MercoPress. South Atlantic News Agency

Latinamerica looks to China to increase trade and investments

Latinamerica is hopeful that an increase in trade with China and investments from the Asian giant will help compensate lost business with the United States and the European Union because of the global crisis.

The issue was addressed in this week’s World Economic Forum on Latinamerica which took place in Rio do Janeiro and dedicated a full day of discussions to China.

“The current crisis opens an adequate space and moment for Latinamerica to improve relations with the Asian giant making Beijing a privileged trade and investment partner for the region” said Bruno Ferrari from Mexico’s Trade Promotion Office.

According to figures released during the Forum, bilateral trade of the region with China increased eightfold in the last eight years and investment in the region, still not significant, is expected to begin to increase.

In the first eight months of 2008 bilateral trade reached 111.5 billion US dollars, which is 52% higher than the same period a year ago. While exports from China increased 48.9% to 54 billion US dollars, Latinamerican sales to China jumped 55% to 57 billion US dollars.

China’s main trade partners in the region are Mexico, Chile and Brazil.

Ferrari said the tendency was for bilateral trade between both regions to increase in spite of the crisis, and that China should take over spaces left by the US and the EU.

Regarding Chinese investments in the region, Latinamerican businessmen consider this is the best moment to attract them to the region.

During the forum it was revealed that some of China’s largest groups were interested in setting factories and/or plants in Latinamerica for the manufacture of industrialized goods which currently are made in China with commodities from the region.

A specific case mentioned was China’s steel corporation Boasteel which is negotiating the construction of a smelting plant in Brazil with an investment demanding close to 5.5 billion US dollars.