What impact could you see on a FTA in between Peru & China?
Post 1 of 10
China and Peru started the study for a potential FTA
Wednesday May 16 2007
(AFP) Peru and China started a joint study this week about the possibility to implement a Free Trade Agreement (FTA) in between them. The results will be completed in three months.
The first meeting about this potential Free Trade Agreement took place in Beijing on May 14 & 15, was stated publicly by the Ministry, emphazising that Peru for China is besides a commercial partner an important investor. Both teams will finalize the study in 3 months.
China is the 2nd commercial partner after USA. Being the 2nd destination for the exports as well as 2nd in volume of imports.
In 2006, as per Chinese statistics, the Peru-China commerce reached 3.92 billions USD. This was higher by 35.8% from previous year. From this amount,2.91 billion USD are from Peruvian exports to China and 1.01 billion USD are from Chinese imports.
I saw this news on the local peruvian newspaper today, and thought that if positive, there could be opportunities to find markets for both peruvian exports as well as chinese exports.
From preliminary review of Chinese political strategy found in many articles. They are securing raw materials from different countries like Oil from Sudan, Ethanol from Brazil, Agriculture and Mining products from Peru, and much more. So this should be part of that strategy a comprehensive agreement to supply resources for Chinese factories that keep growing. What is your comment on this, and if you are actively trading with Latin America or Agriculture and minerals products, how you could benefit fom this situation. Let us know your experiences. What additional opportunities do you see?
Vicente
Wednesday May 16 2007
(AFP) Peru and China started a joint study this week about the possibility to implement a Free Trade Agreement (FTA) in between them. The results will be completed in three months.
The first meeting about this potential Free Trade Agreement took place in Beijing on May 14 & 15, was stated publicly by the Ministry, emphazising that Peru for China is besides a commercial partner an important investor. Both teams will finalize the study in 3 months.
China is the 2nd commercial partner after USA. Being the 2nd destination for the exports as well as 2nd in volume of imports.
In 2006, as per Chinese statistics, the Peru-China commerce reached 3.92 billions USD. This was higher by 35.8% from previous year. From this amount,2.91 billion USD are from Peruvian exports to China and 1.01 billion USD are from Chinese imports.
I saw this news on the local peruvian newspaper today, and thought that if positive, there could be opportunities to find markets for both peruvian exports as well as chinese exports.
From preliminary review of Chinese political strategy found in many articles. They are securing raw materials from different countries like Oil from Sudan, Ethanol from Brazil, Agriculture and Mining products from Peru, and much more. So this should be part of that strategy a comprehensive agreement to supply resources for Chinese factories that keep growing. What is your comment on this, and if you are actively trading with Latin America or Agriculture and minerals products, how you could benefit fom this situation. Let us know your experiences. What additional opportunities do you see?
Vicente
16 May 2007 11:18
Post 2 of 10
Peru signing FTA agreement will surely boost up Peru's economy since Peruian really need those kind of help as far as I know.
However, it really comes to "What" are in the FTA? It is really too earlier to tell.
However, it really comes to "What" are in the FTA? It is really too earlier to tell.
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16 May 2007 19:04
Post 3 of 10
Replying to [Thomas1976]:Dear Thomas
Currently Chinese companies own the two largest iron mining companies in Peru, and are considering bying more mining companies. As they forecast more growth on their industrial output, they need to secure raw materials for their production. Signing a FTA means no tariff, and free flow of Capital and Products.
From the Peruvian Angle
China offer the peruvian companies a vast market for their agricultural and mining products. Peru recently discovered a huge reserve of Natural Gas, and looking for buyers for the next 50 years.
The agro-business in Peru is doubling the output every year as more investors (mostly Americans) are buying land for farming purposes, they have found the right climate and the right soil to make of this business a prosperous one. Also as a side product, Peruvian goverment is doing a heavy campaign to attract rich chinese to consider Peru for their vacation destinations, Peru offer a vast tourist attractions like Machu Pichu in Cuzco, The Amazon River in Iquitos,
From the Chinese Perspective
With the extra cash generated by their succesful trade business, they are looking for opportunities where to invest in the long run. As well as secure source of raw materials. About textiles, China is number one in clothing export, however European appreciate high end textile like egyptian cotton and Peruvian alpaca. Peruvian alpaca textile is highly appreciated all over the world and they are willing to pay the premium for the quality. Chinese are looking forward to help out mass-produce this fiber for the whole world.
Even though Brazil is the largest economy in SouthAmerica, Peru is closer to China and has had a steady economic growth for the past 10 years about 6% on average. much better than Brazil.
Vicente
Currently Chinese companies own the two largest iron mining companies in Peru, and are considering bying more mining companies. As they forecast more growth on their industrial output, they need to secure raw materials for their production. Signing a FTA means no tariff, and free flow of Capital and Products.
From the Peruvian Angle
China offer the peruvian companies a vast market for their agricultural and mining products. Peru recently discovered a huge reserve of Natural Gas, and looking for buyers for the next 50 years.
The agro-business in Peru is doubling the output every year as more investors (mostly Americans) are buying land for farming purposes, they have found the right climate and the right soil to make of this business a prosperous one. Also as a side product, Peruvian goverment is doing a heavy campaign to attract rich chinese to consider Peru for their vacation destinations, Peru offer a vast tourist attractions like Machu Pichu in Cuzco, The Amazon River in Iquitos,
From the Chinese Perspective
With the extra cash generated by their succesful trade business, they are looking for opportunities where to invest in the long run. As well as secure source of raw materials. About textiles, China is number one in clothing export, however European appreciate high end textile like egyptian cotton and Peruvian alpaca. Peruvian alpaca textile is highly appreciated all over the world and they are willing to pay the premium for the quality. Chinese are looking forward to help out mass-produce this fiber for the whole world.
Even though Brazil is the largest economy in SouthAmerica, Peru is closer to China and has had a steady economic growth for the past 10 years about 6% on average. much better than Brazil.
Vicente
17 May 2007 08:05
Post 4 of 10
I suspect that only American investors and rich Peruvians will get the better of the deal since major farmland in Peru (and other South and Central America) are owned by them. Peruvian workers are paid very little, and the raw material are cheap.
Too bad, Brazil is on the other side of the contient. But I am just wondering why Brazil cant do the same business model towards EU as the Chinese toward US. Brazil has lots of cheap labor (not really sure?), lots of able workers, lots of natural resources, closer to EU..... Brazil is such a big nation! I see a lot of potential in Brazil.
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17 May 2007 17:41
Post 5 of 10
Replying to [Vicente]:Peru has signed FTA with South Korea and this brought much protests from the Korean farmers.
With the trade inbalance of about 50%, Peru has much to gain from this FTA across the board. China, however only imports raw materials such as iron and other metal ores. Agricultural produces however are more from Australia and New Zealand. Beside these, Peru has also large exports of fish and sea-food products, which is getting scarce in the Northern Hemisphere. Both Japanese and Taiwanese fishing vessels are milking the resources of the South Pacific Ocean off the coasts of South America.
****
With the trade inbalance of about 50%, Peru has much to gain from this FTA across the board. China, however only imports raw materials such as iron and other metal ores. Agricultural produces however are more from Australia and New Zealand. Beside these, Peru has also large exports of fish and sea-food products, which is getting scarce in the Northern Hemisphere. Both Japanese and Taiwanese fishing vessels are milking the resources of the South Pacific Ocean off the coasts of South America.
****
18 May 2007 18:36
Post 6 of 10
Replying to [Thomas1976]:
Its called politics Tom..... If other S. American countries go "socialist" the way Venezuela has then many foreign companies will stay away as fast as they can..... What comany would invest millions (or in a couple of cases billions) of dollars to see their investment taken away by the government?
S. America is a great region, unfortunately it sffers from a very high degree of corruption, which keeps the majority of the population in poverty, while the few fat-cats have their Swiss bank accounts.....
Its called politics Tom..... If other S. American countries go "socialist" the way Venezuela has then many foreign companies will stay away as fast as they can..... What comany would invest millions (or in a couple of cases billions) of dollars to see their investment taken away by the government?
S. America is a great region, unfortunately it sffers from a very high degree of corruption, which keeps the majority of the population in poverty, while the few fat-cats have their Swiss bank accounts.....
18 May 2007 23:38
Post 7 of 10
Replying to [**** Moby]:Dear ****
I wasn't aware of an existing FTA with Korea already. The advantage Peru is having in the Agro business is the technology being deployed. Peru has a large farm land and no too much population, so it is producing more that what it needs. There is a big demand for their agricultural products in Europe and America currently, but as it increases its output, the productivity is becoming more efficient and now it could enter other markets that may appreciate their quality produces. Peru produces over 1,000 vaireties of potatoes, produces the largest corn kernel in the world, and the asparragus and artichokes are of high quality and in great demand everywhere. Peru has many land that could be converted to farmland, hut need investments in irrigation to bring water from lakes or rivers. It is getting there. The quality of their farm products is greatly appreciated, even we sell them to Ecuador, Venezuela and Colombia, countire which also export food products.
Vicente
I wasn't aware of an existing FTA with Korea already. The advantage Peru is having in the Agro business is the technology being deployed. Peru has a large farm land and no too much population, so it is producing more that what it needs. There is a big demand for their agricultural products in Europe and America currently, but as it increases its output, the productivity is becoming more efficient and now it could enter other markets that may appreciate their quality produces. Peru produces over 1,000 vaireties of potatoes, produces the largest corn kernel in the world, and the asparragus and artichokes are of high quality and in great demand everywhere. Peru has many land that could be converted to farmland, hut need investments in irrigation to bring water from lakes or rivers. It is getting there. The quality of their farm products is greatly appreciated, even we sell them to Ecuador, Venezuela and Colombia, countire which also export food products.
Vicente
19 May 2007 00:31
Post 8 of 10
Replying to [Foow]:Dera Foow
Every country is independent. I can not assume because because North Korea is a communist country, all the neighbors will follow their ideology. Venezuela is not a "socialist" government, it is becoming a dictatorship because the oil trade is giving him billions of dollars daily, and believe whe can do whatever he wants.
On the other side, no company who was kicked out from Venezuela or Bolivia went home empty handed. they were paid their sahres at market value.
Most of the top members of the Chinese Communist Party are owners of big factories, as they knew ahead of time which business were about to grow, they either bought factories on those segments or become major shareholders to benefit from the insoide information and now they are the new billionaires in China. So corruption is there too.
In the long run, those chinese billionaires need to invest their money in something. They can not put it under their matress. They need to find opportunities where to invest, and FTA is an alternative to consider.
Vicente
Every country is independent. I can not assume because because North Korea is a communist country, all the neighbors will follow their ideology. Venezuela is not a "socialist" government, it is becoming a dictatorship because the oil trade is giving him billions of dollars daily, and believe whe can do whatever he wants.
On the other side, no company who was kicked out from Venezuela or Bolivia went home empty handed. they were paid their sahres at market value.
Most of the top members of the Chinese Communist Party are owners of big factories, as they knew ahead of time which business were about to grow, they either bought factories on those segments or become major shareholders to benefit from the insoide information and now they are the new billionaires in China. So corruption is there too.
In the long run, those chinese billionaires need to invest their money in something. They can not put it under their matress. They need to find opportunities where to invest, and FTA is an alternative to consider.
Vicente
19 May 2007 00:55
Post 9 of 10
"Currently, Chile is the only other country in Latin America that has an FTA with China. This makes Chile both the country Peru is trying to emulate and the one it is trying to beat at its own game. Garcia is hoping that an agreement with China will be a major step toward catching up with Chile's superior economy and Asian alliances.
China knows that Peru has valuable metals to sell -- especially copper and zinc -- as well as timber and fish, and China has a voracious appetite for these materials. Moreover, because China is an emerging global power (albeit an internally weak and unstable one), any move it makes on the global geopolitical stage tends to be politicized quickly and perceived as a threat by countries that are unsure of Beijing's longer-term intentions. Thus, striking up alliances based on economic (rather than military) cooperation and being seen as an economic partner offers Beijing a less politicized way to kill two birds with one stone: maintain domestic economic growth and hence internal stability, and maintain its image as a nonthreatening global "stakeholder" as it pursues energy security acquisitions around the globe."
http://www.stratfor.com/products/premium/read_article.php?id=288755
China knows that Peru has valuable metals to sell -- especially copper and zinc -- as well as timber and fish, and China has a voracious appetite for these materials. Moreover, because China is an emerging global power (albeit an internally weak and unstable one), any move it makes on the global geopolitical stage tends to be politicized quickly and perceived as a threat by countries that are unsure of Beijing's longer-term intentions. Thus, striking up alliances based on economic (rather than military) cooperation and being seen as an economic partner offers Beijing a less politicized way to kill two birds with one stone: maintain domestic economic growth and hence internal stability, and maintain its image as a nonthreatening global "stakeholder" as it pursues energy security acquisitions around the globe."
http://www.stratfor.com/products/premium/read_article.php?id=288755
19 May 2007 06:58
Post 10 of 10
Quoting from[Foow]:
Replying to [Thomas1976]:
Its called politics Tom..... If other S. American countries go "socialist" the way Venezuela has then many foreign companies will stay away as fast as they can..... What comany would invest millions (or in a couple of cases billions) of dollars to see their investment taken away by the government?
S. America is a great region, unfortunately it sffers from a very high degree of corruption, which keeps the majority of the population in poverty, while the few fat-cats have their Swiss bank accounts.....
We all know what we are talking about. XD
Lets just hope that it will benefit all Peruvians rather than a FTA that goes only to those FAT CATS. As for China, no doubt it will benefit them.
The best way for the Peruvians to benefit is to have a stable government who knows what to do with those Chinese investment monies. **** had mentioned Iron, Mineral mines. This may be the mostly likely investment Chinese are going to put in.
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About Our Company
RYU MEI CO LTD
Ryu Mei is a health and food trading company in Kobe, Japan. Ryu Mei a Japanese food specialist company with products like Kurobuta (Berkshire) , Wagyu (Kobe Beef) , Shochu, Organic Green Tea and Black Vinegar Ku...
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20 May 2007 17:04
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