Chile proactive on China

Over a year has passed since China launched its first free trade agreement signed with a single country; in this case, Chile. And just as an expectant couple awaits with the arrival of a baby to brighten their days, the Chilean export sector should be satisfied with the results achieved thus far from the Chile-China FTA.

Everything seems to suggest that we are on track to surpass the $10 billion mark in bilateral trade with China. This will further solidify our position as China’s third largest trading partner in Latin America, after Brazil and Mexico. Once the current negotiations on services and investment are concluded, the possibilities can only increase.

The positive results achieved, in terms of trade, will certainly contribute to a growing interest in Chile among Chinese investors. Not to mention, these investors will contribute more to our development through their participation in infrastructure projects. In fact, a few months ago the first delegation of engineers from the firm CITIC arrived, in order to ascertain details regarding a power plant which will supply the mining sector in Antofagasta.

Though citing all the “firsts” in the successful history of China-Chile cooperation (recognition of the PRC in 1970; free market economy, entry into the WTO, etc.) has become repetitive, there is also a thirst to make a qualitative and quantitative leap in this relationship. There is a desire both to diversify the spectrum of Chilean exports and increase the quality of Chinese imports. With an increase in capital goods from China, we should make inroads on improving the interconnectivity between China and Chile.

Rest assured, Chile is not standing idly by in the face of this tremendous challenge.

Even as our consumers now buy Chinese T-shirts, pants and plasma TVs produced in China without thinking twice (80% of our clothing sales are Chinese imports), so China buys our copper, molybdenum, iron, iodine and cellulose without a second thought.

Both societies aspire to greater things as regards our bilateral synergy; not only in commodities and consumer goods, but through technology, innovation and creativity. When planning our bilateral agenda for the future, these shared goals make the whole process more attractive and motivating. In fact, this positive outlook may have positive repercussions throughout South America.

Because, if Chile is so strong in the wine sector, why don’t we produce in China for the Asian market? If China is so clearly a leader in prefabricated, low-cost homes, why not encourage Chinese companies to participate in the design and construction of housing for low income housing in Chile? If China is the world’s leader in sports venue construction, why not involve them in the construction of our bicentennial stadium projects. If Chile has overcome desertification challenges through non-traditional agriculture, why not start a program to assist in combating desertification and lack of arable land in China?

To be fair, Chile is identifying areas for joint investment with Chinese entrepreneurs in Chile in order to propel their products, not only into the domestic market but beyond into Chile’s network of FTA partners (Canada, the European Union, the EFTA, etc.). This topic will definitely be on the agenda at the next Chile-China Business Council forum, slated for September in the port city of Xiamen.

China has a great deal of investment capital in its major financial institutions, which are interested in contributing to the internationalization of engineering capabilities. These firms will provide added-value to the development of infrastructure and technologies applicable to the strengthening of SME exporters, protecting the environment or the implementation of alternative sources of energy, particularly solar and wind. More than ever, we are identifying and encouraging these companies to conduct feasibility studies in Chile, with a view to having them as partners on a shared path to development.

Certainly, ProChile’s having chosen Shanghai (host of the 2010 World Fair, where Chile will have a booth supporting the "Harmonious Cities" theme) as one of the five urban focus areas for its 2007 "National Image" campaign, has been a tremendous incentive for Chile to be increasingly present in other Chinese cities where middle income populations are growing. This stratum in China is beginning to demand quality products, allowing them to raise their image as consumers in a globalized market. There are tens of millions of potential wine, salmon and fruit consumers in nearly 16 cities. These consumers are mainly located in coastal areas, but are also found in central China, in Chongqing, or Chengdu out west. Chile is gaining ground in those areas also, through the campaign entitled "Chile: A close partner" (Chile, Un Socio Cercano, in Spanish).

Young people cannot remain outside the leap being undertaken by Chile in China. Finance Minister Andrés Velasco announced the government would be supplying postgraduate funding to the handful of recently graduated university students who have benefited from scholarships or financial support for Chinese language studies. He made the announcement when releasing the administration’s new Asia-Pacific agenda. The Manuel Bulnes Scholarship, named in honor of the president who opened Chile’s first trade office in China (1845), will fund graduate studies for academics in China and Asia. At the same time, one cannot fail to mention the significant contribution Andronico Luksic has made. His scholarship funds study at Tsinghua University in Beijing and the Pontificia Universidad Católica de Chile.

Chile is working to boost interaction between more than 18 sister cities, too. It is productive to bring bilateral relations down to a human scale, showcasing our regions and cities. For example, if Qindao, tenth largest container port in the world and main area where seafood products are processed, is a sister city to Puerto Montt, which exports the largest volume of salmon and trout, this partnership would promote the sale of salmon and other seafood in Qingdao. Why not invest in fisheries in Qingdao, which would be used for salmon production? This aims to focus our efforts at a grass-roots level.

Lastly, it is useful to refer to a convergence of principles as Chile and China meet at multilateral forums such as APEC and, in particular, where "Nation Building" is concerned. Nation building cooperation by China and Chile in Haiti, a people ravaged by decades of poverty and violence, can finally build the foundation that will enable them to overcome poverty and underdevelopment. This is certainly one of the most important examples of a relationship that goes beyond trade in commodities; a friendship that seeks to use every window of opportunity via a process of globalization in which the harmonious development of their societies must take precedence.

Succeeding in China requires knowledge and patience to get involved in all its rich dimensions. In that sense, Chile is gradually turning a solid relationship into a more innovative, creative and multidimensional one. As the days pass and the FTA is close to its one-year anniversary more actors are joining this select group of entrepreneurs, committed to playing a role in the efforts required to give strengthen our bilateral relationship. It seems that nobody in Chile wants to be left behind in this task with China. Forward, march!