BY JOACHIM BAMRUD
Last week, Chinese President Hu Jintao signed a series of deals with his Peruvian counterpart, Alan Garcia, aimed at boosting business ties between the two nations. "Both leaders delivered flattering reciprocal comments and highlighted pleasing progress on negotiations on a free-trade agreement," U.S.-based consultancy Global Insight said in a commentary on Friday.
The two countries hope to finalize a free trade agreement by November, when Peru is hosting the Asia-Pacific Economic Cooperation (APEC) summit. Peru aims to increase its exports to China five-fold by 2015, Garcia told reporters Friday. Even without the free trade agreement, China's trade with Peru is soaring and the Asian nation is now Peru's second-largest export market after the United States. Peru is Latin America's fourth-largest exporter to China, according to a Latin Business Chronicle analysis of 2007 data from China's Ministry of Commerce. Meanwhile, thanks to two-way trade growing by 53.6 percent last year to $6.0 billion, Peru has replaced Venezuela as China's fifth-largest trading partner in Latin America. Peru's exports to China are dominated by mining – 95 percent - while Chinese imports are essentially valued-added products, according to Global Insight.
BOOMING LATIN TRADE
Peru is not the only country boosting its trade with China. Across the region, trade is growing by double-digits and even triple-digits in several cases. Total trade between China and Latin America reached a record $102.6 billion last year, an increase of 46.2 percent from 2006. Three nations alone – Brazil, Mexico and Chile – account for nearly 60 percent of that total, our analysis shows. In Chile, China last year replaced the United States as the country’s top export market. Chile’s exports to China in 2007 were 17.9 percent higher than those to the United States, according to government agency ProChile.
Unlike the United States, Latin America has a minor trade deficit with China. In fact, five of Latin America’s top seven economies – including Brazil and Argentina - last year posted a surplus in trade with China, according to the Latin Business Chronicle analysis. Also Costa Rica, the second-largest economy in Central America and China’s largest trade partner in that region, posted a surplus.
Brazil posted the strongest growth in trade with China in real terms last year – a whopping $9.4 billion. Chile, Argentina and Mexico followed with...
Keywords: Andes Petroleum Co, Argentina, Booz Allen Hamilton, Brazil, Chery, Chile, Colombia, Costa Rica, CSM, Cuba, Diaz Reus Rolff & Targ, Ecuador, Excel Automotriz, FAW, Grupo Elektra, Jinchuan Group, Mexico, Panama, Uruguay, Venezuela