World Economy

China, Peru to Diversify Trade

China, Peru to Diversify TradeChina, Peru to Diversify Trade

China and Peru signed deals on Friday to cooperate on industrial production and transportation in an effort to diversify a bilateral economic exchange that had been focused on natural resources.

Chinese Premier Li Keqiang and Peruvian President Ollanta Humala witnessed the signing of 10 agreements on investment, transportation, hydropower development, agriculture and education that followed a two-hour meeting, Xinhua reported.

Also launched was a feasibility study for a transoceanic railroad linking Peru’s Pacific Ocean ports with Brazil’s Atlantic Ocean facilities.

“The construction of the railroad will expand bilateral trade and people exchanges between China and South America, especially with the countries along the Atlantic coast,”Li said after the signing ceremony.

China, Brazil and Peru agreed that the study must be beneficial to economic and social development but also environmentally friendly.

“China respects the culture of Latin America as well as the tropical forestry that has nurtured such a culture,” Li said.

“Despite their geographic distance, China and Peru have great potential in cooperation, and such cooperation will not only benefit the two countries, but also the Asia-Pacific region and the continent.”

 FTA Beneficial

Peru’s president said the completion of the transoceanic railroad will promote trade and contribute to the economic growth of the three countries involved.

The free trade agreement between China and Peru took effect in 2010. Since 2012, China has been Peru’s main trading partner and the leading destination for Peru’s exports.

In 2014, China also became Peru’s main supplier of capital goods and leading investor, with $14 billion invested. China is now Peru’s second largest trading partner, its largest export market and its second-largest source of imports. Two-way trade reached $14.66 billion in 2013, a year-on-year rise of 6.3 percent.

The Peruvian government was working to diversify domestic production by boosting non-traditional exports, such as seaweed meal, giant squid, fruit and vegetables, to reduce its reliance on raw material exports.

As part of that push, Peru’s non-traditional exports to China reached more than $467 million at the end of 2014, double that of four years ago.

The goal is to reach “$25 billion in 10 years”, said Ana Deusta, the representative of the Association of Peru’s Agrarian Products Unions. She said that among the challenges facing the South American country was increasing its agricultural and fisheries production, and finding new markets, such as China, where demand for foodstuffs is growing steadily.