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The China-Chile Free Trade Agreement was signed in mid-November. The tariff concession process for both sides of the goods trade will start fully on July 1, next year.
The "Free Trade Agreement between the Government of the People's Republic of China and the Republic of Chile" signed in mid-November is the second free trade agreement signed by China after the China-ASEAN Free Trade Agreement and the first signed by China and Latin American countries. Trade Agreement. According to the agreement, starting from July 1, 2006, the two countries will fully launch the tariff reduction process for goods trade, and the products that account for 97% of the total number of tax items in the two countries will be reduced to zero tariffs in phases within 10 years.
The reporter learned from the International Department of the Ministry of Commerce that the products exported by China to Chile are mainly electromechanical (including automobiles), textiles, and home appliances. The signing of the China-Chile Free Trade Agreement will further strengthen the economic and trade exchanges between the Chinese auto industry and Chile.
$10,000 or so car is popular
According to figures provided by the Chilean Embassy in China, bilateral trade between China and Chile was approximately US$5.25 billion in 2004, a year-on-year increase of 52%. In the first nine months of this year, bilateral trade volume between China and Chile reached US$5.3 billion, an increase of 36% over the same period of last year.
The relevant personnel of the International Department of the Ministry of Commerce of China participating in the negotiation of the China-Chile Free Trade Agreement said that within five years after the China-Chile Free Trade Agreement entered into force, Chinese mechanical and electrical products, including automobiles, will enter the Chilean market with zero tariff.
According to estimates by the National Automobile Association of Chile, Chile’s car sales this year are expected to reach 175,000 to 185,000 vehicles, an increase of 18% from 2004, and will be in line with the historic record of the country’s auto sales in 1997. According to the association’s survey, the sales of cars with a price of about US$10,000 increased rapidly in the local area, and the growth rate in 2004 was 40%, which exceeded the average increase in car sales.
The National Automobile Association of Chile also estimated that by 2007, Chile’s car ownership could reach one car for every six people, and by 2010 it would reach one car for every five people, catching up with Argentina and Brazil respectively. Family sedans and economical and practical passenger cars occupy the majority of the Chilean car market, but in recent years, small passenger cars have also begun to emerge on the Chilean car market.
Half of imported cars from Japan and South Korea
According to the relevant personnel from the International Department of the Ministry of Commerce, the products currently exported from Chile mainly focus on resource-intensive products, such as agricultural products and forest products, and have formed complementary advantages with the products that China has exported to Chile.
Chile’s “Strategic News†reported that, according to Chilean customs statistics, from January to July this year, Chile imported a total of 109,000 cars, the import value reached 964 million US dollars, respectively, compared with the same period in 2004 increased by 35.4% and 45.4%. Among them, the number of cars imported from Japan increased by 32%, and the number of cars imported from South Korea increased by 43%. Cars from Japan and South Korea now account for 49% of Chile’s total car imports. The report also showed that due to the low cost of Chinese auto production and its price advantage, many Chilean car dealers are optimistic about the performance of Chinese cars after entering the Chilean market. They believe that Chinese cars will mainly target consumers with low purchasing power.
Local auto industry insiders estimate that Chinese autos may be 15% to 30% lower than the prices of Chilean equivalent cars, which makes them more competitive, especially for PALIO and CORSA, which are currently hotter in Chile. The car poses a great threat.
Euro IV will be mandatory next year
"The signing of the China-Chile Free Trade Agreement not only means that the door of the Chilean market is further open to Chinese products. From a deeper point of view, Chile will also become a bridge for Chinese products to enter markets in Latin America." Second Secretary of the Chilean Embassy in China, APEC Mario Altaza, chairman of the organization's budget and management committee, said optimistically.
He told reporters that Chile is currently the country with the largest number of free trade agreements signed by the world. Prior to this, it had signed free trade agreements with 13 countries such as the United States, the European Union, Canada, and Mexico and the economic community. "Companies in Chile can sell products to millions of consumers in Latin America, the United States, and Europe at low or zero tariffs."
He reminded that the biggest problem that Chinese companies may face when they use the "East Wind" of the free trade agreement to expand their exports and even build factories in Chile is to overcome cultural barriers, including language barriers.
In addition, most products in the Chilean automotive market can meet Euro III emission standards. In 2006, Chile will also impose Euro IV standards. Some local automobile dealers believe that the biggest challenge for Chinese auto products entering the Chilean market is how to meet Chile’s environmental protection and safety requirements.
The relevant person in the International Department of China’s Ministry of Commerce stated that after the signing of the China-Chile Trade Agreement, many companies have called the company to inquire about how to better enter the Chilean market. The Ministry of Commerce will bring along all parties concerned to assist enterprises to go out faster and better during the transition period of the China-Chile Free Trade Agreement. (Liu Xiaobing)