Xi to promote FTA on Latin America trip

Chinese President Xi Jinping's forthcoming visit to Latin America will restructure bilateral trade and promote a free trade agreement at a time when both sides are undergoing pressure from an economic downturn, experts said.

Xi will visit Ecuador, Peru and Chile from November 17 to 23 and attend the 24th Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting on November 19 and 20 in Lima, Peru. It will be Xi's third visit to the continent since he took office in March 2013.

Peruvian President Pedro Pablo Kuczynski said his government not only welcomes Chinese investment in mining, but in ore smelting and mineral products, news site china.com.cn reported. Xu Shicheng, a research fellow in Latin American studies at the Chinese Academy of Social Sciences, said China wants to import more high added-value products, instead of just primary commodities. He also envisioned the free trade agreements China signed respectively with Peru and Chile to be upgraded during Xi's visit this time.

Trade volume between China and Latin America was $99.2 billion between January and June, a plunge of 11.3 percent compared with the same period last year. As the trade volume between China and Latin America has continued to decrease, it is necessary to change the trade structure, Xu said.

The Chinese economy has changed to a "new normal" of maintaining medium-to-high speed of growth. Annual GDP growth for the 2016-2020 period must maintain at a level of at least 6.5 percent. The Economic Commission for Latin America and the Caribbean set its economic growth projections for the region for 2016 at an average contraction of -0.9 percent.

Among visitors from the 21 member economies of the Asia-Pacific Economic Cooperation (APEC) forum, the Chinese visitors rank the first in doing business and investing in Peru. From 2011 to 2015, 21,456 Chinese business people visited Peru.

Peru and Chile are both signatories to the US-led Trans-Pacific Partnership (TPP), however, the fate of this trade bloc faces uncertainties in the wake of the US presidential election. Yang pointed out that Peru and Chile are also members of the Pacific Alliance, the most active trade bloc in South America, and that they will be willing to promote a free trade agreement signed by Pacific-rim countries.