China Establishes Another Foothold In the Western Hemisphere: China - Chile Currency Swap

China Establishes Another Foothold In the Western Hemisphere: China – Chile Currency Swap

Despite the poor Chinese reputation in the Western Hemisphere, they have come up with another vehicle to stabilize its economy.

The following article reports the Memorandum of Understanding (MOU) between Chile and China:

Chilean central bank strikes deal with China to expand currency swap to $7.1 bln

Bonds News July 24, 2020 / 1:07 PM

SANTIAGO, July 24 (Reuters) – Chile’s central bank said on Friday it had reached a deal with China to expand an existing currency swap line to 50 billion yuan ($7.1 billion) to stabilize markets and ease the South American nation´s ailing economy through the ongoing coronavirus pandemic.

China, Chile´s top trade partner, had previously agreed to a 22 billion yuan ($3 billion) swap. Besides more than doubling the amount available to Chile, the Chinese central bank also agreed to expand the ways in which the swap line could be used.

“In addition to…facilitating Chile’s foreign trade operations with China, these resources may also be used to contribute to the stability of financial markets,” the Central Bank said in a statement.

The bank said the deal with China would shelter Chile´s economy from shocks on international financial markets.

There is an interesting point in this MOU. This agreement doubles the amount of currency in the swap line program. Chile will be able to increase the buying power of its trade with China. The MOU also includes a doubling of exports of Chilean fruit to China.

In a re-print of “Fresh Plaza” News Dog writes —

Chile signs historic memorandum of understanding with China

The Chilean Fruit Exporters Association (ASOEX) announced the signing of an important Memorandum of Understanding (MOU) with the China Chamber of Commerce of Import & Export of Foodstuffs & Native Produce (CCCFNA) in a move that will both consolidate and deepen the cooperation and communication between the two nations regarding the production, export and import of fresh fruits.

The MOU was inked virtually on 17th of July, 2020, by Mr. Ronald Bown, Chairman of ASOEX, located in Santiago, Chile; and Mr. Xu Xiaohu, the Vice-President of CCCFNA, based in Beijing, China.

The MOU will promote collaboration across a number of strategic areas, as well as the exchange of information for the benefit of both the Chilean and Chinese fresh fruit industries.

Under the accord, ASOEX and CCCFNA agree to the following:

  1. To support trade visits between Chile and China for representatives from each association;
  2. To exchange technology and technical expertise;
  3. To exchange statistical data (export and import), regulatory legislation, customs procedures information; and
  4. To support each other’s publicity and promotional activities, where appropriate.

Under the agreement, ASOEX and CCCFNA will assist travel visits for delegations from either association to understand and assess the inner workings of each other’s fresh fruit industries.

On a technology front, the two organizations will exchange their expertise across a number of areas, such as production. For example, to benefit the development of China’s production of different temperate fruits during Chile’s offseason, ASOEX will facilitate information and contacts in regards to best practices currently being implemented in Chile.

With regards to sharing data and administrative information, the two organizations will work jointly to ensure full awareness of all import requirements for fresh fruit. For instance, following the recent opening of the Chinese market to Chilean citrus, the MOU will facilitate communication concerning the different customs requirements, and the condition of the first arrivals, among other details.

As for promotional support, when carrying out marketing initiatives in China ASOEX will coordinate closely with CCCFNA to exchange ideas, gain insight and encourage involvement from both sides in order to maximize the overall impact of promotional activities on the Chinese market as well as for CCCFNA members.

China remains by far Chile’s largest export market in Asia. According to data from ASOEX, Chile exported 449,575 metric tons of fresh fruits to China during the 2018-2019 season, an increase of 16.62 per cent compared with the previous season (2017-2018).

Of that total, cherries were the largest export item during the 2018-19 season (157,812 tons), followed closely by table grapes (106,923 tons, plums (76,580 tons), apples (40,294 tons), kiwifruit (21,483 tons), nectarines (20,063 tons), avocados (14,736 tons), blueberries (9,913 tons), and pears (1,771 tons).

Since 2018, Chile has ranked as the world’s leading supplier of fresh fruit to China in terms of value. During the first two months of 2020, once again Chile represented the world’s most important supplier of fresh fruit to China in value terms.

This MOU is not fully in the public domain but the news reports suggest that further agreements are forthcoming.

Patriots Soapbox News is following this and other developments of the Chinese objective to become the Global Economical Leader.

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