Closer trade link develops with Chile

That year, the region became the second-largest destination for Chinese outbound direct investment, accounting for 16.8 percent of the nation's total outbound investment, according to the Ministry of Commerce.

Although China's ODI flowing into Latin America was $54 billion by the end of 2011, its investment in Chile was merely $250 million.

But while China and Chile further strengthen bilateral economic and trade relations, "we could see a big increase (in Chinese investment into Chile) in the future. Industries including mining, tourism, infrastructure and agriculture are the most potential," said Shao.

Early in 2010, State Grid Corp agreed to spend at least $900 million to develop a large copper deposit in Chile in partnership with Vancouver-based Quadra Mining.

A report by Diego Portales University Chile said China's investment in Chile's mining sector will reach $10 billion by 2017.

In November 2005, China and Chile signed a two-way FTA, which came into force in October 2006. In April 2008, President Hu Jintao and his Chilean counterpart Michelle Bachelet witnessed the signing of the Supplementary Agreement on Trade in Services of the Free Trade Agreement between the two sides.

"The FTA and the recent additional agreements on investment are set to stimulate Chinese investment here," said Yang Wanming.

Sky Solar Holdings Co Ltd, a giant renewable energy developer from China, just announced the kickoff of an 18 mW solar power plant in Chile's northern Arica province this month. The plant will be completed before the end of the third quarter of 2013.

With other planned solar projects included, the investment will amount to $900 million.

COFCO Wine and Spirits, the wine unit of the State-owned food company COFCO, also completed its acquisition of Chilean winery Bisquert for $18 million.

Chile is the sixth-largest economy in the Latin-American region, but it is ranked as the freest economy in the region by Washington-based think tank Heritage Foundation.

Chile's economy has registered growth of more than 6 percent during the past decade. A report by the Organization for Economic Cooperation and Development predicted that Chile would outperform other OECD member nations in economic growth from 2012 to 2014.

"Chile is a very free market, and domestic consumption is big and growing steadily. Chile is the right market for Chinese companies," said Marco Salazar, general manager of FAW Chile.

FAW Chile was set up in 2010, and as a test started selling trucks in the market. In 2012, the company decided to expand in Chile and sell cars from BYD, Greatwall and Chery in December, while the Chinese car brands become more and more recognized.

"The Chinese auto brands are very competitive in Chile, and the market share has been growing fast. FAW is ready to continue to expand sales in Chile," said Salazar.

 

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