In 2010 Cofco spent $18m on a large swathe of Bisquertt, one of the valley_s most upmarket brands. It changed its name to an easier-on-the-tongue Santa Andrea, and after some trial and error put the wine into mass production. Its price plunged, but wine exports from Chile to China have soared. Many of them come in two-litre bottles, which suggests they are not aimed at the most discerning of Chinese palates.
Chile is about as far away from China as you can get on the globe, yet in recent years China has overtaken the United States as the Andean nation_s biggest trading partner, accounting for more than a fifth of its imports and exports. Most of those exports are of copper, but food and drink are also on the menu. Andr__s Rebolledo, the Chilean government_s head of international trade, says his country is now producing salmon for sale in Asia. Getting it there in perfect condition forms part of Chile_s efforts to develop the logistical skills needed to add value to its farm exports.
Demand for copper may wax and wane with the strength of China_s economy, but there are compelling reasons why east-west trans-Pacific food trade should grow, according to a joint study by the Inter-American Development Bank and the Asian Development Bank in 2012. Asia, particularly China, lacks agricultural land and water, whereas Latin America has plenty of both.
The study notes that between 1975 and 2009 China lost 20% of its farmland to urbanisation and desertification, yet as its population becomes richer it demands more high-protein, high-calorie food. Among Latin America_s ten biggest exports to Asia are poultry, sugar beet, soya oil, vegetable oils and soybeans. Some of that goes to feed a big favourite in the modern Chinese diet, pork.
Agricultural tariffs in Asia remain prohibitively high, and Latin America imports lots of electric-power plant and car parts from Asia, which explains why the region_s trade is alarmingly lopsided. But lessons from history should encourage China to nurture its agricultural relationship with Latin America.
A 1972 book by Alfred Crosby, _The Columbian Exchange_, explained how after the discovery of the Americas sweet potatoes, corn, peanuts, tobacco and chili peppers travelled across the Pacific to China for the first time. Then as now, China had a large population and not enough fertile land. The American crops thrived in poor soil, and so did those who ate them. Now the region that put the spice into Szechuan food is providing the wine to wash it down.
The Economist |