Beijing, January 13 (Xinhua)- China will replace the European Union in 2016 as the second-largest export market for Latin America and the Caribbean, given the current pace of growth, a recent report from the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) said.
"If China's demand for LAC products maintains the average growth rate of the past three years, China will overtake the EU to become the region's second-largest destination of exports in 2016, and China's trade value with the region is expected to hit $400 billion," the report said. The document was the result of the commission's consultations with chambers of commerce from 13 of the region's countries on trade and investment relations with China. The consultations set the basis for a series of recommendations to help countries in the region enhance their relations with China.
The report was titled Promoting Trade and Investment with China: Challenges and Opportunities in the Experience of Latin American Chambers of Commerce.
China's economy grew rapidly in the past decades and is now the world's second-largest. By 2017, the country's GDP is expected to outstrip that of the United States — making it the world's largest economy, the report said.
The buoyancy resulted in strong demand for raw materials with a large share from the LAC region.
Between 2000 and 2012, regional trade with China increased 21 times to stand at $250 billion, the report said. In 2012, China was the third-largest trading partner of Latin America, after the Untied States and the European Union. China accounted for 11.27 percent of the region's overall trade in 2012 and 6.76 percent of China's total trade, according to the Ministry of Commerce.
In 2013, China remained the largest trading partner of Brazil, whose exports to China -including copper ore, soybeans and iron ore- came in at $46 billion, up 10.8 percent from 2012, according to Brazil's Ministry of Development, Industry and Foreign Trade.
Brazil's exports to the United States dropped to $24.85 billion in 2013 from $26.84 billion in 2012, or 7.4 percent.
Chinese President Xi Jinping visited the region in early June, urging both sides to innovate trade patterns, forge new highlights of bilateral trade and expand China's imports from the region.
A cooperation forum between China and the region is also being prepared to establish a working agenda for deepening relations.
Meanwhile, China is striving to expand domestic consumption, which could create rising demand for products from the region.
The report also stressed the need to diversify regional exports to China, as they are currently concentrated in a very small range of commodities. The region's businesses identified several promising market niches, including agroindustry and a wide range of services including tourism, entertainment, architecture, urban planning and environmental management.
China's imports are expected to exceed $10 trillion in the next four years and its outbound investment will total $500 billion, presenting opportunities to the world.
Many of these opportunities relate to China's undergoing economic reforms to increase the focus on household consumption, as well as structural trends in Chinese society, including aging, and expanding middle class and urbanization, according to the report.
"Making full use of these new opportunities will involve the region's enterprises' increasing their presence in China. In the next few years, Latin American and Caribbean governments therefore need not only to promote exports to China but also support the direct presence of the region's companies within that market," the report said.
The report said also that these reforms could boost foreign direct investment flows from China to the region. China is no longer among the top foreign investors in the region, though its spending there has risen dramatically since 2010.
In 2012, China's non-financial outbound direct investment in Latin America reached $10.6 billion, accounting for 13.7 percent of China's total, according to the Ministry of Commerce.
The commission, ECLAC, is proposing the creation of a trade facilitation center in Beijing to support regional exports to China and promote trade relationships with Chinese companies.
