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China-Latin America trade booms with greater prospects

By Cui Fan | chinadaily.com.cn | Updated: 2025-02-02 12:15
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WANG XIAOYING/CHINA DAILY

In recent years, Chinese President Xi Jinping has charted a new blueprint for building a China-Latin America and the Caribbean (LAC) community with a shared future, ushering the China-LAC relationship into a new era defined by equality, mutual benefit, innovation, openness, and people-centered benefits. Guided by head-of-state diplomacy, China-LAC trade and economic cooperation has navigated numerous challenges, achieving remarkable results. China is now the region's second-largest trading partner, with bilateral trade maintaining rapid growth for seven consecutive years. Meanwhile, China's "circle of friends" in LAC continues to expand.

This year marks the 20th anniversary of the first free trade agreement signed between China and LAC countries. In the past 20 years, the progress made in free trade agreements between the two sides has expanded the scope, enhanced the quality, and increased the efficiency of China's network of high-standard free trade areas. Since 2005, China has successively signed and brought into force five free trade agreements in LAC with Chile, Peru, Costa Rica, Ecuador, and Nicaragua. Among these, the free trade agreements with Ecuador and Nicaragua were concluded during the 14th Five-Year Plan period (2021–2025). China is expediting free trade agreement negotiations with Honduras, and the two have reached an early harvest arrangement. Negotiations with Salvador are gathering pace, and active efforts are being made to negotiate and conclude free trade agreements with more LAC countries.

The free trade agreements between China and LAC countries reflect the standards required of high-level free trade agreements. The free trade agreements signed with Chile and Peru have both been upgraded in recent years. The China-Nicaragua free trade agreement, signed in August 2023, marks China's first instance of opening up cross-border trade in services and investment through a negative list approach.

In 2024, as the rotating chair of the Regional Comprehensive Economic Partnership (RCEP), China worked alongside other RCEP members to facilitate the procedures for new members joining the agreement. During the same year, Chile officially submitted its application to join the RCEP, promising a bright future for higher-level China-LAC free trade cooperation on broader platforms.

In the past 20 years, the free trade agreements between China and LAC countries have generated fruitful outcomes, boosting growth in trade and benefiting enterprises and people in China and the LAC.

Since the China-Chile free trade agreement came into force in 2006, bilateral trade has experienced rapid growth, reaching US$61.66 billion in 2024, 8.6 times that of 2006. This growth significantly outpaced the 3.2-fold increase in China's foreign trade during the same period. In the decade following the agreement's implementation, China progressively eliminated tariffs on Chilean wine, leading to a 13-fold increase in wine imports from Chile. This not only met the diverse demands of Chinese consumers but also opened up numerous opportunities for Chilean enterprises. Additionally, Chilean cherries have benefited greatly from the tailwind of free trade, becoming a popular fruit among Chinese consumers.

The China-Peru free trade agreement, which came into force in 2010, has both promoted and witnessed the rapid growth in bilateral trade. In 2024, trade between China and Peru reached US$43.36 billion, seven times the amount recorded in 2010, significantly outpacing the 1.7-fold increase in China's overall foreign trade during the same period. Peruvian products such as blueberries, grapes, avocados, and squid have successfully entered the Chinese market. Meanwhile, Chinese-made smartphones, toys, and passenger vehicles have gained widespread recognition and popularity in Peru.

The China-Costa Rica free trade agreement took effect in 2011. In 2024, trade between the two countries increased to US$7.76 billion. marking a 36.1 percent increase year on year. During this period, China's imports from Costa Rica grew by 50.1 percent, while exports to Costa Rica increased by 21.4 percent. These growth rates outpaced China's overall foreign trade growth, underlining the promising prospects for enhanced trade and economic cooperation between the two countries.

The three agreements that came into force in 2024 have also yield remarkable results. The China-Nicaragua free trade agreement came into force on Jan 1, 2024. In 2024, bilateral trade grew by 46.8 percent year on year. Specifically, China's exports to Nicaragua rose by 40.8 percent year on year, and its imports from Nicaragua surged by 218.3 percent. Nicaraguan products such as sugar, frozen lobster, white shrimp, and cotton yarn have seen rapid growth in exports to China, starting from a zero base. Meanwhile, Chinese-made passenger vehicles, motorcycles, phones, knitwear, and rubber products have entered the Nicaraguan market at more competitive prices, greatly improving local communities' livelihoods.

The China-Ecuador free trade agreement came into force on May 1, 2024. In the first month of its implementation, China's imports from Ecuador saw both year-over-year and month-over-month growth. From May to December 2024, China's cumulative imports from Ecuador reached US$5.78 billion, representing a 10.1 percent increase compared with the same period in 2023. Ecuador's signature export products such as frozen squid, frozen lobster, frozen fish, coffee, cocoa beans, pitaya (dragon fruit), and fishmeal all witnessed substantial growth in exports to China. Chinese-made smartphones, motorcycles, refrigerators, generators, and other cost-effective products have found their way into numerous households in Ecuador, bringing greater convenience to local people.

Less than half a year since the implementation of the early harvest arrangement of the China-Honduras free trade agreement, Honduran white shrimp has successfully entered the Chinese market. At the same time, people in Honduras can enjoy tilapia from China at more affordable prices, directly benefiting from the bilateral free trade cooperation.

Bound by a shared future, we need to work in unison on the path forward. The resolution adopted at the third plenum of the Communist Party of China 20th Central Committee in July 2024, stated that opening-up is a defining feature of Chinese modernization, and we must remain committed to the basic state policy of opening to the outside world and continue to promote reform through opening-up.

China's increasingly open market is bound to present more opportunities to LAC countries. Standing at a new historical starting point, China and LAC countries should fully exploit their respective strengths and continuously strengthen free trade cooperation to ensure that free trade agreements can deliver more benefits to the people. The two sides should strive for 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.

The author is a professor at School of International Trade and Economics, University of International Business and Economics

The views don't necessarily represent those of China Daily. 

If you have a specific expertise, or would like to share your thought about our stories, then send us your writings at opinion@chinadaily.com.cn, and comment@chinadaily.com.cn.

 

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