A free trade deal between China and Mercosur, the South American trade bloc, was proposed on Monday by Premier Wen Jiabao.
Analysts said that the deal, if signed, will carry a number of benefits for the highly complementary economies.
"We share extensive common interests and we have great potential for further cooperation, which will increase the power of developing countries," Wen said in Buenos Aires where he met Argentine President Cristina Fernandez and held a video conference with the presidents of Brazil and Uruguay.
"We should carry out feasibility studies on a free trade area between China and Mercosur," Wen said.
He also set a target to raise trade between China and the bloc to $200 billion in 2016, double the trade value of 2011.
All the regional leaders agreed on the benefits of a trade pact.
Brazilian President Dilma Rousseff said that boosting relations can keep any contagion from the financial crisis at bay and stop it "provoking unwanted consequences in employment and incomes that would hurt economic growth".
Fernandez said increasing links between China and Mercosur will inject economic vitality into the member countries, and boost Mercosur's development.
Uruguayan President Jose Mujica highlighted the need for Mercosur to add value to exports of raw materials and create more jobs.
Mercosur, also known as the South American Common Market, groups Argentina, Brazil, Uruguay and Paraguay.
Trade links have blossomed in the past decade between China and Mercosur.
China is Mercosur's second-largest trade partner and export market.
The bloc is the major exporter of agricultural products, such as soybeans and meat, to China, with total trade between them reaching $100 billion in 2011.
Qi Fengtian, an expert on Latin American studies at the Chinese Academy of Social Sciences, said that free trade offers new opportunities, not just in financial terms.
"Considering the rising influence of Mercosur's member nations, I think cooperation with China will contribute more to a fair and rational international trade order," Qi added.
Xu Yicong, former Chinese ambassador to Argentina, said increased cooperation will not only promote China's trade with the bloc but allow for a better understanding of various issues.
The proposed free trade deal could be discussed during Mercosur's meeting in Mendoza, Argentina, this week.
"You can see leaders are aiming at a long-term plan. They expect that working with China will drive their growth," Qi said.
Trade analysts cautioned that Brazil and Argentina share concerns over any trade deal as both nations have adopted measures to boost home industries.
While members of Mercosur have certainly tried to safeguard their national interests, growing global interdependence can also benefit economies, Qi said.
He Shuangrong, a specialist on Latin America at the Chinese Academy of Social Sciences, pointed out there is no significant barrier to the development of China-Mercosur ties.
Wen held talks with Fernandez at the Rose Palace in Buenos Aires on Monday.
Argentina ships about 80 percent of its soybeans to China, with trade between the two countries reaching $14.8 billion in 2011.
Contact the writers at qinjize@chinadaily.com.cn and wangchenyan@chinadaily.com.cn
Cheng Guangjin and agencies contributed to this story.
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