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September 5, 2014

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Chile offers much for China, new envoy says

JORGE Heine, the new Chilean ambassador to China, told the media before he left for Beijing in July that his major tasks would be to attract more Chinese investors and tourists to Chile while further pushing the rapidly increasing bilateral trade, especially to extend opportunities beyond copper.

“Chile is the biggest exporter of copper in the world and the biggest producer, and China is the biggest importer and consumer,” Heine told Shanghai Daily during his visit to the city early in the week.

“That is very important and that will continue to be a very important link between Chile and China, but we would like to broaden that to other areas,” he says.

Since his arrival in July, Heine has been busy getting his foot on the ground all around the country to put the promises into action. Early in the week, he visited the city to speak at “Flavor of Chile,” the flagship export road show to promote Chilean products.

Chile is China’s third-largest trade partner in South America, and China has replaced the US to become Chile’s largest in the world since 2009.

In 2013, bilateral trade reached US$33.8 billion, up 7 percent from 2012. About three quarters of Chilean exports are in copper, while agricultural and associated products grew to 21 percent in 2013.

China’s trade with South American countries has risen significantly since it joined the World Trade Organization in 2001, and trade with Chile rose particularly steeply after 2005, since the two countries signed a Free Trade Agreement.

In 2013, Chilean exports to China totaled US$19 billion, about four times that in 2005, and China’s exports to Chile almost quintupled since 2005.

“This is the best argument for FTAs (Free Trade Agreements),” Heine says. “It shows that even though we are far away, you can still do a lot of trade. There is no country further from China than Chile, but just look at what we have achieved on both sides.”

Heine is also a strong advocate of free trade. He is well published in international media and has authored or co-authored 14 books on trade, globalization and related subjects.

“Chile is a great champion of free trade,” he says. “We believe all countries are better off if we trade more freely, but it is important to keep in mind that this is not just a question of opening the floodgates and letting everything and everybody come as they please.

“Globalization means that you have to be careful. It’s not just an open-and-shut case of lowering all tariffs and controls to zero and let the forces of supply and demand take control. One of the things China and Chile share is a commitment to an open economy but with the understanding that safeguards need to be kept in place so that your country is able to exercise a measure of control, and things do not get out of hand when disaster strikes.”

Heine is optimistic about future growth, especially in fresh food.

“Chile has a very significant presence in fresh food, and China, with its significant population and lack of water in many parts of the country, cannot produce enough agricultural products to cater to the needs of all of its population,” Heine says.

“So it is a very good match of supply and demand, as food imports in China are growing more rapidly. Chile will play a very significant role in providing for those needs. Our food export products go very well with each other. With salmon, fruits, wine, among other products, you can make a full meal out of them.”

Chilean wine has become the No. 3 seller in China for its quality and reasonable prices. Heine considers it a trademark that will induce Chinese consumers to put more trust in the quality and taste of Chilean food, especially fresh fruits.

Fresh fruits also match with the structural change in China’s food imports, which have shifted from largely grains and oils to other categories.

“One of Chile’s greatest assets is the very healthy conditions in which our food is grown,” the ambassador says. “We are very far away and we are isolated by the mountains and by the ocean, which means that many of the plagues that exist in other countries do not reach Chile. We also have very strict controls. And food security is something Chinese consumers are increasingly demanding.”

Direct foreign investment between the two countries is small compared with the enormous trade volume, a sector Heine is keen on improving during his term in China. With US$33 billion of trade value in 2013, the amount of Chinese investment in Chile was approximately US$300 million.

“There is a gap,” Heine says. “One of the main reasons is that Chile is a largely private economy rather than government-to-government investment projects, which was not something China went for. That is changing.”

He adds: “Chile has the best-performing economy in Latin America. It is doing well but we need more investment in energy and infrastructure. Precisely because the economy has been growing, there are unmet demands there, where Chinese companies can move into.”

Globalization also makes travel more convenient, especially for countries in different hemispheres like China and Chile. Only a very small percentage of the annual 3 million tourists to Chile come from China, as there are few programs and flights.

While Chinese already recognize the fascination of Easter Island and Antarctica, Heine has also been working with travel agencies and relevant institutions on promoting tourism, and he touts Chile’s geographically sophisticated landscape and anthropologically intriguing cultures.

“In the southernmost part of Chile, what we refer to as Chilean Patagonia, the area is laced with volcanoes and glaciers, and it is where the Andes Mountains flow directly to the sea. Many tourists refer to it as the world’s last frontier,” he notes.

Heine recommends his top priority — a cruise from Valparaiso or Puerto Montt meandering through the channels of southern Chile.

“For tourists who have seen everything, this is the ultimate destination,” he says.

He adds other highlights including the lake region, the province of Colchagua, where about two dozen vineyards are located, the ancient remnants of aboriginal civilizations including Incas, as well as the capital city Santiago and the port city Valparaiso.




 

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