As the global economy continues to keep investors jittery, Hong Kong’s important export industry thinks it has found an emerging market in which it can be confident of both stability and room for expansion: Chile.
Chile’s economic policies of promoting free trade, strong regional ties and growing consumer market have all made it an attractive option for exporters and investors from one of the world’s economic hot spots.
“Chile’s for sure the most liberal market in the region and also one of the most free in the world,” said Louis Chan, an economist at the Hong Kong Trade Development Council.
The country’s per-capita GDP of US$11,800 gives it a purchasing power that cannot be rivaled by its larger regional neighbours, such as Brazil and Mexico, and is only inhibited by its small consumer pool of 17 million.
But this setback has been overcome by the establishment of strong regional links to neighboring countries like Peru and Argentina, which make Chile a gateway into the ever more important South American market.
And in return, Chile’s booming primary produce industry is increasingly using the former British islands as a launchpad into the lucrative Chinese and East Asian markets.
Marco Hazan, owner of Hong Kong-based company BOHK Logistics, is the current chairman of the Chilean Business Association of Hong Kong and Macau.
“We feel that there’s plenty of opportunities that still haven’t been exploited to their fullest potential,” said Hazan.
“Obviously copper is the most well-known export from Chile, but there are also a lot of opportunities in food, including wine, which has been the most promoted up until now, and also in services and investments, especially today when most investments in the world are being questioned.”
Since the abolition of wine import taxes in 2007, Chilean wine has been growing in popularity in Hong Kong, selling US$17 million worth in 2010.
And perhaps more importantly, the world’s first totally tax-free wine port among major economies has become a gateway into the emerging markets of Japan, South Korea and mainland China.