Closer trade link develops with Chile

The most favorable investment destination in the Latin-American region is rapidly becoming a prime target for a growing number of Chinese enterprises, reports Ding Qingfen in Santiago

It is touted as the most competitive economy and also the most favorable destination for foreign companies in the Latin-American region, but China's investment in Chile has been surprisingly small.

This, however, is probably set to change as China and Chile wrapped up a free trade agreement on investment, and a growing number of Chinese companies turn their eyes on a nation that has led the Latin-American region in terms of economic expansion and that is committed to spurring investment in a wide range of sectors, including infrastructure and energy.

Although China has hurled huge investment at some Latin-American nations including Brazil, it has been slow in entering Chile.

China's investment in Chile is quite small, said Shao Yingjun, economic counselor of the Chinese Embassy to Chile.

Figures from the Chilean government showed that from 1974 to 2011, China's cumulative investment in the country reached $94.7 million, accounting for 0.12 percent of Chile's total foreign direct investment during the same period.

"Politically, the country is very stable, with a well-developed legal system and social welfare mechanism," said Yang Wanming, China's ambassador to Chile.

But at the same time, "Chile is a market that is highly market-oriented, very active and strictly supervised and managed. But Chinese investors have limited information about the market", added Yang.

A recent survey by the World Bank showed Chile continued to be the most appealing Latin American nation for foreign businesses in 2013 for three consecutive years.

Chile is the second-largest nation in the Latin-American region in terms of the volume of foreign direct investment, next to Brazil.

According to statistics from the Economic Commission of the UN for Latin America and the Caribbean, Chile attracted FDI worth $12.28 billion during the first half of 2012, up 80 percent from a year earlier.

Despite the drop in FDI worldwide since the financial crisis, China's outbound investment has witnessed a fast growth, reaching $60 billion in 2011.

The Latin-American region has led that growth.

 

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