Trade between China and Latin America is growing, prospects for further development are promising

In recent years, Chinese President Xi Jinping has created a new roadmap for building a China-Latin America and Caribbean (LAC) community with a shared future, bringing China-LAC relations into a new era defined by equality, mutual benefit, innovation, openness and people-centered prosperity. Under the guidance of state diplomacy, China-LAC trade and economic cooperation has made significant progress and overcome many challenges, leading to remarkable achievements. China is now the region's second largest trading partner, with bilateral trade maintaining rapid growth for the seventh consecutive year. Meanwhile, China's "circle of friends" in LAC continues to grow.

This year marks the 20th anniversary of the first free trade agreement signed between China and LAC countries. Over the past 20 years, progress in FTAs between the two sides has expanded, improved the quality and increased the efficiency of China's network of high-standard free trade zones. Since 2005, China has successively signed and put into force five FTAs with LAC, namely with Chile, Peru, Costa Rica, Ecuador and Nicaragua. Of these agreements, those with Ecuador and Nicaragua were concluded during the 14th Five-Year Plan period (2021-2025). China is accelerating negotiations on FTAs with Honduras, and both sides have already reached a preliminary agreement. Negotiations with El Salvador are ongoing and active steps are being taken to reach FTAs with more LAC countries.

China-LAC FTAs reflect the standards required for high-quality FTAs. The FTAs signed with Chile and Peru have both been improved in recent years. The China-Nicaragua FTA, signed in August 2023, is China's first agreement to open cross-border trade in services and investment through a negative list.

In 2024, when China chairs the Regional Comprehensive Economic Partnership (RCEP), it has worked with other RCEP members to facilitate procedures for admitting new members to the agreement. In the same year, Chile officially applied to join RCEP, promising a bright future for advanced free trade cooperation between China and LAC on broader platforms.

Over the past 20 years, free trade agreements between China and LAC countries have yielded fruitful results that have promoted trade growth and benefited businesses and people in China and LAC.

Since the entry into force of the China-Chile FTA in 2006, bilateral trade has grown rapidly, reaching US$61.66 billion in 2024, 8.6 times higher than in 2006. This growth far outpaced the 3.2-fold increase in China's total foreign trade over the same period. In the decade following the implementation of the agreement, China gradually eliminated tariffs on Chilean wine, leading to a 13-fold increase in wine imports from Chile. This not only satisfied the various demands of Chinese consumers, but also opened up numerous opportunities for Chilean enterprises. Chilean cherries have also benefited from the advantages of free trade and have become a popular fruit among Chinese consumers.

The China-Peru Free Trade Agreement, which entered into force in 2010, has promoted rapid growth in bilateral trade. In 2024, trade between China and Peru will reach US$43.36 billion, seven times higher than in 2010, far outpacing the 1.7-fold increase in China's total foreign trade during the same period. Peruvian products such as blueberries, grapes, avocados and octopus have successfully reached the Chinese market. While Chinese mobile phones, toys and cars have gained wide recognition and popularity in Peru.

The China-Costa Rica Free Trade Agreement, which came into force in 2011, led to an increase in trade between the two countries to US$7.76 billion in 2024, a 36.1 percent year-on-year increase. During that time, Chinese imports from Costa Rica grew by 50.1 percent, while exports to Costa Rica increased by 21.4 percent. These growth rates outpaced the growth of China's overall foreign trade, underscoring the promising prospects for enhanced trade and economic cooperation between the two countries.

The three agreements that entered into force in 2024 have also produced remarkable results. The China-Nicaragua Free Trade Agreement entered into force on January 1, 2024. In 2024, bilateral trade grew by 46.8 percent year-on-year. Chinese exports of automobiles, motorcycles, telephones, knitted goods and rubber products to Nicaragua have increased at more competitive prices, greatly improving the living standards of local communities.

The China-Ecuador Free Trade Agreement entered into force on May 1, 2024. In the first month of its implementation, Chinese imports from Ecuador experienced growth both year-on-year and month-on-month. From May to December 2024, China's cumulative imports from Ecuador reached US$5.78 billion, an increase of 10.1 percent compared to the same period in 2023. Ecuador's exports to China, including frozen octopus, frozen lobster, frozen fish, coffee, cocoa beans, pitaya, and fish meal, have seen significant growth.

Given the vast opportunities for both sides, China and LAC countries should take full advantage of their mutual strengths and continuously strengthen free trade cooperation to ensure that FTAs bring more benefits to the people. Both sides should strive to make solid progress in building a China-LAC community with a shared future and steer the ship of China-LAC friendship toward an even brighter future.

CMG