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Li calls for manufacturing shift in Peru

By ZHAO YINAN in Lima, Peru (China Daily USA) Updated: 2015-05-24 08:07

Premier Li Keqiang asked Chinese-invested companies in Peru to open local plants and diversify raw materials processing to the production of value-added products, during a meeting with corporate leaders on Saturday.

These products, such as steel, will generate more profit for the companies, support local infrastructure construction and help China export its excessive industrial capacity, he said.

Li made the remarks at a seminar with Chinese corporate leaders in Peru, the second day of his visit to the country. He was scheduled to fly to Chile on Sunday to conclude his first Latin American visit.

Jin Wei, chairman of Shougang Group, a leading steel manufacturer in China, said 60 percent of the steel produced in the company's plant in Peru was being used by companies affiliated with the group, while the rest was sold to other domestic buyers in China in 2014.

"We are considering opening steel plants to make good use of the local resources," he said. "But it is a complicated issue, and many different aspects must be weighed."

Li said it would be a win-win both for Chinese companies and the local economy, but investors have to observe local laws and customs and pay close attention to labor rights.

"Peru's economic development will hardly be sustainable with the chief focus on raw materials processing, and China too has to bid farewell to the outdated development pattern characterized by high-energy consumption," he said.

He urged companies to seize the chance of the building of the transoceanic railroad and other infrastructure projects that are going to be proposed in the $30 billion industrial capacity fund.

Li announced during a visit to Brazil on Tuesday that Beijing is to set up a special fund of $30 billion for promoting China-Latin America cooperation in industrial production capacity and the export of Chinese equipment.

With more than 160 Chinese-invested companies, Peru is home to one of the largest ethnic Chinese populations in Latin America.

The two countries signed a free trade agreement in 2009, and bilateral trade reached $14.3 billion in 2014. China's investment in Peru stood at $14.2 billion by the end of 2014.

Carlos Herrera Perret, executive director of the Private Investment Promotion Agency of Peru, said transportation infrastructure, electricity supply, energy development, public health and telecommunications are the major sectors in need of investment.

"The infrastructure-construction deficit in Peru is about $80 billion, which cannot be raised without the participation of private and foreign investors," he said.

The premier and Peruvian President Ollanta Humala witnessed the signing of a memorandum after a bilateral meeting on Friday to expand China-Peru industrial production cooperation.

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