SANTIAGO de CHILE, 13 April 2010: China will surpass the European Union and tail behind the United States as the region’s export market in the middle of the next decade, according to a report by the Economic Commission for Latin America and the Caribbean (ECLAC).
The report “The Popular Republic of China and Latin America and the Caribbean: Towards a Strategic Relationship” is a mainly graphic compendium that reviews trends in trade and investment between China and the region, providing some projections through the next 10 years.
If Latin American exports to its different market destinations continue rising as they have over the past 10 years, ECLAC estimates that midway through the next decade, China may be the second world destination of the region’s exports, buying 19,3 per cent of its total exports in 2020, up from 7,6 per cent in 2009.
The European Union will tend to keep its participation around 14 per cent, being surpassed by China as of 2015.
The rise of this export market will come at the cost of a persistent fall in exports towards the United States (from 38,6 per cent in 2009 to 28,4 in 2020).
The importance of China as an export market differs significantly within the region. It is a key market for Chile, Peru and Argentina, for example, but a much smaller one for exports from Central America, except Costa Rica. Mexican exports to China in 2009, for example, represented less than 1 per cent of its total exports.
Similar performance is expected in terms of Chinese imports, according to the report. China could surpasss the European Union and the United States by 2020 as origin of the region’s imports. This increase will concentrate mainly on the same capital goods that are already present in the region, such as electronic products, pieces and parts, machinery and textiles.
Some countries in the region depend significantly on China as a trade partner. Chile has the highest rates in this trade relationship, with 13 per cent of its exports going to China. It is followed by Peru (11 per cent), Argentina (9 per cent), Costa Rica (7 per cent) and Brazil (7%).
As for imports, Paraguay is an extreme case: 27% of its imports are from China. It is followed by Chile (11 per cent), Argentina (11 per cent) Brazil, Mexico and Colombia (10 per cent).
The region’s basket of exports to China continues concentrated on prime materials and their by-products, although the degrees of specialization vary. Costa Rica, Mexico and El Salvador, for example, sell China some high-technology manufactured products.
