China: how Brazil was key to Latin America breaking export records for the country in 2023

Trade between China and Latin American countries reached an all-time high in 2023.

The exchange of goods between the region and the Asian giant exceeded US$480 billion, according to calculations prepared by BBC News Mundo, the BBC’s Spanish-language news service, based on data from the Customs Administration of the People’s Republic of China (AGA, its acronym in English).

The trade balance was relatively balanced, with a slight surplus in favor of Latin America of US$2 billion (around R$10 billion).

The new record in merchandise trade with China constitutes another step in an upward trend that has been recorded throughout this century.

The Asian country’s bilateral exchange with Latin America and the Caribbean (LAC) barely amounted to around US$14 billion in the year 2000, according to the Economic Commission for Latin America and the Caribbean (ECLAC).

Thus, the increase has been exponential in almost a quarter of a century.

“In the period from 2000 to 2022, trade in goods between the region and China was multiplied by 35, while the region’s total trade with the world was only multiplied by 4,” stated ECLAC in its report International Trade Perspectives 2023 .

Thanks to this increase, China became Latin America’s second trading partner as a whole, surpassing the European Union as South America’s main partner.

This intensification of trade ties with Beijing has been uneven, which has resulted in the fact that while some countries in the region enjoy a trade surplus, others are running a deficit.

But which Latin American countries export the most to China, and what do they sell to it?

According to CEPAL, the bulk of Latin American exports to China are concentrated in six products (soy, copper and iron ores, oil, copper cathode and beef), which together correspond to 72% of the total.

The region’s imports from China, on the other hand, consist mainly of manufactured products, which “expanded access for families and companies, but also displaced regional production”, notes CEPAL.

Below, check out the five Latin American countries that exported the most to the Asian giant, according to data from the Chinese Customs Administration for the year 2023.

Brazil is, by far, China’s main trading partner in Latin America.

In 2023, bilateral exchange totaled US$181 billion (around R$939 billion), of which US$122 billion (R$629 billion) represented exports from the South American country, which achieved a trade surplus of US$63 billion (R$356 billion).

These results not only make Brazil the Latin American country that exports the most to China, but also “one of the few countries in the world that has a trade surplus with China”, according to the international consultancy Dezan Shira & Associates, in its report China Briefing, 2023.

And it is possible that this relationship will continue to grow, judging by the 15 bilateral trade agreements valued at around US$10 billion (R$51 billion), which were signed by the two countries during the official visit of President Luiz Inácio Lula da Silva ( PT) to China, in 2023.

But what does Brazil sell to China?

Among the main products exported are: soybeans (35.4% of the total), iron (20.2%), oil (18.6%), frozen beef (8.82%) and cellulose pulp (3. 36%), according to data from the Economic Complexity Observatory (OEC).

Chile is the second Latin American country that exports the most to China — and is also second on the list of those with the largest trade surplus.

In 2023, Chilean exports to China exceeded US$43 billion (R$22 billion), while its surplus with the Asian country reached US$23 billion (R$119 billion), according to data from the Customs Administration of the People’s Republic of China .

The Asian giant is Chile’s main trading partner.

Copper (raw and refined) is by far the main product that Chile exports to China, according to OEC data.

Another product that stands out is seedless fruit, of which Chile is the main exporter worldwide — and China, the largest importer. In 2022, Chile sent the equivalent of US$2.45 billion (R$13 billion) of this type of fruit to the Asian country, supplying more than two thirds of Chinese imports, worth US$3.58 billion (R$18 billion).

The figures for Chilean exports of inorganic chemical products, such as precious metal compounds and isotopes, also draw attention.

In 2005, Chile was the first Latin American country to sign a free trade agreement with China and, according to researcher Evan Ellis, it owes much of its good results to its marketing strategy.

“Chile’s success is partly due to the promotion of its ‘national brand’ in the People’s Republic of China. Chile has successfully marketed its grapes, cherries and blueberries in China as ‘luxury goods’ associated with Christmas festivities and the exchange of gifts, allowing them to sell them at a higher price, including importing and shipping them through ( transportation) expensive, such as airplanes and refrigerated containers”, noted Ellis, in an article published in December 2023.

With exports that in 2023 exceeded US$25 billion (R$129 billion), Peru occupies third place on the list of Latin American countries that sell the most to China—and among those that achieved the largest trade surplus (more than US$ $13 billion / R$67 billion, according to AGA data).

Since 2009, when both countries signed a free trade agreement, the Asian power has become Peru’s main trading partner.

Between 2010 and 2023, Peru’s exports to China quadrupled, according to a recent analysis by the Andrés Bello Foundation – Chinese Latin American Research Center.

The main products that Peru exports to China are minerals, as well as animal feed.

Although Peru sells a wide variety of minerals to China, including iron, zinc and precious metals, the majority of these exports are copper, which represented more than 60% of the total in 2019.

Among the five Latin American countries that export the most to China, Mexico is the big exception, since its trade balance with the Asian giant is unfavorable.

In 2023, the North American country’s exports to China totaled more than US$18 billion (R$93 billion), but its imports totaled US$81 billion (R$418 billion). The result? A trade deficit for Mexico of US$62 billion (R$320 billion).

Mexico’s trade relationship with China is also different because among its best-selling products are manufactured goods — and not just raw materials.

So, for example, in February 2024, the main Mexican exports to the Asian giant were integrated circuits (US$232 million / R$1.2 billion), medical instruments (US$150 million / R$775 million), precious metals (US$91 million / R$470 million), copper (US$73 million / R$377 million), as well as engines, parts and accessories for vehicles (US$71 million / R$366 million), according to OEC data.

For years, the relationship between Mexico and China has been complex because, due to their export profile, both countries have been competitors, especially since China’s accession to the World Trade Organization (WTO). This competition is quite fierce, especially with regard to the supply of manufactured products to the US market.

According to Liu Xuedong, professor at the Faculty of Economics at the National Autonomous University of Mexico, relations between these economies are increasingly interdependent.

This is partly explained by the fact that China plays a prominent role in the supply chain that allows Mexico to produce many of the goods it exports to the US.

“In this context, the trade flows in question are not only the bilateral ones between China and Mexico, and Mexico and the United States, but also the trilateral China-Mexico-United States trade flows that connect the three countries, in which the Mexico has become a “springboard and assembly site” with a growing presence of products in the North American market”, wrote the academic in a recent article published by the digital magazine ThinkChina.

With exports that in 2024 totaled more than US$7.9 billion (R$41 billion), Ecuador is the fifth country in Latin America that exports the most to China, with which it had a trade surplus of more than US$1, 9 billion (R$ 10 billion).

Both countries signed a free trade agreement in May 2023 — and it is estimated that this agreement will help increase Ecuadorian exports by 30% during the first three years of its entry into force.

China is already the main buyer of Ecuadorian non-oil products.

Among the Ecuadorian products most exported to China are: crustaceans, copper ore and precious metal ores, according to OEC data.

Among other products that stand out — and which should benefit from the trade agreement — are bananas, which are expected to double sales, and cocoa.

The Chinese market has become one of the most profitable for selling cocoa thanks, among other things, to the fact that consumers are willing to pay more to obtain a premium quality product, as explained by Francisco Miranda, president of the National Association of Cocoa Exporters of Ecuador, when the trade agreement was signed.