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China'S PRESENCE GROWS IN SOUTH AMERICA

The commercial relationship between Peru and China.

Products that have entered the Peruvian market.

Among the products that have entered the country are vehicles and mobile phones, soy products, wheat, machinery and equipment, and various inputs for the industry. Forty-seven percent of Peruvian imports are for industrial use, and 33 percent are capital goods, such as machinery and equipment, that contribute to the productive capacity of the Peruvian industry.

Forty-seven percent of Peruvian imports are for industrial use, and 33 percent are capital goods, such as machinery and equipment, that contribute to the productive capacity of the Peruvian industry.

Imports from China to Peru

Peru is becoming the hub of Asia in South America; the increase in imports sends a very positive signal about the interest of capital investors from China and other countries to invest more actively in Peru. Also, it has the lowest duties in Latin America, at only 1.9 percent, the fourth-lowest cost of importing, the fifth-best rules concerning foreign direct investment (FDI), the sixth fastest shipment tracking service and the seventh-best skills in logistics.

The average growth rate of imports over the six years from 2011 to 2016 is 8.2 percent, the fifth-highest growth rate in the region and the second-highest among its significant economies.

Imports from China to South America

Looking from the other side, South America has become the largest export destination for Chinese carmakers, which sold 286,500 vehicles there in 2013, according to the China Association of Automobile Manufacturers (CAAM) reported by the official journal China Daily.

This volume of sales in South America in 2013 represented 30 percent of the total number of vehicles exported from China to the rest of the world last year. It meant a growth rate of 19 percent over the number of cars sold in the region in 2012.

In 2010 the Chinese manufacturer Lifan opened a car assembly plant in Uruguay; in 2013, it exported 4,500 vehicles to Brazil and planned to increase its presence there and in Argentina.

Another Chinese manufacturer, the state-owned Chery, which has had a factory in Venezuela since 2011, expects to open a second factory in Brazil to produce an updated version of its compact car, the Fowling, with a petrol/ethanol dual-fuel engine. Overall, Chery plans to sell 650,000 vehicles in 2016, with the Brazilian market expected to account for 11 percent of total sales.  Of the 51 brands of cars in Brazil, 12 are Chinese. The proportion is even higher in Uruguay, where 26 of the 54 vehicle firms are from China, and Chinese manufacturers account for 26 percent of the local market.

Overall, it seems likely that China and other Asian countries will account for a substantial slice of the IP in South America. Products that have entered the Peruvian market.


*Free Trade Agreement between Peru and China. Trade Agreements of Peru (Ministry of Foreign Trade and Tourism of Peru).

Virginia C. Delion

Virginia C. Delion

Partner and Manager

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