Following agreements between the two countries, Colombia’s cattle industry expects a surge in shipments to China, while China’s cell phones will boom in South America, the Colombian consul general in Hong Kong stated this week.
Cattle reared utilizing silvopastoral practices in Colombia provide more milk and allow forests to grow again. (Source: Mongabay)
China Trade Connection of Cattle Industry
Analysts say China’s strengthened trade connections will strengthen its presence in Latin America, which is historically allied with the US, its greatest trade partner. On Tuesday, Colombian Consul General Luis Fernando Orozco Barrera told the Post that a September bilateral protocol on farm product sanitation will boost cattle industry exports to China. He stated Colombia’s cattle industry employs just under a million people or 7% of the workforce. Colombia sold 45,000 tons of beef for US$200 million last year. Its 2023 global beef shipments were 22,000 tons worth US$90 million as of August. He stated that they anticipate exporting at least 2,500 tons per month to China, worth approximately $15 million. In macroeconomic terms, Colombian livestock is 3.3 times larger than the coffee sector, making it the third largest worldwide coffee producer, according to Orozco, citing government and industry association figures. Zhao Xijun, a Renmin University finance expert, says China can import more beef from Australia, Brazil, and the US. Zhao said, “From a demand standpoint, what we get now doesn’t feed the whole market.” Orozco said Columbia ranks China as the world’s largest beef importer, accounting for 25%.
On October 25, Colombian President Gustavo Petro signed 12 commercial agreements with Xi Jinping in Beijing. One involves exchanging “planning and guidance” in agriculture for five years, Orozco added. The two countries also upgraded their bilateral ties to a “strategic partnership” last month, which normally entails using specific problem-solving and information-exchange mechanisms. Orozco said Colombia is a growing smartphone market for China. Colombia’s 52 million people have more disposable income due to a decade-long economic boom. Xiaomi and Oppo were Colombia’s second and third smartphone vendors in Q1 2023, following Samsung. Counterpoint reported that the two Chinese brands held a 28% market share in January and March. According to Orozco, the technology industries, notably computers and mobile phones, play important roles in bilateral commerce exchange. He said Colombia had 71 million mobile subscribers. He stated that all of this makes Colombia highly appealing, especially given that we are set to hold a public auction for 5G networks in 2024.
China exported US$15.6 billion of the US$22.64 billion in two-way commerce last year. Some of the 12 October 25 deals demand decarbonization, water conservation, and digital economy development in Colombia. Colombia and most of Latin America have traditionally relied on the US for business due to proximity and old relationships. China has a free-trade agreement with Chile and is pursuing one with Argentina and Brazil, the region’s largest economy. China became Colombia’s second commercial partner last year behind the US due to high import-export receipts. The 12 agreements with China, according to Enrico Cau, an associate researcher with expertise in Asia at the Taiwan Strategy Research Association think tank, will assist Colombia in expanding its trade options by creating alternatives to its conventional, long-standing, and essentially exclusive partnership with the US as its main trading partner. Diversification will offer Colombia more leverage in trade negotiations, he said. From a political standpoint, China’s growing influence in Latin America seems to indicate an endeavor to diversify trade prospects and a potential need to extricate Latin American countries from US reliance, Cau added.
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