Trade and Investment relations between Latin America and China … · 2011. 10. 14. · Union and...
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Trade and Investment relations between Latin America and China with special reference to agri-products Osvaldo Rosales Director International Trade and Integration Division ECLAC Agricultural trade linkages between Latin America and China Workshop FAO Rome, 27-28 September 2011.
Transcript of Trade and Investment relations between Latin America and China … · 2011. 10. 14. · Union and...
Trade and Investment relations between
Latin America and China with special reference to agri-products
Osvaldo Rosales Director
International Trade and Integration Division
ECLAC
Agricultural trade linkages between Latin America and China Workshop FAO
Rome, 27-28 September 2011.
I. China in the World Economy: Past, present and future.
116.3
48.3
9.3
7.5
20
0 20 40 60 80 100 120
1400
1820
1950
1975
2000
Year
Chinese Median Income Relative to Europe
China in 2010
• 2nd largest economy in the world (7th in 2000)
• 1st in export of goods worldwide
• 5th in export of services worldwide
• 1st in automotive market
• 1st in renewable energy market
• 1st producer of steel and ships
• 1st in world savings
• 2nd in scientific publications
The impact upon the world economy from China’s growth
• The center of gravity of the world economy is shifting towards emerging economies
– BRICS, G20
• China is the new global driver of the world’s growth – The income gap is narrowing: In the 90s, 12 countries of low- and medium-
income doubled the average growth of the OECD; In the 2000s, 65 countries contributed to growth.
• Reinforces South-South linkages – Sample of 20 developing countries…µY,G7=0.267; µY,China=0.37
– Relevance of South-South trade
• Engine to reduce poverty – Extreme poverty in the world falls from 41% in 1990 to 35% in 1996 to 26% in 2005
• Adverse implications for income distribution – Level of real wages for low-income workers drops 15%
China and India account for more than 1/3 of the world’s GDP growth during this decade and more than 2/3 growth during the global crisis.
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
2000-
2009
United States 20.3 11.1 14.5 15.8 16.4 15.3 11.5 8.8 3.0 -20.7 9.6
European Union 20.6 22.7 11.9 10.4 12.9 11.2 15.4 13.3 6.9 -33.5 9.2
Japan 4.5 0.6 0.7 2.8 3.9 3.0 2.7 3.0 -2.5 -13.0 0.6
Latin America and the
Caribbean 7.6 2.6 1.6 5.1 10.3 8.9 9.3 9.6 12.1 -7.2 6.0
China 12.4 27.6 25.3 23.7 18.4 21.9 22.9 27.0 36.2 61.6 27.7
India 4.3 6.3 5.9 7.3 6.4 8.6 8.4 8.2 10.1 15.6 8.1
Rest of Developing Asia 9.4 11.8 13.3 14.6 12.3 14.9 14.0 14.1 17.2 20.2 14.2
GDP annual growth 4.8 2.3 2.9 3.6 4.9 4.5 5.1 5.2 3.0 -0.6 3.6
12.449 27.614 25.347 23.680 18.401 21.858 22.867 27.044
36.245
61.568
27.920 31.111 4.264
6.260 5.897 7.320 6.416
8.586 8.443 8.227
10.054
15.578
11.311 10.639
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India China World annual growth (right)
Future Structure of world’s GDP (2004-2050)
(As a percentage of world GDP)
20 21 10
2 5
17 4
15
28
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4 34 25
15
28 27 26
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2004 2025 2050
United States
European Union
Japan
China
India
Other countries
China’s challenges in the global economy
• China is a key player in global macroeconomic stability and in global governance.
– Explains the 2003-2007 cycle and the current two-speed rate of recovery
– China’s contribution to global growth increases from 5% in 1980 to 12% in 2000 to 30% in 2010
– It’s weight in the global economy (PPP) increases from 2% in 1980, 3% in 1990 and 7% in 2000
• 14% in 2010 compared to 18% in the US
• 19% In 2017 compared to 18% in the US
• China vs. Prebisch: long-term deterioration of terms of trade
• Prebisch vs. China: central-peripheral
II. China-Lat. Am.: Main features of bilateral trade
China has become a very important trading partner for some countries in the region particularly with respect to imports.
A. Exports B. Imports
Source: ECLAC based on data from COMTRADE
LATIN AMERICA AND THE CARIBBEAN: ASIA-PACIFIC AND CHINA’S PARTICIPATION IN TRADE, 2010 (In percentages of total imports and exports of each country)
0 10 20 30 40 50 60
Nicaragua Bahamas Grenada
St. Vincent and the Grenadines Belize
El Salvador Saint Lucia
Saint Kitts & Nevis Jamaica
Guatemala Mexico
Trinidad and Tobago Paraguay Suriname
Haiti Barbados Dominica
Guyana Ecuador
Honduras Dominican Republic
Bolivia, Plur. St. of Costa Rica Colombia
Panama Uruguay
Venezuela, Bol. Rep. of Argentina
Lat. Am. & Caribbean Brazil Peru Chile Cuba
China Others Asia /a
9.1
0 10 20 30 40 50 60
Nicaragua Saint Lucia
Saint Kitts & Nevis Grenada
Honduras Trinidad and Tobago
Barbados Bahamas
Jamaica Belize
El Salvador Panama
Costa Rica Guatemala
Mexico Guyana
Haiti Dominica
Ecuador Suriname
Bolivia, Plur. St. of Venezuela, Bol. Rep. of
Dominican Republic Lat. Am. & Caribbean
Cuba Uruguay
St. Vincent & the Grenadines Colombia Argentina
Brazil Chile Peru
Paraguay
China
Others Asia /a
13.0
In eight short years, China’s importance as a trading partner for Latin America has increased significantly.
Destination of Exports Source of Imports
2000 2008 2000 2008
Argentina 6 2 4 3
Brazil 12 1 11 2
Chile 5 1 4 2
Colombia 35 4 15 2
Peru 4 2 13 2
Venezuela 37 3 18 3
Costa Rica 26 2 16 3
Mexico 25 5 6 3
Cuba 5 2 5 2
China has a presence in 21 Latin American nations
• Top 5 in 10 countries
• Top 1-2- in 6 countries
… in almost 32 markets
• Top 5 in 23 countries
• Top 2 in 5 countries
Latin America and the Caribbean (16 countries): Share of the main destinations in total exports, 2000-2020 (In percentages)
Source: Economic Commission for Latin America and the Caribbean (ECLAC), based on data from the COMTRADE database and national sources. Notes: The 16 countries are: Argentina, Bolivia (Plurinational State of), Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Panama, Paraguay, Peru, Uruguay, Venezuela (Bolivarian Republic of). Estimates and projections based on GDP growth rates for the years 2000-2009 in the United States, European Union, China, Latin America and the Caribbean, Asia-Pacific, and the Rest of World. A growth rate of trade which converges to the economies' long-term growth rate is expected.
Latin America and the Caribbean (16 countries): Share of the Main Sources of Total Imports, 2000-2020. (In percentages)
Source: Economic Commission for Latin America and the Caribbean (ECLAC), based on data from the COMTRADE database and national sources. Notes: the 16 countries are: Argentina, Bolivia (Plurinational State of), Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Panama, Paraguay, Peru, Uruguay, Venezuela (Bolivarian Republic of). Estimates and projections based on GDP growth rates for the years 2000-2009 in the United States, European Union, China, Latin America and the Caribbean, Asia-Pacific, and Rest of World. It is expected a growth rate of trade which converges to the economies' long-term growth rate.
Recent features of trade between China and Latin America
• Trade is concentrated in few countries and few products
– Brazil, Chile and Argentina account for 77% of exports
– Copper (30%) and Soy (12%)
• In each country, few products (2-3) make up 80-90% of exports to China (with the exception of Brazil and Mexico)
• They are basic products that are not technologically intensive or knowledge-based (with the exception of Mexico and Costa Rica)
A. Latin America: Main Exports to China
(% of total exports to China)
Countries
Main products SITC Rev. 2-4 digits (Share greater than 5%) No. of Products % of Total
Argentina Soybeans (47.6%), Soy oil (30.9%), Petroleum (5.6%) 3 84.10%
Bolivia Tin concentrate (88.4%) 1 88.40%
Brazil
Iron concentrate (26.6%), Soybeans (24%), Iron ore
agglomerates (6.4%), Soy oil (6.2%) 3 56.80%
Chile
Copper (54.2%), Copper concentrate (24%), Wood pulp
(9.3%) 3 85.20%
Peru
Fish flour not for human consumption (32.9%), Copper
(26%), Iron concentrate (9.8%), Iron alloys (7.0%), Copper
alloys (5.1%) 5 79.90%
Costa Rica Electronic micro assemblies (92.4%) 1 92.40%
Mexico
Electronic accessories (15.1%), Microcircuits (15.3%),
Cooper concentrate (6.2%), Iron Pic (5.8%), Other non-
ferrous waste and scrap (5.4%) 5 47.80%
Guatemala
Raw Sugar cane (46.6%), Other non-ferrous waste and
scrap (36.2%), Refined sugar (6.5%) 3 89.30%
Cuba Sugar cane (85.5%), Copper (13.5%) 2 99.00%
Latin America and the Caribbean’s exports to the United States present a larger share of manufactures than the region’s exports to the European Union and China Latin America and the Caribbean: breakdown of exports to selected partners by technological intensity, 1980-2009 (Percentages of total exports)
A. Latin America and the Caribbean (intraregional trade) B. United States
C. European Union D. China
Source: Economic Commission for Latin America and the Caribbean (ECLAC) on the basis of COMTRADE database.
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Technological intensity of Latin American and Caribbean exports
US EU AP
Primary products
26% 46% 59%
NRBM 12% 29% 24%
LTM 11% 5% 3% Higher quality of exports directed to
US markets
MTM 30% 15% 9%
HTM 19% 4% 5%
LAC exports more products to the United States than to the European Union and Asia. The highest number of products is exported to the region itself.
Latin American and Caribbean countries: number of products exported to selected markets, average 2008-2009 (Calculated on Harmonized System at 6 digit level)
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of COMTRADE database.
Latin American
and the Caribbean
United States China
Argentina 3858 1 716 529
Bolivia (Plu. St. of) 682 353 41
Brazil 3 997 2 853 1 185
Chile 3 131 1 379 315
Colombia 3 321 1 809 161
Costa Rica 2 558 1 533 181
Dominican Republic 1 174 1 172 82
Ecuador 1 795 1 046 67
El Salvador 2 493 1 019 37
Guatemala 3 351 1 515 183
Honduras 1 842 1 000 101
Mexico 3 920 4 163 1 143
Nicaragua 1 804 885 39
Panama 294 187 25
Paraguay 1 003 228 62
Peru 2 914 1 737 248
Uruguay 1 479 437 116
Venezuela (Bol. Rep. of) 2 095 533 114
Caribbean 955 825 28
Latin America and the
Caribbean
2 026 1 222 215
Recent features of trade between LAC-AP
• Trade ties with China and Asia-Pacific are different among the regions.
– They are of a complementary nature and South America has a slight surplus.
– Substitutions and deficits in Mexico and Central America
• High asymmetries between elevated trade flows and low reciprocal investment
• Trade with China is excessively of an inter-industrial nature.
– Lat. Am. exports raw materials and imports manufactures.
– Less room for diversifying exports
– Productive and technological alliances are more difficult.
Exports, imports and trade balance with China (In millions of dollars)
Source: ECLAC on the basis of COMTRADE data, official data and DOTs (IMF).
China is one of the main recipients of FDI and has also begun investing abroad. Latin America has become an important destination but China invests primarily in fiscal
paradises.
Asia-Pacífic
68.7%
Africa3.8%
Europe3.8%
Latin America
and the Caribbean
21.0%
North America
2.7%
Chinese FDI abroad, outward 2003-2007
Chinese FDI abroad, stock 2007
Country Value %
Cayman Islands 16,810.7 67.8
British Virgin Islands 6,626.5 26.7
Brazil 185.6 0.7
Argentina 157.2 0.6
Mexico 151.4 0.6
Venezuela (Bol. Rep. of) 143.9 0.6
Peru 137.1 0.6
Bermuda 105.8 0.4
Guyana 68.6 0.3
Cuba 66.5 0.3
Suriname 65.3 0.3
Chile 56.8 0.2
Bahamas 56.5 0.2
Panama 55.3 0.2
Ecuador 49.2 0.2
Bolivia 23.0 0.1
St Vincent & the Grenadines 20.8 0.1
Colombia 6.8 0.0
Uruguay 2.1 0.0
Honduras 0.9 0.0
Others 16.7 0.1
Main destinations in Latin America and the Caribbean
stock 2007
Source: Ministry of Commerce of People’s Republic of China, 2007 Statistical
Bulletin of China’s Outward Foreign Direct Investment
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North America
Europe
Africa
Latin America & Caribbean
Asia-Pacífic
III. China-Latin America: Agricultural Trade
Latin America is an important agricultural producer worldwide, particularly in soya, meat and milk
WORLD DISTRIBUTION OF AGRICULTURAL AND LIVESTOCK PRODUCTS, AVERAGE 2007-2009
(In percentages of world total and in millions of tons)
Source: Economic Commission for Latin America and the Caribbean (ECLAC) based on data from the
United Nations Food and Agricultural Organization (FAO), database FAOSTAT [online]
http://faostat.fao.org/default.aspx
Fruits and Vegetables
Corn Rice Soya Wheat Meat Milk
Latin America 11.9% 16.5% 4.0% 48.1% 4.2% 31.1% 23.1%
European Union 8.4% 7.0% 0.4% 0.3% 20.7% 2.0% 1.6%
Asia-Pacific 5.9% 4.3% 28.2% 0.7% 2.9% 7.1% 4.1%
United States & Canada 4.5% 41.2% 1.4% 37.9% 13.1% 17.3% 23.4%
Rest of the World 69.3% 31.1% 66.0% 13.0% 59.1% 42.5% 47.8%
Total (In millions of tons) 4515.4 2432.8 2021.4 672.4 1977.9 830.2 2069.9
China plays an important role in global production and consumption of agricultural products. This is unalike imports where only soya grains are notable.
Source: ECLAC based on data from the United States Department of Agriculture and EIU World Commodity Forecast.
16.464
20.795
29.964
7.332
21.449
20.476
34.183
9.001
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Wheat
Corn
Rice
Soya, grain
Soya, flour
Soya, oil
Cotton
Sugar
World Production
China
.351
53.259
27.915
23.310
0 10 20 30 40 50 60
Wheat
Corn
Rice
Soya, grain
Soya, flour
Soya, oil
Cotton
Sugar
World Imports
China
16.515
19.905
29.943
23.279
20.846
26.446
38.767
9.209
0 10 20 30 40 50
Wheat
Corn
Rice
Soya, grain
Soya, flour
Soya, oil
Cotton
Sugar
World Consumption
China
Between 2000 and 2010, China’s imports of agricultural and livestock products grew at an annual rate of 20.3%. Its exports grew at an even faster rate and reached 19% in 2000 and 28% in 2010 -- an all-time high of 33% was recorded in 2008.
10 000
20 000
30 000
40 000
50 000
60 000
70 000
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Mundo América Latina y el Caribe
Source: ECLAC based on data from COMTRADE and United Nations Statistics Division.
Note: Category 1.1 cited using CEPAL based on Lall’s Trade Intensive Classification.
China: Agricultural and livestock imports, 2000-2010
(In millions of dollars)
World Latin America and the Caribbean
Notwithstanding, the region’s exports face strong competition from the United States, Asia-Pacific and Africa’s increasing importance.
Source: ECLAC based on data from COMTRADE and United Nations Statistics Division.
Note: Category 1.1 cited using CEPAL based on Lall’s Trade Intensive Classification.
China: Agricultural Imports, 2000-2010
(In millions of dollars and percentages) Import Values Rates of Growth
2000 2005 2010 2005 2010 Africa 189 1 052 1 546 40.9% 23.4% Latin America 1 900 6 294 17 224 27.1% 24.7% Asia-Pacific 3 042 6 387 15 822 16.0% 17.9% United States 2 374 6 452 17 809 22.1% 22.3% European Union 726 1 095 2 465 8.6% 13.0% Rest of the World 1 639 3 634 7 853 17.3% 17.0% World 9 870 24 914 62 720 20.3% 20.3%
19.2% 25.3% 27.5%
30.8% 25.6% 25.2%
24.1% 25.9% 28.4%
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Rest of the World European Union
United States Asia-Pacific
Latin America and the Caribbean Africa
Three countries account for 92% of the region’s agricultural and livestock exports of which 90% are made up of 2 products.
Source: ECLAC based on data from COMTRADE and the United Nations Statistics Division.
Note: Category 1.1 cited using CEPAL based on Lall’s Trade Intensive Classification.
Brazil 54%
Argentina 31%
Peru 7%
Uruguay 3%
Chile 4%
Rest of the region
1%
China: Ranking of Agricultural Products Imported from
Latin America, Annual Average, 2006-2010
(In millions of dollars and percentages of total)
China: Agricultural Imports
from Latin America , 2006-
2010
CUCI Rev. 2 Argentina Brazil Chile Peru Uruguay Sub-group %
Oil Seeds and Oleaginous Fruits 3,446 5,939 3 299 9,687 20.1Feeding Stuff for Animals 24 10 246 715 14 1,010 2.1
Tobacco, Unmanufactured 42 323 364 0.8
Bovine Meat 144 184 17 12 358 0.7
Fruits and Nuts 1 1 124 11 4 141 0.3Wool 24 - 7 14 48 93 0.2
Cotton 2 81 1 - 83 0.2Crustaceans, Molluscs &
Acquatic Invertebrates 17 - 5 49 6 76 0.2
Fish 9 - 38 4 6 56 0.1Crude Vegetable Materials 1 5 31 13 - 50 0.1
Hides & Skins, Raw 2 - 1 1 15 18 0.0
Milk Products 9 - 2 2 13 0.0Vegetables - - - - - 0.0
Total Agriculture 3,721 6,543 473 808 406 11,951 24.7Total Rest 2,380 18,956 11,110 3,678 218 36,342 75.3
Total Imports 6,101 25,499 11,583 4,486 624 48,293 100.0
Agricultural and livestock products are concentrated in South America and only in a few categories.
Source: ECLAC based on data from COMTRADE and the United Nations Statistics Division.
Note: Standard Intenational Trade Classification Revision 3 to 4 dígits.
Statistics were compiled using China as the source.
Product labels were adapted to fit available space.
Top 5 First Second Third Fourth Fifth
Argentina 92.0% Soya beans, 53.1 Soya bean oil, 26.5 Crude petroleum, 7.47 Other bovine leather, 2.48 Poultry, 2.33
Bolivia (Plur. St. of) 75.9% Tin and tin alloys, 23.9 Tin ores and concentrate, 22.0 Crude petroleum, 12.6 Non-coniferous wood, 9.96 Precious metals, 7.14
Brazil 82.2% Iron ores and concentrate, 44.9
Soya beans, 24.2 Crude petroleum, 5.86 Iron ore agglomerates 4.12 Chemical wood pulp, 3.03
Chile 92.3% Copper, 55.4 Copper ores and concentrate, 24.2
Chemical wood pulp, 6.67 Iron concentrate, 3.53 Flour, inedible, 2.40
Colombia 97.6% Crude petroleum, 53.8 Other ferro-alloys, 36.5 Other non-ferrous waste and scrap, 4.01
Other leathers, 2.37 Polymers of propylene, 0.83
Costa Rica 98.4% Integrated circuits, 96.3 Semiconductors, 0.93 Piezoelectric crystals, 0.55 Apparatus for circuits, 0.25 Electrical resistors, 0.23
Ecuador 98.4% Crude petroleum, 94.7 Other non-ferrous waste and scrap, 1.50
Non-coniferous wood, 1.32 Flour, inedible, 0.52 Other plastic scraps, 0.36
El Salvador 96.1% Condensers, 53.6 Other non-ferrous waste and scrap, 35.7
T-shirts, 3.90 Other plastic scraps, 1.97 Textile fabrics impregnated, 0.82
Guatemala 94.8% Sugar, 59.1 Zinc concentrate, 13.5 Other plastic scraps, 10.3 Other non-ferrous waste and scrap, 10.2
Ethylene scrap, 1.56
Honduras 92.7% Zinc ores and concentrate, 35.6
Lead ores and concentrate, 26.6 Other non-ferrous waste and scrap, 19.5
T-shirts, 5.89 Other plastic scraps, 4.93
Mexico 37.0% Integrated circuits, 14.0 Copper ores and concentrate, 9.99
Telecommunications parts, 4.74 Semiconductors, 4.22 Parts for machinery, 4.04
Nicaragua 82.4% Other non-ferrous waste and scrap, 34.4
Other plastic scraps, 20.9 T-shirts, 12.7 Fish, preserved, 8.72 Ethylene scrap, 5.48
Panama 83.9% Ships and boats, 44.8 Other leather, 16.5 Flour, inedible, 13.1 Fish, frozen, 4.81 Non-coniferous wood, 4.51
Paraguay 86.2% Other bovine hides and skins, 31.6
Non-coniferous wood, 28.5 Other plastic scraps, 9.93 Other non-ferrous waste and scrap, 9.35
Sesame seeds, 6.67
Peru 80.8% Copper ores and concentrate, 38.6
Flour, inedible , 15.7 Lead ores and concentrate, 10.3 Iron ore and concentrate, 8.68 Zinc ore and concentrate, 7.30
Uruguay 84.3% Soya beans, 45.1 Chemical wood pulp, 23.1 Carded wool, 7.45 Wool, greasy, 5.69 Other bovine leather, 2.78
Venezuela (Bol. Rep. of)
98.2% Crude petroleum, 8.3 Steel ores and concentrate, 13.5 Ferrous products, 4.89 Artificial fibres, 0.81 Other non-ferrous waste and scrap, 0.50
CARICOM 69.0% Monohydric alcohols, 18.1 Alumina (Aluminium Oxide), 16.9
Non-coniferous wood, 13.1 Other non-ferrous waste and scrap, 12.1
Natural liquid gas, 8.53
Latin America : Five principal products exported to China, Average 2007-2009
The trade surplus China has with nearly all countries in the region with respect to manufactures is countered by basic products in South America especially, in the agricultural and mining sectors.
Source: ECLAC based on data from COMTRADE and the United Nations Statistics Division.
Note: ECLAC based on Lall’s Trade Intensive Classification.
(a) Includes natural resource-based manufactures.
Livestock Mining Hydrocarbons Manufactures
Argentina -18 528 - 346 -2 922 11 498
Bolivia (Plur. State of) - 3 - 288 - 42 400
Brazil -31 920 -63 135 -9 600 53 208
Chile -2 273 -17 899 … -11 099
Colombia 155 - 414 -2 753 10 391
Costa Rica 54 1 … -9 319
Ecuador 12 1 -2 143 5 477
El Salvador 8 … … 1 629
Guatemala 27 -15 - 24 3 936
Honduras 8 -133 … 1 284
Mexico 411 -3 696 - 583 48 034
Nicaragua 6 … … 1 099
Panama 2 1 … 35 735
Paraguay - 26 … … 2 975
Peru -4 009 -15 282 -1 176 9 126
Uruguay -2 030 - 4 … 3 264
Venezuela (Bol. Rep. of ) 340 -2 315 -11 782 4 746
China: Balance of Trade with Latin America and the Caribbean by Sector
2006-2010 Accumulated
(In millions of dollars)
The region’s primary products have a strong presence in China’s imports but face strong competition from the rest of the world particularly, from the United States.
Source: ECLAC based on data from COMTRADE and the United Nations Statistics Division.
Note: China’s imports from countries.
SITC Revision 2 Argentina Brazil Chile Peru Uruguay Subgroup Main Competitor World
011 Bovine meat 8.6 10.9 1.0 0.0 0.7 21.2 United States 43.7 100.0
022 Milk Products 1.0 0.0 0.2 0.0 0.3 1.4 New Zealand 52.8 100.0
034 Fish 0.3 0.0 1.3 0.1 0.2 2.0 Russia 42.1 100.0
036 Crustaceans, Moslluscs and Aquatic Invertebrates
2.4 0.0 0.6 6.6 0.8 10.3 Canada 16.2 100.0
054 Vegetables 0.0 0.0 0.0 0.0 0.0 0.0 Thailand 54.1 100.0
057 Fruits and Nuts 0.0 0.1 9.7 0.8 0.3 11.0 Thailand 26.9 100.0
081 Feeding Stuff for Animals 1.3 0.5 12.8 37.2 0.7 52.5 United States 18.8 100.0
121 Tobacco, Unmanufactured 6.9 53.2 0.0 0.0 0.0 60.1 Zimbabwe 17.0 100.0
211 Hides and Skins, Raw 0.1 0.0 0.1 0.1 0.9 1.1 United States 47.9 100.0
222 Oil seeds and Oleaginous Fruits 19.2 33.1 0.0 0.0 1.7 53.9 United States 40.2 100.0
263 Cotton 0.0 2.0 0.0 0.0 0.0 2.1 United States 42.1 100.0
268 Wool 1.4 0.0 0.4 0.8 2.8 5.4 Australia 72.5 100.0
292 Crude Vegetable Materials 0.2 1.0 6.7 3.0 0.0 11.0 Indonesia 17.2 100.0
% of total imported from trade partner 12.2 5.1 0.8 3.6 13.0 4.9
> to 50% of world imports
> to 25% of world imports
> to 10% of world imports
> to 5% of world imports
China: Imports of Agricultural Products, 2006-2010
(In percentages of world imports by product )
The proliferation of FTAs in Asia – a direct competitor of Latin America and the Caribbean in agricultural products – puts the region at a disadvantage.
Source: ECLAC based on data from COMTRADE and the United Nations Statistics Division.
Nota: ECLAC based on Lall’s Trade Intensive Classification.
China: Composition of trade with ASEAN and Latin America and the Caribbean, 2006-2009
(Percentages of total)
Region Imports Exports
Primary Products ASEAN 6.8% 12.7%
LAC 17.0% 1.8%
Natural-resource based manufactures ASEAN 13.3% 11.3%
LAC 9.2% 6.0%
Low-technology manufactures ASEAN 6.3% 5.7%
LAC 1.8% 4.3%
Medium-technology manufactures ASEAN 6.0% 9.6%
LAC 1.1% 5.8%
High-technology manufactures ASEAN 17.0% 7.9%
LAC 1.3% 3.4%
China imports many primary products and natural resource-based
manufactures from ASEAN -- areas in which Latin America and the
Caribbean has a comparative advantage.
The region’s agricultural products face high tariffs in Chinese markets.
Source: ECLAC based on data from the WTO, World Tariff Profiles 2010.
China: Average MFN Applied Tariffs, Averages 2009
Types of Products Tariff imposed by China
All Products 9.6
Animal Products 14.8
Milk Products 12.0
Plants, Fruits and Vegetables 14.8
Coffee and Tea 14.7
Cereal Preparations 24.2
Oils and Vegetable Fat 10.9
Sugar and Confectionery 27.4
Alcoholic Beverages and Tobacco
22.9
Cotton 15.2
Other Agricultural Products 11.5
Fish and Fish Products 10.7 With lower tariffs, these trade flows could increase to the
detriment of Latin America.
Latin America and the Caribbean holds the largest reserves of fresh water in the world. Also, along with Sub-saharan Africa, it is the region with the greatest potential
for expansion of cultivable surface.
Lat. Am.
& the
Caribbean
34%
EU
4% Asia-
Pacífic
28%
United
States and
Canada
10%
Rest of the
World
24%
WATER RESERVES, BY REGION CULTIVABLE SURFACE IN USE, BY
REGION
0 20 40 60 80 100 120 140 160
Central and South America
Sub-Saharan Africa
World
North America
Europe
North Asia, E of Ural Mtns.
Asia-Pacific
Africa and the Middle East
IV. China-Latin America: Is there room for a strategic relationship?
China and Latin America’s interests
China • Energy, raw materials, food
• Limit Anti-Dumping allegations
• Prevent diversion of trade that may affect it
• Engage in profitable projects
• South-South alliances and global governance
Latin America • Access to a large market with
positive growth potential
• Attract Chinese FDI
• Partnerships between Chinese and Latin American businesses
• Participate in Asia supply value chains
• Invest in China and Asia-Pacific
Main Issues • China is more important for South America’s growth
than the United States.
• Positive cycle for international prices for commodities for the remainder of the decade
– Possibility of a “super cycle”
– Risk: excessive support for commodities with low value added, monetary exchange delays, obstacles for export diversification and productive transformation
– Challenge: Take advantage of the opportunities
• “Dutch Disease?” The curse of natural resources?
• New central-peripheral cycle in the XXI century?
Challenges and Proposals
1. Diversify exports destined for China and Asia-Pacific
2. Tie the approach towards Asia-Pacific with a domestic agenda of innovation and competitiveness
3. Take advantage of a favorable cycle in natural resources to invest in infrastructure, training, innovation and reforms that will stimulate productivity and the business environment
Challenges and Proposals
4. Presence in the supply value chains linked to exporting natural resources to Asia-Pacific (knowledge intensive segments)
5. Latin American investment in China and more Chinese investment in Latin America (manufactures and infrastructure)
1. Telecommunications (Huawei, ZTE)
2. Automotive(BYD, Chery, Geely)
6. Overcome transportation and economic costs, long delivery times, infrastructure and logistic, air travel connections.
Challenges and Proposals
7. Mutually agreed upon agendas at the regional (or sub-regional) level to address China and Asia-Pacific
– Agreed upon by Latin American governments, by and between the government agencies of each country and by and between governments and private actors.
8. Formalize the dialogue between Latin America and China and Asia-Pacific
– China holds Summits with Asia, Africa and Europe
– Who will take the next step?
• China has already taken the next step (White Book)
Latin America’s Challenges
Diversify Exports
Invest in China
Participate in Asian supply value chains
Establish a cohesive policy on China
Work towards a China-Latin America
Summit.
China’s Challenges
Increase FDI in Latin America
Funds to support SMEs which
export
Technological Cooperation
Understand political-institutional
aspects of Latin America
Joint Challenges
Improve dialogue between Ministries of
Commerce (trade defense)
Identify joint opportunites in China, Asia and
Latin America
Trade, investment and technological
business partnerships
Create a forum for an ongoing dialogue
-Good practices in public policy
-The Doha Round
-Environment and Climate Change
Trade and Investment relations between
Latin America and China with special reference to agri-products
Osvaldo Rosales Director
International Trade and Integration Division
ECLAC
Agricultural trade linkages between Latin America and China Workshop FAO
Rome, 27-28 September 2011.
