China’s impact on Latin America

Abstract

China’s rapid economic growth and increased openness has been one of the most significant developments in the global economy over the past 25 years. This paper analyses China’s impacts on the Latin American economies, and in particular the challenges that China poses for the region. It discusses both the direct impacts arising from bilateral trade and investment flows between China and Latin America, the indirect impacts associated with Chinese competition in export markets and for foreign direct investment, and the positive terms of trade effects resulting from China’s increased demand for raw materials. Challenges identified include the recent rapid increase of competition from Chinese imports in the Latin American market, the concentration of exports to China in a narrow range of primary products and the uneven distribution of profits from trade with China within Latin America.

Keywords

• China
• Latin America
• exports
• imports
• foreign direct investment
• competition