PANAMA CITY – Latin America must create a good business climate to attract Chinese investment in multiple sectors including agribusiness, which could get a big boost from strategic associations between small companies in both regions.
That attitude characterized Latin American and Caribbean company owners and executives at the inauguration of the 13th China-LAC business summit this Monday in the Panama capital, with the participation of some 400 Chinese business people and around 600 from Latin America and the Caribbean.
During a panel discussion about the opportunities and challenges facing the trans-Pacific collaboration structured within China’s Belt and Road initiative, the entrepreneurs and officials on both sides agreed that among the challenges Latin America must deal with is its lack of competitivity, and came up with some clues on what to do about it.
“Latin America must create a good business climate,” said the executive vice president of China Construction America, Wu Taizhong.
He gave as an example the “very high” production costs, and that Latin America logistics costs are from 15 to 35 percent more than in other regions of the world.
He said that investment in infrastructure and logistics within the Belt and Road initiative “could lower production costs,” which are weighing heavily on Latin America’s competitivity.
Trade between Latin America and China continues to be “simple” due to the weakness in infrastructure, a sector with “a lot of room for improvement,” Wu added.
In that he coincided with the executive director of the China-LAC Industrial Cooperation Investment Fund, Han Hongmei, who spoke of “expanding the perspectives of investment” in Latin America, where it already finances projects in energy and infrastructure to the tune of $1 billion.
The fund, Han added, is disposed to finance projects in the agriculture and new technologies sectors, among others, while carefully studying “their economic and environmental sustainability in the medium and long term.”
Costa Rica’s Deputy Foreign Minister Duayner Salas Chaverri acknowledged that “competitivity is the issue we must do something about” in Latin America, even in agricultural exports, which figures show is doing well as a geographical sector, but is concentrated in two countries, Brazil and Argentina, producers of between “70 and 80 percent of the business.”
For the president of Panama’s Vacamonte Logistics Park, Jorge Garcia Icaza, a way to promote investment and trade with China is through strategic associations between small and medium-sized companies on both sides of the Pacific.
“The model for doing business with China has to change to the degree that Chinese business people wish to invest (together with Latin Americans) in processing plants for meat, chicken, and plants for value-added products that they themselves might need. That will attract investment because it nails down a place for us on the Chinese market,” Garcia told EFE.
The businessman invited China to establish in Panama a center of higher learning that will transfer technology and grant agribusiness and engineering scholarships to Latin Americans.
The 13th China-LAC business conference continues until Wednesday, organized by the Panama Chamber of Commerce, Industry and Agriculture (CCIAP), the Trade and Industry Ministry (MICI), the Panama Tourism Authority, the Inter-American Development Bank (IDB), the International Chamber of Commerce of China, and the Chinese Council for the promotion of international trade.
With expectations of generating deals worth some $150 million, the summit will treat such matters as business and investment opportunities plus trade policies, the latter to be the work of MICI Minister Ramon Martinez.