Peru has developed strong economic ties with Asia in recent decades. Trade relations have expanded greatly, with China now Peru's largest trade partner and export market. Investment from Asia, especially from China, has also increased significantly. Peru receives economic cooperation from countries like Japan and South Korea. However, the relationship remains asymmetric, with Peru mainly exporting raw materials. Strengthening value-added exports and further engagement will be important to deepening economic integration between Peru and Asia.

1. Peruvian economy and Relations
with Asia
Hankuk University of Foreign Studies
Seul, Republic of Korea
Carlos Aquino, Professor
San Marcos National University, Lima, Peru
March 14, 2014
E-mail: carloskobe2005@yahoo.com
Web site: http://carloskobe2005.wix.com/asianeconomy
Facebook, Blog, Linkendin

2. Index
• I. Overview of Peruvian economy
• II. Trade relations with Asian Countries
• III. Investment from Asian countries
• IV. Economic Cooperation
• V. Conclusions

3. I. Overview of Peruvian economy
Source:
http://www.proinversion.gob.pe/RepositorioAPS/1/0/JER/PRESENTACION_PAIS/PPT_Por%20que%20invertir%2
0en%20Peru%20en%20ingles%202014_pptx.pdf

4. I. Overview of Peruvian economy

5. I. Overview of Peruvian economy
• Peru has the fastest growing economy in Latin
America
• It has a sound macroeconomic environment, low
inflation rate (2-3% per year), low public external
debt (less than 20% of GDP), and high Foreign
Exchange Reserves (65 billion dollars or 33% of
GDP)
• It is a big turnaround from the 1980s, when
hyperinflation, recession, and political instability
were the norm.

6. • In 1990 began a series of economic reforms that
opened the economy to the world markets,
reduced participation of the state in the economy
and attracted a lot of foreign investment.
• Barriers to trade were reduced, and Peru began a
series of negotiations to have Free Trade
Agreements with many countries.
• Political and social stability was achieved when
the terrorist groups were eliminated.

10. • Peru engines of economic growth are external
and internal markets, and private investment
• Exports are diversified, both in products and
markets
• Import of cars have increased around 10
times, from 2000 to 2013
• There is a boom in the construction fo
shopping malls, in real state.
• There is a friendly investment environment

18. • Peru is a middle income country, with a GDP per capita
of 7,000 dollars (2013) and a population of 30 million
people.
• It has achieved sustained growth of its economy in the
last decade
• Increasing participation in the global economy
• Strategic location in South Pacific
• Vast natural resources and variety of climates
• High potential growth sectors
• As a member of the Pacific Alliance, with Chile,
Colombia and Mexico, Peru attracts foreign interest

19. • But still many challenges lie ahead
• There is a need for improvement of physical
infrastructure
• Also the improvement of educational standards is an
urgent task
• Government spending capacity should be improved
• And we need to give more value added to our natural
resources
• For that we need also foreign investment and new
foreign markets

20. II. Trade relations with Asia
• For Asia refers to the region of East Asia, the
Asian countries around the Pacific Rim.
• Peru has a long relationship with some of them,
especially China and Japan.
• Peru was the first country in Latin America to
receive large-scale immigration from China and
Japan, from 1849 and from 1899
• Peru was the first Latin American country to
establish diplomatic relations with Japan in 1873
and China in 1874

21. • From the 1960s Peru established diplomatic
relationship with other Asian countries, for
example with the Republic of Korea in 1963.
• But from the 1990s a concerted effort began to
increase our relationship and trade with Asian
countries.
• Embassies of Peru were opened in several Asian
countries and Peru became a member of the
APEC forum in 1998.
• A series of FTA with several of them were signed,
first with China, then, Korea, Japan, etc.

22. • Peru now is negotiating with other 11
countries the Trans Pacific Partnership
Agreement, TPP
• Peru is also a member of the PECC, the PBEC
and the FEALAC.
• The Forum for East Asia and Latin American
Cooperation, FEALAC, has 20 members from
Latin America and 16 from East Asia.

26. II. Trade relations with Asian Countries
• Peru has benefited from strong external demand for its raw
materials (and of the high price paid for them) .
• China became the biggest export market in 2011 and the biggest
trade partner in 2012.
• But most of exports to Asia are raw materials.
• China is the biggest buyer of Peru copper, iron ore, fishmeal, lead,
etc.
• Its influence in the Peruvian economy is very big, to the point that
Luis Miguel Castilla, Peru's finance minister said in october 2011
"the truth is I lightt a little candle every day and pray China’s
growth doesn't fall“.
• Thanks to the FTAs with Asian countries increasing exports of
agroindustrial products and fishery products are expected.
• Trade with East Asia represents a third of Peru total trade

27. PERU'S EXPORTS TO ASIAN MEMBERS OF APEC (IN MILLION OF
DOLLARS) (FOB VALUE) *Year1994
Source: Aduanas del Perú: http://www.aduanet.gob.pe/aduanas/informae/2012/generales/ExpoImpoPorContiZonaPais.html
PROMPERUSTAT http://www.siicex.gob.pe/promperustat/frmRanking_x_Pais.aspx (For data before the year 2000)
Country/Economy 1993 1997 2003 2006 2010 2011 2012
World Total 3,344.40 6,741.75 8,939.82 23,431.43 35,073.25 46,386.03 45,846.18
Australia 14.99 16.31 53.12 38.25 117.5 115.35 99.50
South Korea 59.36 91.50 176.34 545.27 894.9 1,696.09 1,545.35
China 140.84 490.06 676.96 2,267.27 5,425.9 6,972.64 7,848.97
Philippines 31.99* 47.96 11.06 44.89 123.41 109.75 55.23
Hong-Kong 28.60 68.82 30.31 42.14 78.5 93.24 96.54
Indonesia 32.62* 36.33 22.67 30.08 36.61 61.49 101.18
Japan 299.04 473.57 391.16 1,229.76 1,790.4 2,174.76 2,575.33
Malaysia 57.33* 59.77 5.51 7.17 8.43 6.75 27.68
New Zeeland 1.50 - 3.72 7.59 13.5 18.63. 25.82
Russia 9.90 9.48 14.18 25.61 57.9 78.80 88.43
Singapore 1.68* 11.96* 16.15 4.59 6.66 7.94 21.46
Thailand 11.71* 36.23 26.71 65.43 98.10 264.76 234.06
Taiwan (Chinese
Taipei)
118.78 159.11 147.28 415.03 293.0 365.28 261.10
Vietnam 1.62* 2.56 10.64 35.51 63.89 77.72 90.43

28. TOP 10 PRODUCTS EXPORTED TO KOREA, 2012
9 main products: 96% of total
Source: ADUANAS DEL PERU:
file:///C:/Documents%20and%20Settings/pc%201/Escritorio/subPartidasPorPaisDestino.html
PRODUCT MILLION OF DOLLARS
FOB
Total 1,545
Lead ore and concentrates 485
Copper ores and concentrates 470
Zinc ore 213
Silver ore 156
Copper cathodes 42
Copper "Blister" 41
Coffee 30
Cuttlefish and squid 27
Pota 27
Fresh grapes 8

29. • Imports from Asia have increased a lot, specially
from China
• China is the cheapest source of many
manufactured goods.
• Products before sourced from Japan are being
procured now from China and Korea
• Cheap Chinese goods has generated some
complaints by local producers and antidumping
duties have been imposed to some Chinese
goods

30. IMPORTS OF PERU FROM MAJOR ASIAN COUNTRIES MEMBERS
OF APEC (IN MILLION OF DOLLARS, CIF)
Source: Aduanas del Peru
Country 1993 1997 2003 2006 2010 2011 2012
World Total 4,024.55 7,716.79 8,428.51 20,464.21 27,910.7
0
37,891.00 42,150.68
Australia 17.35 33.09 28.12 67.52 75.07 111.1 133.0
South Korea 99.42 230.25 277.72 522.34 1,044.25 1,497.2 1,647.6
China 90.43 195.92 646.54 2,474.22 5,115.3 6,364.7 7,802.9
Philippines 11.06 9.79 12.04 22.9 27.4
Hong Kong 12.29 17.04 15.19 16.59 22.80 15.8 20.5
Indonesia 40.00 59.42 120.96 221.1 245.1
Japan 303.62 417.99 367.40 790.39 1,336.96 1,314.4 1,499.9
Malaysia 57.77 118.73 160.44 207.0 206.9
New
Zeeland
45.95 - 16.20 22.40 56.47 68.1 119.0
Russia 15.28 21.92 56.36 136.35 183.42 513.0 334.2
Singapore 22.23 27.50 38.45 50.83 60.00
Thailand 32.10 86.55 372.28 443.7 452.1
Taiwan 60.16 112.05 133.58 258.40 327.80 442.1 461.7
Vietnam 4.69 19.73 52.50 102.4 113.1

31. TOP 10 PRODUCTS IMPORTED FROM KOREA,
2012
Source: ADUANAS DEL PERU:
http://www.aduanet.gob.pe/aduanas/informae/2012/importacion/principalesSubpartidasPaisOrigen.html
PRODUCTS MILLION OF DOLLARS
CIF VALUE
Total 1,647
Vehicles greater than 1500 ccc 362
Tv devices 140
Vehicles of less than 1500 ccc 116
Transport vehicles 41
Vehicles of 1000 ccc 39
Sections of iron or steel 36
Machinery 36
Cargo Vehicles 33
Cement 31
Other Vehicles 30

32. • As has been seen FDI to Peru increased a lot from
1990
• Up to June 2013 the Mining sector accounted for
24.3% of total FDI, Finance was second with
18.8%, then Communication with 17.6%, Industry
with 13.9% and Energy with 11.7%
• China is becoming an active actor in the mining
sector and will account for nearly a quarter of
planned investment in this sector in the coming
years

33. MAJOR INVESTORS IN PERU, 2012, CONTRIBUTION TO THE CAPITAL STOCK BY
COUNTRY OF ORIGIN, (MILLION US$)
Source: Proinversión
*Stock updated until December 2012.
1 / Includes British Dependencies and British Overseas Territories.
2 / Includes Overseas Territories http://www.proinversion.gob.pe/0/0/modulos/JER/PlantillaStandardsinHijos.aspx?ARE=0&PFL=0&JER=1537
COUNTRY 2012 %
ACCUMULATED
PERCENTAGE
Spain 4,818.57 21.25% 21.25%
USA 3,012.47 13.29% 34.54%
South Africa 1,740.17 7.67% 42.21%
Chile 1,643.90 7.25% 49.46%
Brazil 1,334.91 5.89% 55.35%
UK 1/ 1,314.93 5.80% 61.15%
Canada 1,276.23 5.63% 66.78%
Switzerland 934.65 4.12% 70.90%
Mexico 897.90 3.96% 74.86%
China 796.48 3.51% 78.37%
Italy 733.51 3.23% 81.61%
Colombia 569.32 2.51% 84.12%
Holland 2/ 486.39 2.15% 86.26%
Japan 436.79 1.93% 88.19%
Norway 402.82 1.78% 89.97%
Others 2,275.31 10.03% 100.00%
TOTAL 22,674.35 100.00%

34. ESTIMATED PORTFOLIO OF MINING PROJECTS BY MAIN
INVESTOR, January 2014
Source: Ministerio de Energía y Minas: “Cartera estimada de proyectos mineros, Enero 2014”, page 3

35. IV. Economic Cooperation
• Peru receive some ODA from Japan and Korea,
and is the largest recipient in Latin America of aid
from those countries
• For ODA from Korea Peru in the year 2012 was
the first country in Latin America with 8.87
million dollars, and was in the 14th place in the
world
• There is a growing interest for Asia in Peru,
specially for Korean and Chinese culture and
language (there is a King Sejong Institute and
several Confucius Institutes in Peru)

36. JAPANESE ECONOMIC COOPERATION IN LATIN AMERICA,
2009
Source: http://www.pe.emb-japan.g o.jp/esp/cooperacion_economica.htm

37. Korea ODA to Latin America
Source: Korea Eximbank, ODA Statistics Online DB
Source: http://www.odakorea.go.kr/eng.result.RegionCountry_
Continent Country 2006 2007 2008 2009 2010
Latin America
and
the Carebbean
Bolivia 4.5 8.66 5.23 1.84 1.66
Colombia 0.25 0.18 1.42 1.38 6.97
Dominica Republic 1.65 1.48 14.25 6.91 2.74
Ecuador 0.21 3.35 3.62 2.75 3.83
El Salvador 0.33 1.13 1.96 3.95 4.31
Guatemala 2.28 2.77 4.03 3.95 5.45
Haiti 0.03 0.15 0.72 0.43 5.54
Honduras 1.05 3.11 9.85 4.47 6.45
Jamaica 0.15 0.1 1.34 1.24 0.11
Nicaragua 5.61 9.08 9.07 14.84 5.6
Panama 0.43 1.93 -0.12 -0.34 -0.41
Paraguay 1.92 5.95 4.78 4.85 11.63
Peru 4.49 10.22 8.73 6.99 6.4
*

38. V. Conclusions
• There is a growing economic relationship
between Peru and Asia
• One third of Peru trade is with Asia but this is an
asymmetric relationship
• Investment from Asia is increasing.
• Peru need develop value added goods for the
Asian market
• There is a need to know better Asian markets.
• The economic relationship will continue
increasing and with that also cultural links