Ties with China
  ·  2022-08-31  ·   Source: NO.35 SEPTEMBER 1, 2022
The factory of FABICO S.A. in Lima, Peru, on August 25 (COURTESY PHOTO)

Since the establishment of diplomatic relations around five decades ago, China and Peru have developed close trade ties. According to the Peruvian Ministry of Foreign Trade and Tourism, China-Peru trade totaled over $11.3 billion in January-April this year, up 6.4 percent year on year. China is Peru's largest trading partner.

FABICO S.A. is a Peru-based company with around 150 staff. It operates in the South American market as an importer, manufacturer and distributor of products for children. In an interview with Beijing Review, Jose Esteves, the owner and CEO of the company, shares details of the strong ties between the company and China. Edited excerpts follow:

Our cooperation with Chinese enterprises started in 1988, when China's reality was completely different from what we see today. One anecdote that I always tell my children is that of my trip from Wenzhou to Taizhou in Zhejiang Province. The distance between those two cities by road is 132 km and the trip currently takes approximately two hours. Back in 1988, I did that simple trip in 12 hours, with tedious road conditions, in the stiffest car I've ever sat in. I witnessed with my own eyes the railway boom of the 1990s and the megaprojects of the 2000s. The introduction of the bullet trains and the construction of airports in major and minor cities have changed the game.

I was astonished by China's evolution. Every year that China welcomed me back, China was different. Towns became cities, unpaved roads became highways, and people's lives became much more comfortable and efficient. I truly admire what China has accomplished in such a short time. That is why I started to do business with its enterprises with such determination.

We quickly made friendships with Chinese immigrants who happened to have successful import businesses. China, being a developing country, has accessible prices and an easy business and communication approach. Over recent years, Chinese products have reached high standards of quality, and Chinese manufacturers are known for their honest, respectful and serious style when doing business.

There has been significant progress in trade ties between China and Peru. The bilateral free trade agreement [signed in April 2009 and becoming effective in January 2010] liberates the flow of goods and services to each other's market.

The COVID-19 pandemic had grinding effects on international commerce, especially those doing business with China, which is widely known as the world's factory. The pandemic hit the Peruvian economy very hard, making our currency very volatile. Freight rates have surged.

It is very difficult to fly to China at the moment due to the high transportation costs and the COVID-19 control protocols. Also, the time it would take to visit Chinese factories with all the current protocols would be too long. This all directly affects the products we receive from the manufacturers. Some manufacturers are lacking professionalism and delivering inferior goods. If they carry on this way, it can and will prejudice business with important foreign partners.

We established our own factory in Lima in 2016, where we make just a small selection of plastic products. The locally made products are delivered not only to all cities in Peru, but also our customers in Bolivia, Ecuador and Panama.

Nevertheless, it is not enough to satisfy the needs of my business, so I hope everything becomes better and I'm able to visit China to bring cooperation with Chinese manufacturers back to normal.

Copyedited by G.P. Wilson

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