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The Visible Hand of China in Latin America

image of The Visible Hand of China in Latin America

Latin America is looking towards China and Asia -- and China and Asia are looking right back. This is a major shift: for the first time in its history, Latin America can benefit from not one but three major engines of world growth. Until the 1980s, the United States was the region’s major trade partner. In the 1990s, a second growth engine emerged with the European investment boom in Latin America. Now, at the dawn of the new century, the increasing global economic importance of Asia, and in particular China, potentially provides a third engine of growth.

This book describes the opportunities and challenges that Latin American economies will face as Chinese importance in the world economy -- and in Latin America's traditional markets -- continues to grow.

English Spanish, Chinese

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Angel or Devil? China's Trade Impact on Latin American Emerging Markets

OECD Development Centre

China’s economy has expanded by leaps and bounds, with dazzling progress since it first opened to foreign investment and reform in 1978. Over the last 25 years and after a long period of economic autarky the country has emerged as a major player in world trade. Its accession to the World Trade Organisation (WTO) in 2001 was a milestone. China presents both a threat and an opportunity for Latin American emerging markets. On average and despite some exceptions, Latin America is a clear trade winner from Chinese global integration. This chapter studies China’s exporting and importing structure, using a database of 620 different goods. It builds two indices of trade competition to compare Chinese impacts over 1998-2004 on 34 economies, of which 15 are Latin American. The results generally confirm that there is no relevant trade competition between China and Latin America products in the US market. Not surprisingly, countries that export mainly commodities face lower competition, because China is a net importer of raw materials and an exporter of manufacturing products. At the same time, China is a wake-up call. The country has emerged as a major exporter at both the labour-intensive, low technology and, increasingly, at the knowledge-intensive, higher technology end of the product spectrum. It is presenting challenges to all developing countries, and particularly other trade champions like Mexico in nearly all sectors, from textiles to other more value-added industrialised products.

English Spanish

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