineseStudies about Latin America in the 21 st Century, Edited by Zhu Hongbo, Jiang shixue and Cai Tognchang, Fudan University Publishing house,Shanghai, China, April, 2007 (only available in mandarin). At that time, silver was more expensive in China than in Latin America, Europe,and other parts of the world, so some scholars thought that European businessmen just traded silver for gold with China in order to makea profit.2. The first paper currency in the world appeared in the Song Dynasty in China in roughly the 11 th century. But in the Yuan dynasty (theMongol dynasty, about 13 th -14 th century), the Mongol government issued too much paper currency to cover its huge deficit, and very highinflation lead to the disappearance of paper currency in China from then on. But gold and copper coin were not plentiful in China in term ofresources, so silver from America was important for promoting the market economy at that time. The Mexican silver coin with an eagle hada very great influence on Chinese currency systems, economics, and social life. It was used until 1949, when the People’s Republic was built.3. Zhang Xichang, Three Tides of Chinese diplomatic relations with the world, published by World Vision Publisher, 1998 (only available inmandarin).JEL CodesF14; O57GCG GEORGETOWN UNIVERSITY - UNIVERSIA ENERO-ABRIL 2012 VOL. 6 NUM. 1 ISSN: 1988-7116pp: 115-135