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3.5 Potential Trade Opportunities

Export Opportunities

Given Chilean consumers’ ready acceptance of China-made products, Chile is a lucrative export market in many respects. Aided by sustained food and commodity prices, Chile has achieved remarkable progress in improving the living standards of people in the past few years after the substantial regional slowdown in the period 1998-2003. Against this backdrop, Hong Kong’s total exports to Chile rose by a CAGR of 10% between 2003 and 2007. To a large extent, Chile welcomes Hong Kong products. In fact, Hong Kong products are nothing strange to Chilean consumers. Most of the Chilean buyers appreciate the difference, in terms of quality, design, delivery and reliability, between products supplied by Hong Kong and mainland companies, though they recognise the fact that most Hong Kong products are made in the Chinese mainland and the quality and reliability of indigenous Chinese products are fast improving.

With a dearth of broad-based consumer goods production, Chile’s steadily growing economy has engendered a sustained demand for quality imports. Hong Kong and mainland consumer products therefore become very attractive to Chilean consumers. Product-wise, Hong Kong companies look set to have decent potential in consumer electronics, particularly computers and telecommunications products. Other popular items include garments, footwear, watches, and toys and games.

Hong Kong as a Platform for Sino-Chilean Trade

For many years, China has been one of Chile’s major sources of imports. With growing interest and confidence in sourcing and consuming Chinese products, Chile’s imports of Chinese products recorded a CAGR of 46% between 2003 and 2007. Nowadays, China has become Chile’s second biggest import source, behind only the US. Reinforced by the China-Chile free trade agreement, China accounted for more than 11% of total Chilean imports in 2007, vis-à-vis the US’s share of 17% . On the export front, China replaced the US (13% share of the total) as Chile’s biggest export destination, taking in more than 15% of total Chilean exports in 2007.

 

 

 

US$ Million

% Growth 06/07

% Share in 2007

1

US

7,275.5

 

30.5

 

17.0

 

2

China

4,881.5

 

40.0

 

11.4

 

3

Brazil

4,496.5

 

6.1

 

10.5

 

4

Argentina

4,307.6

 

-3.8

 

10.1

 

5

South Korea

3,083.7

 

88.2

 

7.2

 

6

Peru

1,685.8

 

18.2

 

3.9

 

7

Japan

1,583.4

 

38.1

 

3.7

 

8

Germany

1,568.0

 

25.8

 

3.7

 

9

Mexico

1,347.4

 

34.7

 

3.2

 

10

Canada

974.0

 

102.4

 

2.3

 

Source: National Customs Services

Total Exports by Selected Countries in 2007

 

 

US$ Million

% Growth 06/07

% Share in 2007

1

China

9,980.3

 

101.9

 

15.2

 

2

US

8,419.2

 

-5.9

 

12.8

 

3

Japan

7,097.0

 

17.5

 

10.8

 

4

Netherlands

3,909.4

 

2.5

 

5.9

 

5

South Korea

3,849.3

 

13.0

 

5.9

 

6

Italy

3,454.0

 

22.8

 

5.3

 

7

Brazil

3,356.2

 

21.7

 

5.1

 

8

France

2,411.7

 

-0.9

 

3.6

 

9

Mexico

2,367.7

 

3.8

 

3.6

 

10

India

2,211.5

 

48.2

 

3.4

 

Source: National Customs Services

As bilateral trade and economic cooperation continue to fare well between the two countries, China is expected to surpass the US and become Chile’s largest trading partner by the end of 2008, and Hong Kong’s role in facilitating Sino-Chilean trade will be strengthened, especially in helping Chilean companies to tap into the mainland market. By and large, Chilean businesspeople appreciate Hong Kong traders’ better English proficiency, higher compliance of international product safety standards and better sense of product trends and designs. Meanwhile, many Chilean companies are still unfamiliar with China’s business environment and practices, and many of them have therefore encountered technical and management problems when liaising and cooperating with Chinese manufacturers and suppliers. With the edge in doing business on the mainland, Hong Kong companies can help Chilean companies overcome these problems. Moreover, Hong Kong traders’ language advantages and extensive business networks throughout the Chinese mainland can certainly foster Chilean business ties with China. Among many others, copper, wine, fresh fruits and vegetables, and marine products, in which Chile is renowned, are believed to have lucrative potential in the Chinese mainland.

Content provided by Hong Kong Trade Development Council
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