Latin America offers way out of demand doldrums

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.

"It has abundant land, mining and energy resources, and China has a lot of manufactured goods that they need. It's a good match," said Zhang Yansheng, secretary-general of the National Development and Reform Commission's academic committee.

But he also has concerns. "We are far away from each other, which makes business exchanges more difficult to arrange than with other places," Zhang added. "And the political instability in the region and cultural differences also pose difficulties to Chinese exporters."

For Latin American countries that either rely greatly on mineral goods or are trying to diversify their exports, China's gigantic market and its rapid growth are attractive attributes, he said.

China is the largest export destination for Brazil, and also the largest for Chile.

China's exports have been on the decline since the latter half of last year, although they increased by close to 10 percent in September. Yet that recovery has inspired little confidence in the nation's export prospects.

Chinese manufacturers are now facing their most difficult circumstances since the financial crisis and have been calling on the government to expand shipments to emerging markets.

"Latin America plays a essential role in helping China stabilize its exports growth and sustain economic growth," said Yang.

 

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