Chile strengthens economic ties with the Chinese region of Sichuan

Photo: Claudia Sanhueza’s Instagram account

Chile and China have signed a series of agreements spanning fields such as academia, science, agriculture, and mining. These agreements, struck between Chilean organizations and companies from the Chinese province of Sichuan, are aimed at promoting mutually beneficial cooperation between the two countries and open up new opportunities for collaboration.

Sichuan leads Chinese investments in Chile, according to the Chilean Ministry of Foreign Affairs, highlighting the close ties the South American country has with the region. Claudia Sanhueza, the Chilean undersecretary for international economic relations, emphasized the vast potential for collaboration between Chile and Sichuan, a statement backed by the interest of Chilean companies in the Chinese province.

These cooperation agreements extend to areas such as fruit growing, the automotive industry, academia, research and development of technology and innovation, as well as the lithium sector. The agreements lay the groundwork for a  closer, results-oriented cooperation, stated Sanhueza. Additionally, she highlighted new investment opportunities for Sichuan in Chile.

Ignacio Fernández, Director General of ProChile, – an entity which forms part of the Chilean Ministry of Foreign Relations – highlighted the alternatives that Sichuan offers for the export of Chilean services, such as the audiovisual sector and the film industry.

The visit of a delegation from Sichuan to Chile, on april 19, was a response to the visit of Chilean President Gabriel Boric to China last year, which began in Chengdu, the capital of Sichuan. This action underscores the commitment of both parties to strengthening economic and cultural ties.

China is Chile’s largest trading partner, representing 39% of the total exports of the South American country. It is the main buyer of Chilean cherries and copper. In turn, Chilean exports to Sichuan focus on mining products, salmon, and chemicals, while imports from the Chinese province primarily revolve around machinery and electronic products.

However, this strengthening of economic relations also comes with challenges. Recently, Chile imposed temporary anti-dumping tariffs on Chinese steel products, including steel balls and bars used in the country’s mining industry. This measure aims to support local Chilean industry affected by cheap imports, a trend attributed to the slowdown in the Chinese economy.

Protecting the local industry poses a challenge for Chilean politicians, who seek to balance the country’s free trade strategy with the defense of jobs and key sectors. While necessary to protect the local steel industry, this measure could potentially create tensions with China, the main buyer of Chilean copper and a key trading partner of the South American country.

Main source:

Chile fortalece lazos económicos y comerciales con China | Portal Portuario (April 22, 2024).

Other related source:

Chile impone aranceles al acero chino para reforzar la industria local | Bloomberg (April 21, 2024)