Latin America offers way out of demand doldrums

Region holds 'good opportunities' as weakness in mature markets persists

As the demand from developed markets, especially the European Union, decreases sharply, Chinese companies should be encouraged to export goods to Latin America, says Yang Wanming, Chinese ambassador to Chile.

"Latin America is now a strategically important market for China ... especially amid the European debt crisis," he said.

While China's foreign trade with some developed economies remained weak in 2012, "the rate of increase between China and Latin America ranged from 12 to 15 percent. That's a remarkable rate," he added.

According to the General Administration of Customs, China's exports from January to November last year surged by 7.3 percent year-on-year, down sharply from the year-on-year growth of 21.1 percent in the same period of 2011.

In the first 11 months of 2012, China's foreign trade increased by 5.8 percent from a year earlier, well below the central government's target of 10 percent for the year.

The deceleration was largely a result of the European debt crisis, which has dampened demand in the EU, China's chief trade partner. In November, China's exports to the EU fell by 18 percent from a year earlier, showing their sixth straight monthly decline.

Yang said Latin American countries can "provide Chinese companies good opportunities to increase their exports".

"Latin America is highly market-oriented," he said. "Various countries, led by Brazil, Mexico and Chile, have seen their economies grow rapidly during the past few years."

The International Monetary Fund predicted Peru, Chile and Brazil will show the strongest economic growth among Latin American countries from 2013 to 2017. Peru's economy is expected to grow by 6 percent during the period, Chile's by 4.6 percent and Brazil by 4.1 percent.

In 2011, Brazil, the largest economy in Latin America, surpassed the United Kingdom to become the world's sixth largest economy. It is expected to be the world's third-largest automobile market by 2015.

The Brazilian government recently predicted China will become its largest source of imports this year.

"The value of China-Brazil trade is expected to surpass $80 billion this year," said Yang.

China has signed various free trade agreements with Latin American countries, including Chile and Peru.

From January to August, China's exports to Peru increased by 16.5 percent, and to Chile, by 15.5 percent, according to the Ministry of Commerce.

Yang noted that China-Chile trade stood at $2.1 billion in 2001 and has since shown an annual growth rate of 30 percent, hitting more than $34 billion in 2011.

"Three years ago, we didn't see any Chinese cars in the streets of Chile," he said. "But now, Chinese car makers hold a 12 percent share of the market. It's an amazing change, isn't it?"

Experts say Latin America complements China in many ways.