The General Administration of Customs of the People’s Republic of China (AGA) recently released a report on China’s international trade, which confirms that trade between China and Latin America and the Caribbean (LAC) reached a record US$489.047 billion in 2023, registering a year-on-year variation of 1.1%. This record was mainly driven by the increase in Chinese imports of raw materials.
At the end of 2023, trade between China and LAC accounted for 8.2% of China’s total imports and exports. According to statistics published by the AGA, Chinese imports from LAC were estimated at US$243.981 billion, an increase of 4.9%. Meanwhile, Chinese exports to LAC exceeded US$245,065 billion, a year-on-year decrease of 2.4%. The balance of trade was slightly in favor of the People’s Republic of China.
Increase in Chinese imports of raw materials.
In recent years, the Latin American and Caribbean region has consolidated its position as an important food supplier for China. Chinese imports of items such as soybeans, coffee, sugar cane, cherries, shrimp, beef, and fishmeal have had a positive impact on trade between the two regions and have contributed to guaranteeing the Asian country’s food security. According to the latest report published by the Commission for Latin America and the Caribbean (ECLAC) on «Prospects for International Trade in LAC 2023». It is estimated that between 2010 and 2022, LAC was the origin of almost one third of food imports from the People’s Republic of China.
With respect to the fall in Chinese exports to LAC, they respond to a global trend, since for the first time in seven years the world’s leading trading nation recorded a 4.6% drop in its exports, mainly due to the weak recovery of the world economy and growing geopolitical tensions. Chinese exports to LAC can be characterized by medium and high technology manufactured products, which recorded a contraction of 2.4%, significantly lower than the global drop. According to ECLAC, it is expected that the countries of the region will continue to face a scenario of low economic growth by 2024, which may continue to affect imports of Chinese products by LAC countries. However, in recent years China has become one of the most attractive export markets for LAC on a global scale, making the Asian country the leading trading partner for South American countries and the second largest trading partner for LAC countries after the United States.
In this context, it is important to mention that 22 of the 33 LAC countries have actively joined the Belt and Road Initiative (BRI) and it is expected that in the coming years other countries will join the initiative, facilitating the interconnection of infrastructures that are the priority of BRI cooperation. Within this framework, China will continue to open new maritime and air transport routes dedicated to Latin America, such as the recently inaugurated regular container ship route between the port of Dalian, located in Liaoning province, and Latin America (specifically with Mexico, Colombia, and Ecuador), this route has cold chains that will boost the export of the agro-industrial sector to the Asian country.
Thus, it is also expected that during 2024, new economic cooperation zones will be established in the region, Free Trade Agreements (FTA) and the new digital Silk Road will be consolidated through the development of the Silk Road e-commerce. In addition, the implementation of the eight actions to build a high quality RFI presented by the Chinese government during the Central Economic Work Conference held in December 2023.
Finally, it is expected that during 2024 the demand for imports from China will continue to increase in items such as soybeans, copper, iron, oil, and more recently lithium, a mineral used to produce electric vehicles, production that is led by China on a global scale. In addition, it is also expected that the largest proportion of trade will continue to be concentrated in 5 countries, Brazil, Mexico, Chile, Peru, and Colombia, which currently account for more than 89% of exports to the Asian country.
Aymara Gerdel
Director of CVEC