China Trade With Latin America Rises 7% in Value in First Half
Trade in goods between China and Latin America rose 7% year-on-year in the first half in yuan terms, as countries including Mexico and Brazil stepped up purchases of manufacturing equipment and Chinese automakers raced to expand operations in the region.
During that period, China’s shipments to Latin American countries surged 6% to 819.3 billion yuan ($115 billion), data released Thursday by the General Administration of Customs show.
China has experienced a surge in demand for manufacturing equipment and car parts such as tires this year from Brazil and Mexico, its top two trading partners in the bloc, said He Yong, head of Latin America at Chinese logistics agency CL Consolidators Services Ltd.
Demand was particularly robust for second-hand molding equipment, which are of value and require lower skills to operate, He said.
Chinese carmakers’ ongoing supply chain shakeups are also pushing up the country’s auto parts exports to Latin America, a person from CEVA Logistics, a subsidiary of French shipping giant CMA CGM S.A., told Caixin.
In 2022, Latin American nations including Mexico and Chile were among the biggest destinations for vehicle shipments from China, according to data from the China Association of Automobile Manufacturers.
Players in China’s auto industry are doubling down on overseas expansion by establishing or acquiring offshore manufacturing facilities, with Latin America becoming one of their top picks. The latest example of the push is by BYD Co., which announced a plan in July to set up a Brazil-based manufacturing complex for EVs and hybrids.
Great Wall Motor Co. Ltd. also bought a factory in Brazil in August 2021, and vowed to invest $1.9 billion in Latin America’s largest economy over the next decade months later.
With more than 650 million in population and a swelling middle class, Latin America has an emerging e-commerce market that Chinese vendors and platforms are trying to tap.
The bloc was projected to account for 20.4% of the overall e-commerce growth worldwide last year, ranking the second-highest behind Southeast Asia, according to a report released by market researcher eMarketer Inc. in February 2022.
Shipments of consumer and retail goods, including home appliances and apparel, have maintained strong momentum into 2023, the person from CEVA also noted.
Beijing’s efforts to deepen ties with Latin America by signing free trade pacts and cutting tariffs are set to further boost trade with the region, the person said.
On May 11, Ecuador and China signed a free trade agreement, making it the fourth Latin American country to reach the deal after Chile, Peru, Costa Rica.
Last year, China’s trade with Latin America exceeded 3 trillion yuan for the first time, the sixth consecutive year of growth, customs administration spokesperson Lv Daliang said at a press conference Thursday.
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