EFESantiago

The Chilean economy is in good shape to weather the effects of volatility in Asian financial markets, Economy Minister Luis Felipe Cespedes said Tuesday.

"Chile ... has a sound economy and ... we are not getting into debt to fund domestic spending," he told ADN radio from China's business capital, Shanghai.

Cespedes also agreed with earlier comments by Finance Minister Rodrigo Valdes, who said that Chile has "strong international liquidity."

While calling for calm, Cespedes acknowledged the potential for a negative impact on Chile's economy.

"We have an open economy and, therefore, what happens in the world and what happens in a country as important for us as China is, has an effect on our economy," he said.

China's financial market woes - a reflection of the country's slowing economy - have already had an impact on the price of copper, Chile's main export, which fell 3.13 percent on Monday.

The downturn in China spread on Monday to markets across Asia, Europe and the Americas, though the leading European exchanges rebounded on Tuesday.

Cespedes said the answer to volatility is to transform Chile from "an economy so dependent on copper to a more diversified economy, and we are working on it."

The economy minister traveled to Shanghai for Chile Week.

"The economies of Chile and China are complementary, and because of that we can further boost exchanges in areas such as agriculture, technology associated with mining, logistics," he said.

On Tuesday, Chile's government announced the signing of a cooperation agreement with China's Alibaba, the global leader in electronic commerce, with the aim of supporting Chilean firms trying to market their wares in China.