While China is seeking to stimulate domestic consumption to spur its economy, it plans to import a greater variety of goods from Latin American nations in an attempt at balancing its trade with foreign countries, said a high-level official from the China Council for the Promotion of International Trade.
Wan Jifei, chairman of the trade council, told China Daily that the country is willing to encourage more Chinese businesses to invest in Brazil, Peru and other prominent Latin American countries. The money will be spent mainly in the consumer product, agriculture and mining industries. The goal is to induce Latin American countries to export more to China and elsewhere.
Wan's remarks came after Chen Deming, China's minister of commerce, encouraged Latin American countries to open their markets further and to be more welcoming to foreign investment. Doing so, he said during a trip to Argentina, will let more Chinese companies gain a presence and help such countries export more to China.
"China could import more agricultural by-products, infrastructure-related goods and chemical goods from Latin America," Wan said. "And the value of imports will undergo a sharp rise."
By the end of 2009, the annual value of trade between China and Latin American countries had risen for three consecutive years to more than $100 billion. China regularly runs trade surpluses with the region.
"Although bilateral trade rose rapidly, the scale could have been much larger," said Harold Forsyth, the Peruvian ambassador to China.
According to estimates, China's trade with Latin America accounts for only 5 percent of its total foreign trade.
China has signed free trade agreements with Chile, Peru and Costa Rica in Latin-America. What's more, China is the largest importer of goods and services from Brazil and Chile, and the second-largest from Peru, Argentina and Cuba.
"There is big potential for the growth of Chinese imports from the Latin-American nations," Forsyth said.
China mainly exports electronic goods, machinery, garments and shoes to Latin America. Meanwhile, Latin American countries, the most prominent being Brazil and Argentina, mainly sell China agricultural products and minerals and other raw materials.
"China thinks Latin American countries could export more, and export more value-added goods in particular, to China," Chen said. "We can take a series of measures to make that happen."
Brazil is the largest trading partner China has in Latin America. In 2010, the value of trade between the two countries increased by 47.5 percent from the previous year, rising to $62.5 billion.
"In the next five years, the value of the annual trade could exceed $100 billion," said Jim Liu, officer of Economic and Trade Section of the Embassy of Brazil in China.
China now runs a trade deficit with Brazil, amounting to $20.28 billion in 2010. China imports large amounts of Brazilian iron ore, soybeans, sugar and aircraft.
But Liu said China should do more to induce Chinese companies to invest in Brazil, to encourage trade between the countries and pave the way for Chinese imports to Brazil.
"Many Latin American nations are emerging economies, which expand quickly," Wan said. "This leaves various investment opportunities to Chinese companies.
"The rich mining resources that Latin American countries have are also attractive to Chinese companies."
By the end of 2009, China's investment in Latin America had risen to $30.6 billion, accounting for 12.5 percent of China's total outbound direct investment.
Latin America is the second-largest destination for Chinese outbound direct investment, following the Asia-Pacific region. In Latin America, most of the money goes to Brazil, Peru, Venezuela, Mexico and Argentina.
During the past few years, Chinese companies have invested heavily in Latin America's energy and mining industries and more business opportunities are arising.