Chinese investment in Chile generates opportunities and concerns

The decision by the Chinese company Sinovac to establish a COVID-19 vaccine plant in Chile is the latest example of the growing trade between the two countries. Blueberry trade, 5G and mobile telephony are just one example of the growing links between the two economies. Should the United States be concerned?

Two years ago, Chinese moviegoers started eating Chilean blueberries instead of popcorn at the movies. The candy, called «Blue Pop» and served in small red and white striped boxes, it was a creation of the Cranberry Committee of Chile, who hoped to make the fruit grown in South America a mandatory food in the most populous country in the world. .

It worked. The Asian market has represented the 37,8% of Chile's fresh fruit exports during the 2020-21 season to date, according to the Chilean Association of Fruit Exporters (ASOEX).

The proportion of Chilean fresh fruit exports going to Asia has grown 16,4% year-over-year, allowing China to overtake the United States as the Chile's main destination for fruit exports.

The blueberries are just one example of the growing links between the two economies. Chinese companies in the country provide 5G mobile phone service, distribute electricity and operate banks, among other activities.

In August, the Chinese firm A nephew announced plans to invest $ 60 million to build a vaccine manufacturing plant in the Santiago Metropolitan Region.

Once up and running, the plant will be able to produce 60 million doses of Sinovac CoronaVac vaccine, authorities said, and it is scheduled to start operations in the second quarter of 2022. The company will also build a research and development center in the north. Antofagasta region.

Chile's Health Minister Enrique Paris said the announcement marked “a happy day for Chile; but not only for Chile, because the factory will be able to produce vaccines to export to Latin American countries that have had difficulties to acquire them ”.

An engine of growth

China is Chile's largest trading partner, and trade between Chile and China has become one of the most important engines of the Chilean economy, which is beginning to show signs of recovery as the economic effects of the coronavirus pandemic fade.

«Existe una relación económica, política e institucional de larga data entre los dos países», dijo a Al Jazeera Andrés Rebolledo, economista y exministro de energía de Chile.

"The Chilean government has made a systematic effort for years to attract Chinese investment, it has sought and encouraged it," he added.

International Commerce

InvestChile, government agency that promotes foreign investment in the country, listed 30 projects from China in its portfolio at the end of the first half of 2021, projects worth a total of $ 5.64 million, half a million dollars more than the US.

The total investments of Chinese companies add up to about 690 million dollars, and of these, energy and infrastructure represent 3,8 million and 1,2 million dollars, respectively.

"Chinese investment has arrived in Chile later than other countries and continues to grow," Andrés Rodríguez, director of InvestChile, told Al Jazeera. "That is why it is striking today, but we have a very important historical investment portfolio from the United States, Spain or Canada, which continue to be the main investors in Chile," he added.

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