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  HOME | Argentina

How Argentina Is Trying to Narrow Down Trade Gap with China

SHANGHAI – Argentine exports to China have increased in the past few years, thanks to half a dozen distribution centers it has opened in the world’s second largest economy, the South American country’s ambassador in Beijing said on Thursday.

Diego Guelar in an interview with EFE insisted that the rapid growth in exports to China has shifted the paradigm towards value addition of products with main focus on direct sales from these business centers operated by the Chinese in the Chinese territory.

The latest of such centers was inaugurated on Thursday in Shanghai.

“Argentina was characterized as a country which did not sell anything, but rather people came from outside to buy, including Chinese buyers. There was no export policy. But now, for the first time, it is the Argentine exporters who send their products to China for local distributors to sell,” Guelar said.

The center that was inaugurated belongs to the Chinese company Jerui, which has marketed Argentinean products like other similar firms operating the five existing centers in the country. The centers are not directly linked to the Argentinean authorities but receive their support.

“We are offering an option in which the exporters send goods to companies which have the capacity to refrigerate, store and sell inside the free trade zones in the big cities, consign the goods to them, and they sell it for the exporters,” the ambassador explained.

He said that such an option was a cultural shift in the way of approaching export.

“Argentineans are learning that they have to place the product in the Chinese port to sell it, because here the market is so hungry that if a product is consumed, it has to be delivered immediately,” Guelar said.

He said the plans were already working, as according to official data, Argentina’s exports to China in April were 28 percent higher year-on-year.

However, trade balance between the two countries remains heavily tilted towards China.

Argentine exports to China stand at just $4.2 billion compared to Chinese imports worth $12 billion – a situation which arises “not because how much we buy from China, but how little Argentina sells,” Guelar insisted.

The data becomes even more noteworthy if compared with figures from neighboring countries such as Brazil, Chile and Peru, which are large exporters to China.

“We started at a very low base and we still have a long way to go,” said Guelar, attributing the situation to the political and economic situation in his country during the last few decades.

“The production in Argentina has continued to decline because it has been bad times for us as a country and we did not understand that the main market of any country today is not its internal market. One has to have an export policy which understands that the market is global and China is our most important market,” the ambassador said.

According to Guelar, another big challenge for the future of this kind of business centers is changing the type of products being exported, making them value-added, as currently the biggest part of exports arriving in China is made up of almost unprocessed soy and meat, raw wool and crude petroleum.

The ambassador said the big business opportunities were there to grab if Argentine companies understood that the market demanded quality.

Market analysis, he said, was needed in order to produce for China instead of just sending what was left as surplus.

 

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