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Chinese yuan on the map of South America. Trading between China and Latin American countries, economy and investment

Is Chile Becoming over-reliant on China: 5 Geopolitical Effects You Need to Know

1. Chinese digital influence in Chile

China has had a growing digital role in Chile and has used it as a tool to expand its digital reach. Technological advances have brought the two countries closer together. China’s ride-hailing company DiDi Chuxing, which launched its operation in Chile in June, have had a big impact in Chile, while Chinese made electric buses have dominated the public transport sphere. Online commerce website Ali express has become popular in Chile, while the increased popularity of products and services of Chinese origin reflect China’s growing presence in the South American country, and its “natural and quotidian” nature.

2. Chile’s copper exports to China

Chile is the world’s largest producer of copper, and a big proportion of its exports go to China. However, in its second quarterly report the Chilean Copper Commission (COCHILCO) reduced its 2020 projection from US$3.08 to US$2.90 a pound, it said in a statement. The drop is because China “is experiencing a cycle of economic slowdown that has undermined expectations for short-term demand,” said the statement. That was exacerbated by “macroeconomic and global geopolitical tensions that have reduced the projections of worldwide growth,” largely due to a trade war between China and the United States, COCHILCO said. This has had a big impact on Chile’s economy and shows that its over-reliance of exports to China could hurt them.

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