China becomes fast-growing market for Argentina's agricultural products

BEIJING - More Argentine agricultural products are expected to enter China's market, said Gustavo Martino, the Argentine ambassador to China, underscoring the South American country's effort to strengthen trade ties with China.

"China is a very important trade partner for us. We are interested in developing business relationships in sectors with more value-added products," Martino said in a recent interview.

These products include wine, tobacco, beef, barley and honey, and Argentina is looking forward to entering China's dairy market through cooperation with domestic dairy companies, the ambassador said.

Julian Dominguez, Argentina's agriculture minister, said during a recent visit to Beijing that the two governments were negotiating about importing Argentine corn into China by 2012.

"Besides corn, we are also looking forward to exporting more value-added agricultural products to China," Dominguez said.

Frequent state visits between the heads of the two governments in recent years marked increasingly close bilateral ties.

Argentine Foreign Minister Hector Timerman, leading a large delegation of trade officials and companies, is coming to Beijing to meet his Chinese counterpart, Yang Jiechi, and Chinese Vice-President Xi Jinping, according to the embassy.

Trade between China and the second-largest economy in Latin America has maintained an upward trajectory. In 2010, China emerged as Argentina's second-largest export market.

Total bilateral trade last year doubled to $13 billion, with Argentina's exports to China jumping 58 percent to $5.8 billion, while its imports doubled to $7.2 billion, according to the Chinese Ministry of Commerce.

Trade in agricultural products accounts for more than 85 percent of total trade volume, said the ambassador, stressing the pivotal role it plays in bilateral trade relations.

The surging bilateral trade, however, has been accompanied by more trade disputes.

As of the end of 2010, Argentina had launched 84 trade investigations against Chinese products, covering sectors including light industry, textiles, machinery and automobiles.

In Latin America, "Argentina launched the most trade investigations against Chinese exports. The moves not only reduced China's export volume to Argentina but also prompted other Latin American countries to follow suit, and therefore affected China's exports to these countries", said an investment report from the Chinese Ministry of Commerce in April.

But according to the ambassador, trade friction is mostly a byproduct of fast economic growth in both nations and their booming economic cooperation.

Given the circumstances, "some trade frictions are inevitable", he said.

But the ambassador said he believes things are getting better. According to data from the embassy, Chinese exports to Argentina rose 43 percent year-on-year during the first seven months of this year, "thanks to the willingness and commitment of both governments", Martino said.

Sun Hongbo, an economic specialist at the Institute of Latin American Studies at the Chinese Academy of Social Sciences, said the number of trade disputes is unlikely to increase in the future.

"The two countries are interdependent. China is one of the most important export markets for Argentina, and at the same time, China also needs Argentine agricultural products," Sun said.

"Governments on both sides are likely to work together to reduce friction," he added.

Luis Kreckler, Argentine secretary of trade and international economic relations, said the trade disputes, while affecting certain industries, did not interrupt the development of bilateral economic cooperation.

"We care about the partnership with China and are very optimistic about future cooperation," he said.

China Daily

(China Daily 09/09/2011 page14)