China, Chile seek enhanced trade, investment

Updated: 2014-12-19 00:44

By Zhang Yuchen in Beijing(China Daily Latin America)

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Chile and China are looking to a prospective enhanced bilateral investment and trade relation in 2015.

As China is now free to do investment when many Chinese companies are allowed in the framework of APEC to do Public Private Partnership projects in the Asia-Pacific area, Chile is trying to attract Chinese investors to do PPP when in Chile, with $15.2 billion infrastructure projects under way.

China, Chile seek enhanced trade, investment

Andreas Pierotic, commercial counselor with Chile's embassy in China

"We believe Chinese investors can add competitiveness in our infrastructure sector," said Andreas Pierotic, commercial counselor with Chile's embassy in China.

At present, the two parties are pushing ahead negotiations on investment. Statistics show that the total amount of investment of Chinese enterprises in Chile is only about $1.6 billion in 2013. However, more investment is expected to happen between China and Chile in the sectors of infrastructure and energy.

Next year will see an increase in trade between China and Chile, on the heels of the 10th anniversary of the signing of a free trade agreement between the two countries, as a series of FTA items will be fully enforced, including the zero tariff on the entire range of products.

Since 2015, all agricultural products, including wine products, will be free of the import tax in China's market.

In the past 10 years, China and Chile have gradually phased in a zero duty treatment that covers 97 percent of their products. Accounting for 84 percent of the export from Chile to China, under the agreement the products most significant to the Chinese markets are copper and other minerals, vegetables, fish oil, meat, cherries, plums and nectarines. They have entered the Chinese market at a reduced rate over the first 5 years of the agreement.

The two longstanding friends will see closer cooperation in many sectors, soon. Among the major copper producers in the world, Chile exports on-third of the copper products every year and sees China as the largest partner in the market.

More 20 Chilean winery companies have opened their business in Shanghai, developing vineyards and joint ventures with Chinese partners.

Signed in November 2005 by then Chinese President Hu Jintao and former Chilean President Ricardo Lagos, the China-Chile Free Trade Agreement entered into force in October 2006. Under the Agreement, the two countries have also further strengthened exchange and cooperation in such areas as economy, SMEs, culture, education, science and technology, and environmental protection.

In 2013 Chile's exports to APEC countries reached to $ 49.829 billion, accounting for 65 percent of Chile's total annual exports in the world. Chile imported from APEC countries various products worth $ 45.56 billion, accounting for 58 percent of Chile's total annual imports.

In addition, talks focused on avoidance of double taxation between China and Chile began when President Michelle Bachelet conversed with President Xi Jinping during the APEC meeting this November. This month, negotiations took place in Chile in regards to the double taxation issue between the tax authorities from both countries.

In 1997, Chile started to negotiate bilateral agreements for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital. Now the avoidance of double taxation between Chile and 25 countries around the world has been enforced. Treaties with three more countries - Austria, US and South Africa- have been signed.

"From the Chilean side, we have to calculate how much tax (might be deducted) to see if that amount of money can be compensated through gaining some advantages in other field related with Chinese investment, for example, creating jobs, adding values to our economy through projects that are fruitful," said Pierotic.