APEC: Peru, Chile to Benefit from US-China Market Rivalry

# Leveraging the US-China Competition: A Strategic Opportunity for Peru and Chile in APEC

## APEC Forum: A Confluence of Economic Titans

The Asia-Pacific Economic Cooperation (APEC) forum represents a critical gathering that convenes economic leaders and nations of the Asia-Pacific region, heralding significant implications for global trade dynamics. This year, the forum’s 30th edition is celebrated in San Francisco, California, from November 11 to November 17. Among its attendees are the President of Peru, Dina Boluarte, and the President of Chile, Gabriel Boric. APEC, a pivotal economic forum established in 1989, aims to bolster sustainable economic growth and includes the economies of 21 countries and territories, including heavyweights such as China, Russia, the United States, Mexico, Chile, and Japan.

Lima and Santiago, the sole South American APEC members, meet their major trade partners amidst an intense commercial and geopolitical tug-of-war between the United States and China—the world’s leading economic powers.

## US-China Rivalry: An Opportunity for Latin America

Renowned Peruvian economist Carlos Aquino, an expert on Asia, spoke with Sputnik, highlighting the undeniable influence of Beijing and Washington on global trade and investments. Aquino pointed out that the economic, political, and even military tensions between the two countries offer Latin American nations a chance to gain from these rivalries. He suggested a strategic approach to optimize the growing interest from both powers.

China, for instance, has enhanced its presence in the region through the Belt and Road Initiative—a platform for economic integration introduced by Beijing in 2013 that currently allies with over 100 global partners, including Latin American countries like Chile and Peru, which officially joined in 2018 and 2019, respectively.

On the other hand, the United States hosted the inaugural summit of the Americas Partnership for Economic Prosperity (APEP), envisioning enhanced cooperation with the western hemisphere and countering China’s expansion, according to several experts.

## Peru and Chile at the Crossroads of Great Power Investments

The geopolitical and trade-related circumstances present possibilities for nations like Peru and Chile, who could draw investments from both China and the United States. Economist and Asian specialist John Valdiglesias believes the scenario spells an opportunity for these countries, particularly in attracting Chinese investments in infrastructure development, green energy sectors like wind and solar—areas where China’s investment in Peru and Chile has been comparatively minimal. Additionally, with China’s backing, Peru could capitalize on its lithium reserves and become specialized in the value chain of the coveted “white gold.”

## Forging Ahead: APEC’s Role in Regional Development

Chile, with its participation in APEC, aspires to champion the forum’s objectives for sustainable and inclusive growth, regional integration, trade facilitation, investments, innovation, and the digital economy. It also strives to procure new APEC funds and continue implementing the projects for which it has already secured 860,000 dollars in 2023.

In contrast, Peru endures more challenges, having attracted less foreign investment than Chile. With Peru currently facing an economic downturn, with a 0.63% contraction between January and September and a 1.29% decrease in national production—governments and business leaders remain central to turning potential opportunities into tangible outcomes.

Peru, on the verge of assuming the presidency of APEC during the high-profile event, is set to host the forum for the third time in 2024. The Andean nation seeks to leverage this role to promote open, fair, and free trade among member economies. However, a missed meeting with President Joe Biden earlier in November has led to upheavals within the Peruvian government, signaling potential uncertainties.

## Conclusion: APEC and the Latin American Momentum

APEC members, constituting 38% of the global population, 61% of the world’s GDP, and 47% of international trade, hold a substantial sway over the world economy. The engagement of Chile and Peru with other global leaders at APEC presents the opportunity to meet with prominent world entrepreneurs and policymakers. This visibility could enable them to navigate the currents of US-China competition effectively.

Also in attendance at the San Francisco APEC event are representatives from Mexico, led by President Andrés Manuel López Obrador, and Colombian President Gustavo Petro. As the world witnesses these unfolding economic dynamics, the actions taken by the Latin American delegates will be critical in harnessing the full potential of the US-China competition for their national benefits.

This analytical evaluation of Peru and Chile’s positioning at the APEC forum highlights the urgency for strategic action in exploiting global economic tensions to each country’s advantage. As they navigate their role within APEC, the decisions made now could very well shape their economic landscape for years to come.

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