Xi visit to bol­ster ties with Chile

China Daily (USA) - - XI’S VISIT - By XIN­HUA

Pres­i­dent Xi Jin­ping’s visit to Chile of­fers a chance to strengthen bi­lat­eral ties as China takes stock of the progress made to date and the chal­lenges that lie ahead.

“As bi­lat­eral eco­nomic and trade ties have grown to such an ex­tent that China is the coun­try’s lead­ing trade part­ner, that should be re­flected via a strate­gic pro­posal to re­in­force the re­la­tion­ship,” said Os­valdo Ros­ales, con­sul­tant and for­mer di­rec­tor of In­ter­na­tional Trade and In­te­gra­tion at the San­ti­ago-based Eco­nomic Com­mis­sion for Latin Amer­ica and the Caribbean (ECLAC).

Chile was the first coun­try in South Amer­ica to es­tab­lish diplo­matic ties with China and was among the first to rec­og­nize it as a mar­ket econ­omy and to sup­port its en­try into the World Trade Or­ga­ni­za­tion. It was also the first Latin American coun­try to sign a bi­lat­eral free-trade agree­ment with China in 2005.

Trade ties be­tween the two boomed be­tween 2001 and 2014, but “in 2015, ex­ports in value dropped. It’s time to ex­am­ine trade ties, not in terms of quan­tity, but in terms of qual­ity”, Ros­ales said.

While see­ing ex­ports grow is al­ways wel­come, “the most im­por­tant thing is the con­tent of those ship­ments and this coun­try is faced with a pend­ing chal­lenge due to an ex­port struc­ture that is too con­cen­trated on few ba­sic prod­ucts”, said Ros­ales.

Cop­per, Chile’s main raw ma­te­rial ex­port, rep­re­sents 79 per­cent of the coun­try’s ex­ports to China. China, how­ever, is also Chile’s sec­ond-largest trade part­ner for non-cop­per goods.

Thanks to the free-trade agree­ment be­tween two coun­tries, China is play­ing an in­creas­ingly larger role as a des­ti­na­tion mar­ket for Chilean food prod­ucts.

“Fruits, seafood and wine, among other prod­ucts, have gained great pop­u­lar­ity among Chi­nese con­sumers,” said Juan Este­ban Musalem, pres­i­dent of the Chile-China Cham­ber of Com­merce, In­dus­try and Tourism, ac­cord­ing to Chilean news­pa­per El Mer­cu­rio.

In 2015, bi­lat­eral trade vol­ume reached $31.88 bil­lion, which rep­re­sents 25 per­cent of Chile’s for­eign trade. The num­ber of Chilean com­pa­nies that ex­ported to China in­creased from 477 in 2006 to 1,084 in 2015.

Thanks to the FTA, 97.2 per­cent of Chilean prod­ucts can en­ter the Chi­nese mar­ket du­tyfree, ac­cord­ing to the Gen­eral Direc­torate of In­ter­na­tional Eco­nomic Re­la­tions.

In or­der to bet­ter im­prove the ex­port struc­ture, “the chal­lenge is for Chile, which should create a se­ries of poli­cies and tools to di­ver­sify its pro­duc­tive ap­pa­ra­tus and prin­ci­pally, di­ver­sify ex­ports”, said Ros­ales.

“We have to look at the qual­ity of the re­la­tion­ship rather than the quan­tity. We can in­crease our ex­ports to China by 10 per­cent, but it would be more in­ter­est­ing for both coun­tries to work to­gether to di­ver­sify our ex­ports,” he added.

“The Chilean govern­ment must de­velop public poli­cies help­ing SMEs (small- to medium-sized en­ter­prises), such as pro­vid­ing funds for train­ing, pro­vid­ing ac­cess to tech­nol­ogy, mod­ern­iz­ing their pro­duc­tion tech­niques and help out with fi­nanc­ing,” Ros­ales said.

“China can be­come a more ef­fec­tive co­op­er­a­tive part­ner for Chile” by pro­mot­ing trade ties with its lesser-known re­gional mar­kets, said Ros­ales.

China’s gal­lop­ing sci­ence and tech­nol­ogy could also help Chile’s de­vel­op­ment, said Ros­ales, not­ing its de­vel­op­ment of the world’s fastest su­per com­puter and goal to be­come a tech­no­log­i­cal and sci­en­tific pow­er­house by 2020.

New Chi­nese-de­vel­oped tech­nolo­gies could be ap­plied to Chilean agri­cul­ture, min­ing, fish­ing and forestry through “joint Chi­nese-Chilean firms ... to add value to Chile’s pro­duc­tion and ex­ports”, said Ros­ales.

“Sell­ing more cop­per, wine and fruit to China is not enough to meet the chal­lenge to Chile’s econ­omy of re­cov­er­ing high growth rates, nor enough to re­flect a more bal­anced ex­port dy­namic,” said Ros­ales.

This idea of co­op­er­a­tion on in­no­va­tive de­vel­op­ment was echoed by an­other Chilean ex­pert.

Latin American coun­tries like Chile “have to learn the full ex­tent of the sig­nif­i­cance of the trans­for­ma­tion China is un­der­go­ing”, said Chile’s for­mer am­bas­sador to Bei­jing, Fer­nando Reyes Matta, not­ing that in­no­va­tion in China is “propos­ing the need to make progress in new ar­eas of knowl­edge and sci­ence ... to­wards de­vel­op­ment”.

In­no­va­tion is the key of “the de­vel­op­ment model China has adopted, whose main foun­da­tions are tied to ad­vanced de­vel­op­ments in sci­ence and tech­nol­ogy”, said Reyes, adding Latin Amer­ica should take note and de­velop the kind of tal­ent nec­es­sary to gen­er­ate patents.

To­day’s global eco­nomic cri­sis makes it even more ur­gent to think cre­atively and out­side the box, said Reyes.

HEC­TOR VIVAS / GETTY IM­AGES

A green­gro­cery of­fers fruits, coal and fire­wood in Te­muco, host city of the 2015 Copa Amer­ica Chile in Te­muco, Chile.

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