China LatAm investment diversifies
As China’s domestic demand expands and Latin America undergoes economic restructuring, the two sides’ trade and investment activities are diversifying, the Ministry of Commerce said on Thursday.
The economies of China and Latin America, which is a vibrant and promising market, highly complement each other, said ministry spokesman Sun Jiwen.
“We have noticed that more merger and acquisition activities have been carried out by Chinese companies, not only in Latin American countries’ energy and commodities sectors, but also extending to agricultural, cultural, financial and information service businesses,” he said during a news conference in Beijing.
Bilateral economic ties have developed rapidly since China was admitted into the World Trade Organization in 2001, and trade figures show that China has purchased more commodity and energy products including soybeans, iron ore, coal and crude oil from the region over the past decade.
China is Latin America’s second-largest trade partner after the United States. Bilateral trade between the two sides totaled $236.5 billion last year, according to the General Administration of Customs. In 2000, the bilateral trade was $12.6 billion.
“On the whole, bilateral trade still centers on traditional products, but both sides have already opened more market access to each other’s high-tech products and commodity goods, such as China’s railway vehicles, telecommunication equipment and construction machinery and Brazilian soybeans and beef, as well as Chilean wines and fruits,” said Sun.
There is room for more business, he said. China has advantages in areas such as solar power and large equipment, while Latin America is promoting a low-carbon economy.
Li Guanghui, vice-president of the Chinese Academy of International Trade and Economic Cooperation in Beijing, said Latin America is highly market-oriented. He added that he expects greater two-way direct investment because of the region’s rich resources, stable economic environment and sound legal framework.
The International Monetary Fund projected that Peru, Chile and Brazil will show the strongest economic growth in the region from 2013 to 2017.
“In addition to big-ticket infrastructure projects, future bilateral investment activities can focus on sectors including new energy, new materials, energy conservation and environmental protection, bio-industry, aerospace, auto manufacturing, electronic information and mechanical equipment,” said Li.