In a recent report published by the Economic Commission for Latin America and the Caribbean (ECLAC) in November 2023, the growing trade relationship between China and Latin America is highlighted. The report, entitled “International Trade Outlook for Latin America and the Caribbean 2023. Structural changes and trends in global and regional trade: challenges and opportunities” was presented by Sebastián Herreros at the seminar on The Belt and the Road Initiative organized by ICLAC and the Embassy of the People's Republic of China in Chile.
The second chapter of the report delves into the analysis of the trade relationship between Latin America and the Caribbean with China from 2000 to 2022, to present a balance and perspectives of its evolution.
Regarding the growth of bilateral exchange between both regions, the report indicates that trade in goods increased by a magnitude of 35 in this period, reaching almost 500 billion dollars. China has positioned itself as the region's second-largest trading partner, contributing 13% of its exports and 22% of its imports. Latin America, in turn, has increased its participation in Chinese international trade, especially in primary products.
In relation to the composition and concentration of regional exports to the Asian country, these are dominated by primary products such as soybeans, copper, iron ore, oil and beef, representing 75% of the total. It should be noted that the concentration of exports to China is observed in a small group of Latin American countries, with Brazil, Chile, Peru and Argentina being the main exporters to China.
As the report highlights, the trade relationship with China has generated opportunities and challenges for the integration of the region. While China has become an essential supplier of intermediate and capital goods for regional industries, as well as a strategic partner for the development of sectors such as renewable energy and electromobility, Chinese competition has negatively affected the employment and production of some manufacturing sectors, especially those concerning low and medium technology.
Finally, despite the growing commercial link between Latin America and China, limited progress is observed in the number of trade agreements signed with China, where only Chile, Peru, and Costa Rica maintain free trade agreements with the country, while other countries negotiate or explore the possibility of doing so.
The study offers a detailed view of the growing relationship between Chile and Latin America, highlighting the opportunities and challenges it presents for the region. In a context where China continues to position itself as a world power, Latin America must be prepared to capitalize on the opportunities and proactively address the challenges that this trade relationship poses.
During his seminar presentation, Herreros also gave some recommendations such as attracting Chinese FDI towards strategic natural resource processing activities, such as lithium, to generate subsequent linkages with manufacturing activities, such as batteries and electric vehicles.