Small but Salient

By Li Xiaoyang

Tomas Fuentes Benitez， a Shanghai-based Argentine entrepreneur in his 30s， has not stopped working despite the recent COVID-19 resurgence in the city. For Benitez， the pandemic brings both opportunities and challenges.

With an interest in China， Benitez completed a master’s degree program at Tsinghua University in 2016. Great market demand and increasingly health conscious Chinese consumers inspired him. In 2019， he cooperated with a food plant in Shanghai to establish his own healthy snack brand Stokes， with the products ranging from beef slices to potato chips. To date， his products have been sold in more than 750 supermarkets across China. Due to the recent restrictions to curb the spread of the virus， Benitez has been working from home， while continuing to promote online group buying of Stokes products.

Shanghai is a major business hub in China and a magnet for foreign-invested enterprises. Like Stokes， an increasing number of businesses from Latin American and Caribbean （LAC） nations， mostly micro， small and medium-sized enterprises （MSMEs）， have settled in the city in recent years.

Marred by the Omicron outbreak for nearly two months， Shanghai has phased in the reopening of commercial businesses since May 16. The city will fully restore production and normal order in the first half of June while continuing to observe containment measures， according to the local government.

In April， the authorities announced two batches of key enterprises that can resume business under a broad lockdown.

The resumption of production has improved expectations for LAC MSMEs in Shanghai， but difficulties remain for firms that mostly engage in foreign trade.

Warmpaca is a brand established by Chinese and Peruvian co-founders. It mainly sells alpaca wool products made by Peruvian craftspeople through franchised outlets and online stores. The company’s office is located in Shanghai， meaning it， too， experienced the negative effects of the lockdown.

“We have suspended business for around two months starting from March. The products from Peru have not yet been transported from the port to our warehouses due to logistical restrictions. Our staff have to work from home and cannot deliver ordered products，” Ma Yuxia， one of the cofounders of the brand， told Beijing Review.

Though some stores in Shanghai where the Warmpaca products are sold have reopened， the company will still need a long period to recover from the impact， according to Ma. She said the company has devised a sales diversification strategy and is exploring other markets such as the Republic of Korea and Australia.

There are also companies seeking new ways of overcoming virus-induced impacts. Royma Trading Co. Ltd.， incorporated in 2016， has an office in Shanghai to promote Argentine products， including wines from high-altitude vineyards. It has established a league of seven wine producers from Salta， Argentina， the world’s highestaltitude wine producing area.

Cao Qixiang， a co-founder of the company， told Beijing Review that the latest flare-ups led to deliveries from one of its warehouses in Shanghai being suspended， beginning in March. Another local warehouse has gradually resumed goods delivery， but only to clients in the city. Exhibitions and promotional events in Shanghai in the first half of this year have all been canceled， so the company has turned to live commerce to promote its sales.

Argentine products are less known in China， but as the two countries increase cooperation， and after Argentina joined the Belt and Road Initiative， the situation is improving， according to Cao. Though they occupy smaller proportions of the Chinese market compared with those of other countries， there is great potential for growth as there are many high-quality products in Argentina， Cao said.

“We still have confidence in the Chinese market. Royma will expand from large to smaller cities in the coming years，” he added.

China and LAC countries have developed close trade ties. As China opens up its market， LAC products have found opportunities in the upgrading and expanding demands of Chinese consumers. The China International Import Expo held annually since 2018 in Shanghai has also introduced many LAC businesses to the Chinese market， providing access for local consumers to their distinctive products and driving up bilateral trade.

In 2021， China was the second largest trading partner of the LAC region， with bilateral trade topping $450 billion. Their import and export volume had exceeded $300 billion for the third consecutive year， according to the General Administration of Customs of China.

Last year， Uruguay exported beef worth $1.44 billion to China， almost doubling that in 2020， according to the Embassy of Uruguay in China.

Data from the Chinese Ministry of Commerce showed that China-Argentina trade reached$17.83 billion in 2021， up 28.3 percent year on year. China remained Argentina’s second largest trading partner. Over the past five years， it has signed 13 contracts for importing the latter’s agricultural products.

China-LAC cooperation is expanding into new fields. Over recent years， China has invested in infrastructure projects such as photovoltaic bases and hydropower stations in Mexico and Brazil. The country has also cooperated with Argentina in developing nuclear power， and launching Antarctic expedition activities by giving play to the latter’s proximity to the South Pole.

Chinese entrepreneurs have also been exploring opportunities in the fast-growing LAC markets. Zou Wenbao went to Venezuela in 2003. In 2013， he started his own e-commerce business there， mainly importing products from China to Venezuela. As more people turn to online consumption amid the pandemic， Zou has seen growing opportunities. He has expanded his business into Chinese food delivery in order to promote Chinese cuisines.

Ronnie Lins， Director of the China-Brazil Center for Research and Business， said in an interview with Xinhua News Agency that trade between China and LAC countries has continued to expand， and they share common goals such as safeguarding the multilateral trading system and promoting sustainable development. The significant complementarity between the two sides will further improve their ties. BR