Business
LAC countries explore Chinese market through annual import expo
By Li Xiaoyang  ·  2021-11-15  ·   Source: NO.46 NOVEMBER 18, 2021
Gabriela Urrego, a staff member with Basal Trading, presents Colombian products at the Fourth CIIE on November 6 (ZHANG WEI)

As Chinese consumers embrace cute dolls and warm clothing made from Peruvian alpaca fur, Uncle Mamani, a Peruvian craftsman, has also embarked on a journey for the better. He and his family work for Warmpaca, a brand set up by Chinese and Peruvian co-founders manufacturing alpaca fur products. This year marks the company's fourth time participating in the annual China International Import Expo (CIIE) in Shanghai, once again proving an expo highlight.

Peru is home to the alpaca, a domesticated camelid mammal that roams the high altitudes of the Andes and bears soft and light fur which, after processing, can be used to generate a variety of products. Many Peruvian families rely on the raising of alpacas or selling of alpaca souvenirs for a living. Established in 2018, Warmpaca has developed around 200 varieties of products ranging from dolls to clothes and scarves. It has seen the floor area of its stand at the expo expand from only 9 to 30 square meters this year.

"Since China has been observing a consistent rebound from the impact of the COVID-19 pandemic, the resumption of Chinese market demand has propelled the economic recovery of Peru," Ma Yuxia, one of the co-founders, told Beijing Review.

According to Ma, the company has brought together several self-employed craftsmen in Peru to engage in joint production. In the past, those people mostly sold alpaca fur products at fairs and their income was unstable. Today, Warmpaca helps them improve the quality and design of the handcrafted products, and connects them with the Chinese market, in turn enhancing their profits.

To boost trade and exchange, Peruvian trade promotion associations have provided the employees of Warmpaca with training on doing business with China. "Last year, the epidemic rendered some Peruvians unemployed. Since China's orders have resumed this year, the income of the craftsmen has again gone up," Ma said.

While Warmpaca has observed expanding presence in the Chinese market, other products from Latin American and Caribbean (LAC) nations have traveled far and wide to reach Chinese consumers. Liu Fuxue, Deputy Director of the CIIE Bureau, said at a promotional event in May that nearly 600 enterprises from over 20 LAC countries had participated in the previous editions of the expo over the past three years, with the total exhibition area reaching up to 20,000 square meters. Despite the geographical distance and lingering effects of the COVID-19 pandemic, the 2021 CIIE continued to bridge the gap and forge closer ties between China and the LAC countries.

Reciprocal relations

Agricultural and mineral products count as key exports of the LAC countries. For many of them, China, with its growing demand, constitutes a large trading partner. The distinctive products of the different countries were on display during this year's CIIE, such as beef from Argentina and Uruguay, cherries from Chile, propolis from Brazil, as well as cocoa and coffee beans—their overall world famous specialties.

By liaising with Chinese enterprises, many LAC coffee producers today tap into the Chinese market which features a growing consumer base seeking more diverse flavors. The expo's Colombian Pavilion introduces its visitors to coffee beans produced in the country's western Antioquia Province. The region has received investment from Zijin-Continental Gold, a subsidiary of China-based Zijin Mining Group Co. Ltd., in coffee planting and promotion.

"We are connecting coffee farmers from the Colombian countryside with China," Gabriela Urrego, a staff member with Basal Trading, told Beijing Review. According to her, the company based in Guangzhou, Guangdong Province, serves as a platform for China-Colombia trade. Its products range from low-calorie green coffee made from non-roasted beans to ground coffee, both of which have gained rising popularity among Chinese aficionados.

Geisha Coffee produced in Panama also met with Chinese consumers at the expo. According to Jean Paul Langenstein, production manager of Carmen Estate Coffee in the country's capital of Panama City, the company started selling coffee to the Chinese market a long time ago, but only in small quantities through a limited number of intermediary companies. At the end of 2019, when Chinese retailer Dashang Group purchased its plantation, the company was finally able to export its coffee to China directly.

"China has a fast-growing coffee market, making it an important market for Panamanian products. The fact that China has been able to host the expo in the pandemic situation has provided opportunities for global exhibitors to bring their products to the Chinese customers," he told Beijing Review.

The Chinese market has changed much over the past years, with consumer preferences shifting from instant to roasted coffee, and boutique brands are gaining traction. The country's boutique coffee market is swiftly growing, bearing the prospects of more opportunities for Panamanian producers, Langenstein added.

Visitors at the booth of Warmpaca, a Peru-based alpaca fur product brand, at the Fourth China International Import Expo (CIIE) in Shanghai on November 7 (LI XIAOYANG)

A good fit

As LAC enterprises eye further expansion in the Chinese market, their Chinese counterparts are also entering the LAC marketplaces. China's tech giant Huawei has launched business in countries such as Uruguay and Argentina, as well as developed training programs for exchanges on technologies between engineers from China and LAC countries.

These exchanges have boosted economic ties. Data from the General Administration of Customs of China showed that bilateral trade totaled around $289 billion in the January-August period this year, up 46.8 percent year on year.

According to an article by Chinese Ambassador to Brazil Yang Wanming in November 2020, China has been the second largest trading partner of LAC since 2015. The latter has in turn become the largest overseas supplier of agricultural products and the second largest destination of outbound direct investment (ODI) for China.

A total of 19 LAC countries have signed memorandums of understanding for Belt and Road cooperation with China. Under this framework, China and these countries have intensified cooperation on COVID-19 response and expanded mutual support in diverse sectors including infrastructure and technology.

Yang stressed that over 2,500 Chinese enterprises have established offices in the LAC nations, creating more than 1.8 million jobs for local people. Despite the outbreak of the pandemic in 2020, Chinese ODI in those countries surged 21 percent year on year.

Mei Xinyu, a researcher with the Chinese Academy of International Trade and Economic Cooperation, said China and the LAC countries bear mutually complementary industrial structures. Facing global challenges such as the pandemic and energy crunch, both sides are supposed to seek closer cooperation in the pursuit of solutions.

"Although the application of photovoltaic, solar and wind power in the LAC countries has not yet become full-fledged, its use of hydropower is leading in the world. China and those countries can work jointly on building better hydropower infrastructure," Mei told Beijing Review. He concluded that the cooperation can receive further expansion to the financial and e-commerce sectors as China has kept opening up its doors and seen initial progress in these aspects. 

(Reporting from Shanghai)

(Print Edition Title: Going the Distance)

Copyedited by Elsbeth van Paridon

Comments to lixiaoyang@bjreview.com

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