Learning from China’s Experience for Greater Development

By MICHAEL ZáRATE

HIS second term as an ambas- sador comes at a special time. The trade frictions between the United States and China（both Chiles biggest trading partners） have made Sebastián Pi？eras government take its relationship with Beijing even more seriously. Ambassador Luis Schmidt is continuing the task of supporting Chinese investments in Chile， as was evident in September during the fifth iteration of Chile Week， yet another effort to bring the best of the country that gave the world Neruda to the Chinese people.

China Today （CT）： This year， the Peoples Republic of China is turning 70. You have kept a close relationship with this country， what are the feelings that arise amid the celebration of these seven decades？

Luis Schmidt Montes （LSM）： First of all， a great admiration towards the Chinese people and the government. This is something unparalleled in the world. There isnt a single country that has been able to undertake as many changes as China has in such a short period of time. In 1949， a large percentage of the Chinese population had a life expectancy of only 35 years. Nowadays， its 77 years. Apart from that， during those years， the illiteracy rate was high， practically 80 percent of the population didnt know how to read or write. Nowadays， nearly everyone is literate.

Poverty is another issue. Seventy years ago， approximately 95 percent of the country lived in extreme poverty. Nowadays， it has been almost entirely eradicated. Its true that there are still some pockets of poverty， but the rate is very low. The progress undertaken within China has therefore been very significant. This is why I show my appreciation towards the Chinese people and the Chinese government， and I hope that this [progress] will carry on for many years to come，because， as I have always said， if things work well in China， we can learn from its experience for greater development in Chile.

CT： Your first term as ambassador was from 2010 to 2014. If theres something that these 70 years have taught us， its the fact that China is a country that is constantly transforming. What change has struck you most in your return as ambassador？

LSM： After my first term as ambassador， I didnt leave China. I worked in the fruit business， where in my country I produced cherries and wine， as a result， I visited China three or four times per year. But what is truly surprising is how fast changes take place.

I left my post as ambassador when President Xi Jinping had just started his mandate， who， at the time， was already speaking of great transformations in science and technology， as well as human capital. WeChat was just starting to emerge， and nowadays， if we dont have[the app] we cant pay nor communicate. All of those have been breakthroughs in science and technology. At present， Chile is one of the most developed countries in Latin America， but we still are in need of all the things that China is doing in science and technology.

I also see other things. I remember that in the years 2010 and 2011， [air] pollution was a very serious matter in Beijing. Nowadays it has improved greatly. China is the largest producer of solar panels， the biggest producer of wind turbines， which all compete on an equal footing as alternate sources of energy. I am struck to see that there are cities in China where there is no public transport that isnt electric. These things leave me in awe.

CT： In the beginning of August， President Sebastián Pi？era urged China and the United States to put an end to their trade friction， the effects of which are also being felt in the Chilean economy. What is your opinion regarding these trade disagreements？

LSM： First of all， its a setback for the world. In these trade disagreements nobody wins. And not only are the American and Chinese economies affected， but also the rest of the world. Chile is an open country that will continue to support free trade and multilateralism， and in that sense we will always have Chinas back.

In Chiles case – and thats the reason behind Presi- dent Pi？eras statement – the country is caught in the crossfire： our first and second trade partners are China and the United States respectively， but the former almost doubles the latter. We are closer to the United States [geographically]， but that very distance has pushed us to put into effect a number of trade agreements and policies with China which have rendered it a lot more important for us.

Under this predicament， if Chinas [economy] starts to slow down， less copper， lithium， fruits， and other products will be bought， and this will evidently cause us problems. I want to emphasize once again that in these trade wars nobody wins. We hope that in the upcoming talks， China and the United States will be able to find some common ground so that this conflict may come to an end， or at least thaw.

CT： Chile will host the leaders summit of APEC this November. Chinese President Xi Jinping was one of the first leaders who confirmed his attendance. What do you hope to see through Chinas engagement？

LSM： It is extremely important. Nowadays， China and the United States leadership is very strong for the economies that are part of APEC. As you have said， President Xi Jinping was one of the first leaders to confirm his visit. Not only did he confirm his attendance at the APEC summit， but also confirmed his official state visit to Chile， which is very relevant for us because it will allow us to sign a considerable amount of agreements to continue growing our commercial and cultural relationship with China.

APEC is a means through which the most important economies in the world can sit together to discuss and find solutions to the worlds problems， and in [that sense]， we believe that Chinas leadership is crucial. This is why we value tremendously that President Xi Jinping was the first to confirm his attendance， and we are also honored that he will come to Chile on an official state visit a day prior to the APEC forum.

CT： The fifth Chile Week took place in Beijing and Shanghai in August and September. What do you think has been its contribution in comparison to previous years editions？

LSM： These things always move from less to more.I remember that in my first term as ambassador， I talked a lot about doing Chile Week， but no one believed in it. It was done during the term of the ambassador who followed me， and we can now say that its a week in which Chile can showcase some of its advantages and opportunities to the great nation of China.

I have taken part in all of Chile Weeks editions， both as ambassador and as a businessman. This year our focus has been on electro mobility and e-commerce. In Chile we are still learning， but platforms such as Alibabas Taobao and Tmall， and JD.com， are already thinking of opening branches in our country. Nowadays， by means of the Internet， we can access products in the most hidden-away places in China， which is something that we could not even have conceived of in the past.

We are very happy because in these five editions of Chile Week we have already visited more than 12 cities in China， opening our eyes to the places that present the best opportunities. We will probably open a consulate in Chengdu， which would be the first in Chinas interior. This will not only allow us to work on visa processing， but also on opening business and trade in Chinas hinterland.

CT： Five years ago， when Chile Week was first put forward， Chilean authorities were voicing the need to increase Chinese investments in Chile. At present， the situation seems to have changed， thanks to， for example， Didi Chuxing and Huawei， which have made their way into the Chilean market. How do you view the development of Chinese investment in Chile？

LSM： The first time I arrived as ambassador， President Pi？era would often ask me about Chinese investment in Chile， which was practically nonexistent. He， of course， gave me instructions so that we could work on that front. At one point in time， I realized that one of the problems was that in the Free Trade Agreement with China， which was such a success in our commercial relations， nothing related to investments had been agreed upon. At the end of my term in 2013， an agree- ment on investment and avoiding double taxation was signed. With time， things have evolved， and I would say that in 2017 we started to feel a change， with the arrival of Chinese companies investing in the energy， winemaking， and even the fruit production sectors.

Presently， all of this has taken a new momentum. Last year， it materialized through the purchase of 20 percent of Soquimichs （Sociedad Química y Minera de Chile） stocks by the company Tianqi. Furthermore， as you said， Chileans now use Huawei mobile phones to communicate with their families or with the rest of the world. Later in the day， during the evening， many of them go back to their homes on a Mobike bicycle or a Didi taxi， or they take one of Yutongs or BYDs electric buses that make their rounds in our capital.

Last year， Chinese investment in Chile exceeded US$3.5 billion， and so far this year， we are close to US $7 billion. If Chile wishes to become a developed nation in the course of the next five years as President Pi？era promised， foreign investment is crucial， and we therefore hope that Chinese investments will continue to rise as well.