Business between Chile and China has soared since the signing of a Free Trade Agreement in 2005, according to a report from Chile’s Department of International Economic Relations (Direcon).
Trade between the two countries rose by an average of 29 percent over the first five years of the agreement, reaching a total value of US$17.4 million last year.
Today almost two-fifths (39 percent) of foreign shipments from Chile head to China, making it the country’s number one export destination. At the same time, Chile has risen to 17th place on the list of countries that sell goods to China.
The main reason for the steady growth in Chile’s trade with China is copper exports, which grew at an average annual rate of 31 percent between 2005 and 2010.
Last year the semi-precious metal accounted for 82 percent of China-bound exports from the South American nation, with a net worth of US$14.3 million.
The leading non-copper exports were other base metals, worth US$596 million last year, and processed foods, which brought US$275 million into the country in 2010. Despite strong increases in non-copper shipments, the country’s exports still remain highly concentrated, with the top 10 products accounting for 88 percent of all exports to China.
Last year 746 Chilean business exported 472 products to China, up significantly from 2005 when a total of 429 companies exported 291 products.
Chilean imports from China have also risen significantly, increasing 26 percent since the Free Trade Agreement was signed in 2005.
In 2010, the value of Chinese goods bound for Chile was close to US$10 million, up 61 percent on the previous year.
The Chinese products represented 17 percent of Chile’s total imports last year, making it the country’s biggest source of foreign goods, ahead of the United States. The biggest imports from China were consumer goods and intermediate goods.
Last month Direcon released a report showing that a similar agreement with Japan had increased trade with that Asian country as well.