China & Chile

Milestones in the bilateral relationship between Chile and China

1. Chile has adhered to the one-China policy since 1970.
2. December 15, 2010 will mark 40 years since the establishment of diplomatic ties between the two countries. Chile was the first South American country to establish them.
3. China has signed more bilateral agreements with Chile than with any other country in our region.
4. Chile was the first country to sign a free trade agreement with China.
5. Chile was the first country to recognize China as a market economy.
6. As of the first half of 2009, China is Chile’s main trading partner.
7. On November 30, 2009, the exhibition “Ancient China and the Terracotta Army” will open in Chile.
8. Chile is the first Latin American country to meet the deadlines for its pavilion at Expo Shanghai 2010.
9. In 2001, a joint Chilean-Chinese experimental farm, consisting of 21 hectares in Jixian (120 kilometers from Beijing), was created.
10. Increasing cultural exchange and Mandarin Chinese classes in Chile (Instituto Confucio, Pontificia Universidad Católica de Chile); courses in public schools.
11. Opening of the new Chilean consulate in Guangzhou (2010), in addition to existing consulates in Beijing, Shanghai and Hong Kong.
12. Chile’s regions have increasingly developed friendship ties and cooperation agreements with China’s largest provinces.
13. The bilateral relationship was intensified by the People’s Republic of China’s proactive policy toward Latin America, laid out in the “Chinese Policy Document for Latin America and the Caribbean” published on November 5, 2008, the first document of its kind to be contributed to by an Asian nation. In this document, China states that in order to continue growing, we must work together to establish a strategic organization oriented towards the future.

Basic Information

Diplomatic Relations with Chile

• Type of relationship with Chile (Embassy or Consulate): Permanent embassies in Santiago and Beijing.
• Year in which diplomatic relations were established with Chile: December 15, 1970.
• Name of China’s Ambassador to Chile and date on which she assumed this post: Ambassador Liu Yuqin, April 2007.
• Name of Chile’s Ambassador to China and date on which he assumed this post: Ambassador Fernando Reyes Matta, June 2006.

Most important visits in recent years

Visits to Chile by Chinese authorities:

• In November, 2004 the President of the People’s Republic of China, Hu Jintao, visited Chile.
• On November 23, 2006 Mr. Sun Jiazheng, Minister of Culture, visited Chile. He was received by President Michelle Bachelet, in the first visit by a Minister of Culture to Chile.
• In September 2006 the Chairman of the Standing Committee of the National People’s Congress, Mr. Wu Bangguo, visited Chile accompanied by a prominent official and business delegation. He was received by Her Excellency the President of the Republic of Chile, the President of the Senate and the President of the Chamber of Deputies. Along with Senator Eduardo Frei Ruiz-Tagle, he presided over the opening of the Economic-Business Cooperation Forum, the 2nd Meeting of the Binational Chile-China Business Committee and participated in the implementation meeting of the “Political Dialogue Committee of Members of Congress from China and Chile”. The Chilean chapter is presided over by the Honorable Senator Sergio Romero.
• From April 26 to 28, 2007, Mr. Wu Guanzheng, Member of the Politburo of the Central Committee of the Chinese Communist Party, visited Chile. The purpose of his visit was to assess various political scenarios in Latin America.
• In May 2007 General Cao Gangchuan, Minister of Defense and Member of the Politburo of the Chinese Communist Party, visited Chile.
• From November 25 to 28, 2007 Mr. Li Meng, Vice Premier and Vice Chairman of the National Committee of the Chinese People’s Political Consultative Conference, visited Chile.
• On July 14 and 15, 2008, Mrs Uyunqimg, Third Vice President of the National People’s Congress visited Chile, accompanied by a parliamentary delegation from the National People’s Congress of the People’s Republic of China. She was received by Her Excellency the President of the Republic on July 15 at Cerro Castillo in Viña del Mar. She participated in the 3rd Meeting of the Political Dialogue Committee of Members of Congress from Chile and China, held on July 15.
• From November 20 to 23, 2008, Army General Xu Caihou, Vice Chairman of the Chinese Central Military Committee, visited Chile. He was received by the President of the Republic on November 20.
• From April 12 to 16, 2009 China’s Vice Premier for Land and Resources, Mr. Wang Min, visited Chile, accompanied by the Vice-Governors of the Autonomous Region of Tibet and of Qinghai Province.
• From June 28 to 30, 2009, His Excellency Mr. Liu Yunshan, Vice Premier, Member of the Politburo of the Central Committee of the Chinese Communist Party, Secretary of the Politburo and Chief of the Propaganda Department of the Central Committee of the Chinese Communist Party, made an official visit to Chile. Chile was the first country he visited in a tour that also included Argentina, Brazil and Peru.

Among the activities during his visit, he was warmly welcomed on Tuesday, June 30 by Her Excellency the President of the Republic and his counterpart, the Minister General Secretary of Government, Ms. Carolina Tohá Morales.

Visits by Chilean authorities to China:

• In November 2001 the President of the Republic of Chile, Mr. Ricardo Lagos Escobar, visited China.
• In May and October 2005, the Minister of Foreign Relations, Mr. Ignacio Walker, visited China.
• In September 2006 the President of the Senate, Mr. Eduardo Frei Ruiz-Tagle, visited China.
• In January 2007 the President of the Chamber of Deputies, Mr. Antonio Leal, visited China accompanied by deputies Jaime Quintana and Alfonso Vargas, in response to an invitation from the president of the National People’s Congress Mr. Wu Bangguo, during his visit to Chile. The delegation met with senior authorities of the National People’s Congress, the Chinese Communist Party and China’s Minister of Foreign Relations, Mr. Yang Jiechi.
• In April 2007 a delegation from Chile’s National Congress, led by by Senator Sergio Romero, visited China.
• From July 9 to 15, 2007 Mr. Álvaro Rojas, Minister of Agriculture, visited China.
• From October 23 to 27, 2007 Ms. Soledad Barría, Minister of Health, visited China to participate in the seminar on “Social Determinants of Health”.
• From April 11 to 15, 2008, Her Excellency the President of the Republic, Ms. Michelle Bachelet, made a state visit to China.
• From November 11 to 13, 2008 Mr. Santiago González, Minister of Mining, visited China.
• From February 18 to 24, 2009 a delegation from Chile’s National Congress, led by Mr. Francisco Encina, President of the Chamber of Deputies, visited China.
• On April 17, 2009, Ms. Laura Albornoz, Minister of the National Women’s Service, visited China during the Conference on Natural Disasters. Minister Albornoz was a presenter at that conference, representing the Inter-american Commission of Women of the Organization of American States (OAS).
• On May 25, 2009 the 4th Meeting of the “Political Dialogue Committee of Members of Congress from China and Chile” was held. Senator Sergio Romero, President of the Chilean chapter, led the delegation.

Most important bilateral agreements

List of most important agreements:

Agreement 1: Free Trade Agreement: signed on November 18, 2005; went into effect on October 1, 2006.
Agreement 2: Investment Promotion and Protection Agreement, 1995
Agreement 3: Supplementary Agreement on Trade in Services to the Free Trade Agreement between China and Chile, Beijing, April 11, 2008. Still in the legislative approval process.

Evolution of trade and bilateral investments between Chile and China

Since 2007, China has been the main destination of Chilean exports. In that year, the trade surplus topped US$ 5 billion. China’s rise as the main destination for Chilean exports is due to the increase in the price of copper in recent years and the signing of the Free Trade Agreement in 2005.

One year after the first stage of the Free Trade Agreement – the removal of tariffs on trade – went into effect, exports to China doubled, while imports grew by 40%. From January 2007 to June 2008, exports grew at a rate of 110.5% compared to the period from July 2005 and December 2006.

In 2009, using projected figures from the first half of the year, exports could reach 2008 levels, while imports may decline. It will be important to see how the global crisis unfolds and the level of Chinese economic deceleration, how problems caused by increasing food and fuel prices are resolved, as well as progress towards meeting the goals of the ASEAN+3 summit and the start of ASEAN+6.

Chilean capital invested in China from 1990 to the first half of 2008 totaled US$ 75 million, which is 0.2% of the total capital invested by Chile overseas.

Direct foreign investment made (Law Decree 600) by China reached a total of US$ 85 million, which represents 0.1% of all foreign investment received by Chile during that period.

At the end of the first half of 2009, China became Chile’s main trading partner, displacing the United States. Despite the decline in Chilean exports to the Asian giant, these represented 21.6% of Chile’s total exports, while those destined for the United States represented 14.1%.

During the current financial crisis, the volume of exports to China has fallen 13% compared to the same period in 2008.

Institutions and mechanisms of bilateral economic and commercial activity

• Economic-Commercial Cooperation Forum between Chile and China.
• Chile-China Binational Business Committee.
• Chilean-Chinese Chamber of Commerce and Industry.
• Chilean-Chinese Chamber of Commerce, Industry and Tourism (CHICIT).
• Professional Association of Chinese Businesspeople in Chile.

On November 27 and 28, 2007 the First China-Latin American Business Summit was held in Santiago, drawing more than 500 businesspeople from China and our region. The summit was inaugurated by Wan Jifei, President of the China International Trade Promotion Committee.

Bilateral Trade, Chile – People’s Republic of China

Source: Webcomex DIRECON
(*) Figures as of June 2009

At the end of the first half of 2009, China became Chile’s main trading partner. Despite the decline in Chilean exports to the Asian giant, these represented 21.6% of Chile’s total exports, while those destined for the United States represented 14.1%.

During the current financial crisis, the volume of exports to China has fallen 13% compared to the same period in 2008.

In 2008, Chilean exports to China by production sector were the following: 82% from the mining sector, followed by the industrial sector with 16.8% and agriculture with 1.1% of total exports.

The top 20 products sent to the People’s Republic of China represented 97.2% of total exports. Principal among those are copper, wood pulp and iron mineral and concentrates, which together reached 90.8%.

In 2008, a total of 497 different products were exported to China by 734 companies. The number of products increased by 4.4% from 2007 to 2008 and by 67.4% compared to 2004. The number of companies grew by 6.2% compared to 2007 and by 37.5% during the 2004-2008 period.

In 2008, exports of non-traditional products to China totaled US$ 469.7 million, with growth close to 45% compared to 2007. Non-traditional products are all products except for copper, fish meal, wood pulp, iron, nitrate, metallic silver, iron-molybdenum oxide, gold minerals, wood logs, cut and planed wood and methanol. In 2008, the 20 principal non-traditional export products represented 74.6% of total exports, with wine, salmon and trout, and fresh cherries ranking first, second and third, with 30% of the total.

The 20 principal products from China represented 21.5% of total imports from that country. Among the principal products are data processing machines (computers), cellular phones and similar items.

EVOLUTION OF THE CHILE-CHINA TRADE RELATIONSHIP TO 2008

Exports

a) By productive sector
Exports to the People’s Republic of China by productive sector: 82% were from the mining sector, followed by the industrial sector with 16.8% and agriculture with 1.1% of the total exported in 2008.

b) By products
The top 20 products sent to the People’s Republic of China represented 97.2% of total exports. Principal among those are copper, wood pulp and iron mineral and concentrates, which together reached 90.8%.

c) Number of companies and products exported
In 2008, a total of 497 different products were exported to China by 734 companies. The number of products increased by 4.4% from 2007 to 2008 and by 67.4% compared to 2004. The number of companies grew by 6.2% compared to 2007 and by 37.5% during the 2004-2008 period.

d) Non-traditional Exports
All products are considered non-traditional except for copper, fish meal, wood pulp, iron, nitrate, metallic silver, iron-molybdenum oxide, gold minerals, wood logs, cut and planed wood and methanol.

In 2008, exports of non-traditional products to the People’s Republic of China totaled US$469.7 million, representing growth of almost 45% compared to 2007.

In 2008, the 20 principal non-traditional export products represented 74.6% of total exports, with wine, salmon and trout, and fresh cherries ranking first, second and third, with 30% of the total.

Imports

The 20 main products imported from China represented 21.5% of total imports from that country. Among the main products are data processing machines (computers), cellular phones and similar items.