Colombia’s President Ivan Duque will visit his counterpart Xi Jinping in China next week in an attempt to strengthen trade relations, his foreign minister said Monday.
Duque will travel to China for a three-day visit on July 29 “to facilitate the entry of new Colombian goods and services to the Chinese market” and to “promote increased presence of Chinese investors in Colombia,” Foreign Minister Carlos Holmes Trujillo told press.
The visit comes in the midst of a trade war and tensions over neighbor Venezuela between the United States, Colombia’s main trading partner, and the Chinese superpower.
Colombia has been caught in the middle of the battle between these giants.
Priority: trade
Duque’s expressed priority is to increase exports to China and seek more investment from Beijing as trade with the US appears to have been slow.
Following a free trade agreement with the United States in 2012, exports to that country stagnated and dropped significantly in 2014 amid a collapse of global oil prices, Colombia’s main export product.
Exports to China also collapse that year, but have since seen spectacular growth.
Last year, the Asian superpower became Colombia’s second largest export market, primarily because of China’s imports of fossil fuels.
US President Donald Trump’s protectionist trade policy has hurt Colombia’s sectors, particularly in manufacturing, which is hampering economic growth and job creation in the South American country.
Colombia’s exports to the US and China
Source: DANE
Balancing the trade deficit
The free trade agreement additionally turned Colombia’s trade surplus to the US into a deficit, which hurt the agricultural sector to the extent that it spurred a violent uprising in the countryside in 2013.
Colombia has never had a trade surplus with China, but Colombia has been able to reduce its trade deficit gradually since 2015.
Colombia’s trade balance
Source: DANE
Foreign investment
Foreign investment from China, however, has been only a fraction of that of the US.
While the world’s largest economy last year invested almost $2.5 billion, China invested no more than $32.2 million.
According to Trade Minister Jose Manuel Restrepo, “China is a natural destination to find investment opportunities in non-mineral-energy products: mega-projects in transport, infrastructure, energy, agro-industry and industry 4.0.”
If Duque, Trujillo and Restrepo are able to increase China’s stake in Colombia’s economic development, this could help their so-far disappointing economic results.
Foreign direct investment
Source: DANE
Venezuela
According to Trujillo, the talks will also be about “regional issues, including the situation in Venezuela and the associated migratory phenomenon.”
Colombia and the US have been the most vociferous opponent of disputed Venezuelan President Nicolas Maduro, who is kept in power partly because of support from Russia and China.
But Xi taking Duque’s opinions on geopolitics seriously would be an extraordinary novelty. So far, the president’s foreign policy doesn’t seem to have made much of an impression or impact abroad and has mainly been used for domestic posturing.