China and Panama are destined to be natural partners

For Wei Qiang, Ambassador of the People’s Republic of China in Panama , October 21 is a memorable day.

Three years ago on a day like today, “I got up early for the first time in Panama as the ambassador of China, accredited to this beautiful country.”

Four months earlier, in June 2017, Panama established diplomatic relations “with the vehement desire to build a relationship of association, cooperation and win in pursuit of the goal of common development,” he said.

Ambassador Wei Qiang highlighted that a second reason for satisfaction, regarding this day, was the possibility of participating, and opening the Forum organized by Capital Financiero and Connectax, China and the business opportunities in the post-COVID-19 economy .

The event took place this Wednesday, October 21, moderated by Hitler Cigarruista, director of Capital Financiero and with the sponsorship of the Embassy of the People’s Republic of China in the Republic of Panama.

The ambassador said he was convinced that China and Panama “are destined to be natural partners to carry out good business with each other, and generate benefits for both parties, given the extraordinary geographical position of Panama that radiates to the rest of the region.”

When carrying out an evaluation of these three years, he said that “the commercial flow has registered continuous and very strong growth between China and Panama.”

He points out that in terms of volume, and according to statistical data from the United Nations (UN), China was “Panama’s first commercial partner.”

It is worth mentioning, he added, that this upward trend in our bilateral trade has a favorable connotation from the point of view of the trade balance, with the increase in Panamanian exports : meat, aquatic products or copper ore.

In this way, he argued, the traditional direction and sense of this bilateral exchange was reversed, still with a modest margin.

“The Chinese market is dynamic and above all large, broad, and of increasing depth in terms of purchasing power, as the number of middle-class consumers increases,” he explained.

He analyzed that this scenario is further strengthened “by the resolute policy of openness with which the Chinese government is committed, in line with its effort to promote economic globalization in a direction of more equity, inclusion and general benefits, always advocating for in favor of trade liberalization and facilitation ”.

The Ambassador Wei Qiang admitted that the world faces difficult times of economic crisis and unprecedented socio economic circumstances.

He said that China , even though it was the first victim of the pandemic, as the second global economy, and with its resilience capacity, can impact the rest of the world.

He argued that the Chinese reaction to COVID-19 has been based on the philosophy “of the Chinese State to put human life and security in the most sacred place, by adopting the corresponding public policies, whatever the cost in economic terms.”

He said they were the most drastic measures “and never seen in the 70 years of life of the ROC”, with hermetic closures of the borders, the discipline of its citizens and the investment of resources “without sparing that effort in terms of providing human and material resources to save lives ”.

The first semester closed in China with a contraction in its economy of -6.8% , “the first fall in more than 40 years.

“Faced with this bleak picture, the Chinese government was not discouraged; he was optimistic and confident in the post- covid recovery ”, the ambassador said.

In fact, in the second quarter the Chinese economy rebounded to 3.2% and at the end of the third quarter, it reflected a rate of 4.9%, “thus reversing Chinese growth from negative to positive. I think it is the first case among the main economies of the world ”, he explained.

He commented that the food sector always maintained a positive trend, with positive growth even in the first quarter, reflecting 3.5%.

” China’s food reserves look robust and this has significance for the social and economic stability of the world’s most populous nation,” said the ambassador.

He noted that the financial sector remains in a strong position, as well as the so-called emerging sectors, “with the new engines of electronic commerce and high-tech manufacturing .”

Also, “the optimistic business expectations, domestic and foreign, are improving with respect to China.”

In summary, he stressed that the Chinese economy maintains good prospects for continuous development and presents good viability for growth in consumption, under conditions of the new normal.

He announced that “the Chinese government has adopted measures designed to promote exchange and cooperation with the rest of the world, including Latin America and the Caribbean.”

In the case of Panama , he highlighted the opening to quality products such as pineapple, coffee, meat and coiba, “with a good perspective regarding poultry and pork.”

He reiterated that confidence in human resilience cannot be lost as a condition for overcoming the crisis.

Any Lam Chong, former permanent representative in the Office of Commercial Development of Panama in the People’s Republic of China and who participated directly in the process of establishing diplomatic relations between Panama and China, offered, in a personal capacity and based on materials that They are for public consultation, a general look at the current trade agreements between Panama and the People’s Republic of China.

He detailed the current memoranda that have allowed to sponsor trade, investment, exchange information regarding fairs, deepen agricultural cooperation, promote cooperation in Economic and Commercial Zones, as well as Panama as an Approved Tourist Destination.

In the same way, these memoranda have allowed the development of sanitary and phytosanitary measures and requirements for the export or import of products of animal and plant origin.

In relation to the Free Trade Agreement (FTA), the international analyst recalled that on January 16, 2018, the feasibility study began to explore the possibility of negotiating it.

It is on June 12, 2018 when the negotiation of a trade agreement is officially launched, resulting in five rounds of negotiations, the last one held from April 24 to 26, 2019 in Beijing.

He acknowledged that “the negotiating table has new players and has been hit by the pandemic and the priority is now not a trade agreement.”

In my personal opinion, he reflected, the government is focused on seeking mutual cooperation with China on health, agriculture, education and technology issues.

In this regard, it considers that there are business opportunities using other agreements, even if it is not the FTA, in addition to taking advantage of the approval of current health protocols.

He also stressed that Chinese technology platforms open up new business opportunities that must be explored.

The future of exports
Rosmer Jurado, former president of the Panamanian Association of Exporters (Apex), when offering an overview of Panamanian exports during 2019 (See: Panama Exports table , main products ), highlighted that last year bananas were the big winner by leading shipments.

Items such as coffee, with niche products and differentials, have also made it possible to consolidate the country brand.

He recalled that the official statistics do not include re-exports through free zones , even when these platforms are used to generate exports to other markets.

In 2019, a record figure of $ 1.2 billion in exports was achieved, mainly associated with the export of copper concentrate, destined for the Chinese market.

“The export of services has been our strength, but now we are seeing that there is a potential for the export of goods,” he said.

The former Apex president acknowledges that 2020 was forecast as a spectacular year for exports, but the pandemic reversed this scenario.

In the case of exports to China, fishmeal led ( See: Exports to PR China by item ).

However, Panama’s entry into mining, and specifically copper concentrate exports, triggered exports to the Asian nation ( See: Exports to the People’s Republic of China with copper ).

In fact, he stressed, the traditional participation of the United States, the Netherlands and the European Union were in second and third place at the time that Panama incorporates the sale of copper.

In perspective, Jurado points out that in trade with China, food will be in wide demand.

The protocols for beef, fish (cobia and skipjack), pineapple, banana and pork are already approved.

In process are aquatic products (the plants need to be certified) and birds (by signing the protocol).

Similarly, the former president of Apex reiterated an ever-current issue on the agenda of the Panamanian producer and industrial sector: position the country as a regional food hub and thus emulate successful experiences such as those of the logistics, air and banking hub.

This idea is connected with the Special Regime for the Establishment of Agropark Operators and Developers, which aspires to use local and regional inputs, add value and take advantage of the strength of the Panamanian logistics sector as an export platform to different markets.

José González, specialist in financial and investment issues , acknowledged that China’s results for the third quarter show resilience.

“China could grow almost 2% this year. It is the only country that grows in the world ”, he affirmed.

He warned that the global economy will decrease 4.4%

In the case of Latin America, he reasoned, the impact of the crisis shows that it is not just what he did or did not do; it is actually a reflection of preconditions and means bigger challenges ahead.

In the case of Panama, he said that in the relationship with China the issue of agribusiness is key for Panama, as well as its strategic location in the context of the new Silk Road.