1. 1 Chile-China: Strategic Partners Francisco Silva March 2014

2. Mexico USD 1.178 B Colombia USD 370 B Chile USD 268 B Brazil USD 2.253 B Peru USD 197 B Chile Peru Colombia Mexico Brazil Macroeconomic imbalances Poor political stability Institutional uncertainty Non Investment grades Shallow financial markets Argentina Venezuela Paraguay Ecuador others Good macroeconomics Good Institutions Flexible exchange rates Investment grades Deep financial markets 2 LATAM has Two Different Stories with Two Different Models

3. Source: IMF. Per Capita GDP, PPP adjusted (1990 = 100). 3 Chile and the Andean countries have outperformed…

4. Source: IMF and Bloomberg. 4 …and they are NOT only a Commodity Story

5. Source: Heritage Foundation, World Economic Forum. # out of 180 countries. 5 Chile: Institutional Strength is KEY

6. Source: Betancour, C. De Gregorio, J. Jara A. “Improving the Banking System: The Chilean Experience”. BIS Papers. No. 28, 2006. Financial Strength Index based on Moody’s index of financial system strength, based on a numerical scale assigned to weighted average bank ratings by country. … and Financial Development

7. Source: IMF. 7 Chile’s Macro: Low Inflation and steady Growth

8. Source: IIF, CIA, IMF. 8 And (like China) Low Levels of Debt

9. Source: Bloomberg, 11/18/2013. CDS 5y (points) 9 Good Macroeconomic Policies are Rewarded with Low Interest Rates

10. Macro Management The Global Competitiveness and Ease of doing business index Source: World Bank, World Economic Forum. GCIEoDBI Switzerland129 Singapore21 Finland312 Germany421 United States54 Sweden614 Hong Kong SAR72 United Kingdom10 Denmark155 New Zealand183 France2338 China2996 Chile34 Spain3552 Italy4965 Mexico5553 Brazil56116 Peru6142 Colombia6943 Ecuador71135 Argentina104126 Venezuela134181 10 Good Environment for Doing Business

11. Source: Central Bank of Chile. China’s Participation In Chile’s Trade Of Goods has Increased Dramatically…

12. Source: World Trade Organization (2012). By main destination (% of total exports) 12 …and Now China is our Main Exports’ Destiny % of total exports to Asia 2013

13. Source: BCCh. Chilean Exports to China so far is Mainly Commodities % of total exports to China 2013

14. 1996 1993- 94 19981999 Economic Agreements Bolivia Colombia Ecuador Venezuela FTA Canada Association with Mercosur FTA Mexico Economic Agreement Peru FTA Central America 2002 Economic Association EU 2003 FTA USA EFTA South Korea 2005 FTA China Economic Association P-4 2006 Partial Scope Agreement India Current negotiations with India and Japan Study for an FTA with Thailand 2007 Western HemisphereAsia Source: Dirección General de Relaciones Económicas Internacionales de Chile, 2006. EFTA: European Free Trade Association: Iceland, Liechtenstein, Norway, Switzerland. Note: TheP-4 group are: Brunei Darussalam, Chile, New Zealand, Singapore. And we Keep Looking Towards Asia

15. INSTALLED CAPACITY (MW) AND AVERAGE SALES PRICESSIC GENERATION (BY TECHNOLOGY) 15 * Estimation for the average energy sales price from customers contracts Looking Towards Asia: Energy is a Key Sector for Cooperation

16. 16 Quality of port infrastructure, WEF (1=extremely underdeveloped to 7=well developed and efficient by international standards) Looking Towards Asia: Infrastructure has Room for Improvement

17. 17 Looking Towards Asia: Construction and Real State

18. Conclusion » So far the economic relationship between Chile and China has been highly beneficial for both countries. » The focus of this relationship has been mainly through commodity trade. » But they are many potential areas of further cooperation such as Energy, Infrastructure and Real State.

19. ECONOMIC INDICATORS: Summary Source: Estudios Security.