International express service company tells you Bilateral trade in 2021 expected to surpass $55 billion to a record high: envoy
While the pandemic continues to disrupt supply chains creating
unprecedented challenges for international trade, economic cooperation
between China and Chile, two countries that are geographically far
apart, is expected to hit a record high by surpassing a $55 billion
threshold, according to a recent forecast by the Chilean Ambassador in
Beijing, Luis Schmidt.
The ambassador's prediction is not unfounded. Driven by an upgraded Free Trade Agreement (FTA) and strengthened cooperation under the Belt and Road Initiative (BRI), bilateral ties have proven highly resilient.
China now accounts
for 38.2 percent of Chilean exports, a milestone achievement compared
with Chile's second- and third-largest trading partners - the US (16.5
percent) and Japan (7.7 percent), the Chilean envoy told the Global
Times in an exclusive interview on Wednesday.
While China remains
Chile's major trading partner, Chile has become China's major supplier
for a range of goods and commodities ranging from copper ore and
molybdenum to fresh cherries, grapes and plums.
One signature
product from Chile gaining popularity in the Chinese market is fresh
cherries. Between January and October 2021, fresh cherry exports to
China reached $1.266 million, up 84 percent year-on-year.
Additionally,
Chile is expected to consolidate positive momentum for bottled wine
exports, with the South American nation rising from being the
third-placed supplier to second place in the Chinese market both in
terms of value and volume, Schmidt said.
In the first 10 months
of 2021, overall trade exchange between the two countries reached $51.51
million, a jump of 45 percent year-on-year, according to the Chilean
Embassy in Beijing.
If Chile's trade with China can top $55
billion this year, it means that its trade volume will account for one
sixth of China-Latin America trade volume, ranking second in the region
after Brazil, Bu Shaohua, deputy director of the Department of Latin
American and Caribbean Studies at China Institute of International
Studies, told the Global Times on Wednesday.
Strengthened
bilateral trade growth has been largely attributed to a bilateral FTA
under which many goods are able to enjoy zero tariffs and competitive
pricing, experts said.
Over the last decade, Chilean shipments of
goods and commodities to China have grown by 182 percent, and since the
implementation of the FTA, bilateral trade has grown on average by 15.7
percent on an annual basis, according to Schmidt.
Leveraging the
rapid development of China's e-commerce sector, Chilean products become
popular on major Chinese consumer platforms such as Tmall, JD.com,
Fresh Hippo, and Pinduoduo, reaching a wider range of consumers.
"We
were granted market access to sell a number of new product categories
in the Chinese market in November this year, among which there is a new
protocol we signed for frozen fruits," the ambassador said, noting that
they are also working closely with Chinese authorities on initiating
several new product categories, such as for bovine and ovine related
products, and a number of other protocols specific to the seafood and
dried fruits sector.
"The positive trade growth experienced by
both countries is in part thanks to the profound bilateral cooperation
that has been built up over our 50 years of uninterrupted diplomatic
relationships," the ambassador said.
Several milestones that have
shaped the bilateral relations, including the fact that Chile was the
first South American country to establish diplomatic relations with
China in 1970, and the first country outside Asia to sign the FTA with
China in 2005.
One of the most positive areas of the bilateral
cooperation has been the joint battle against COVID-19, which the
ambassador said has allowed Chile to better cope with the spread of the
virus and played a role in helping the country meet its vaccination
goals.
Sinovac has sent over 25 million doses of CoronaVac to
Chile. Separately, the country has an agreement with CanSino to supply
1.8 million doses of vaccine, of which 31 percent has already been
delivered, Schmidt said.
Furthermore, on August 4, Sinovac
laboratories announced its intent to invest in Chile and build a vaccine
production plant in the Metropolitan Region in central Chile to produce
60 million doses of vaccines per year, which is expected to be
operational by the second half of 2022. Sinovac will also develop a
research and development center in the Antofagasta Region.
"Both
projects allow Chile and Latin America to be better inserted in the
global vaccine production chain and have a stable supply," Schmidt said.
Foreign
direct investment (FDI) from China to Chile has remained dynamic and
diversified. Cumulative Chinese investment in Chile amounts to
approximately $13 billion, which represents around 9 percent of the
total amount of FDI in Chile, in which the BRI plays a booster role.
"Chile
considers that the BRI plays an important role in our bilateral
relations. Likewise, cooperation in this multilateral initiative makes
an important contribution to collaboratively confront the current
challenges of the pandemic, and will be essential for post-pandemic
recovery," the ambassador said.