China's Economic Influence in Latin America
21 Pages Posted: 10 Jul 2014
Date Written: July 2014
After decades of low‐level commercial interaction, China and Latin America significantly ramped up their economic relationship in the 2000s. China has jumped to first place as an export destination for many countries, and it is a major source of imports for all countries in the Latin America/Caribbean region. While not a major source of foreign direct investment overall, China has built a strong investment presence in certain countries, particularly in the natural resource and infrastructure sectors. China's influence in Latin America has presented a great opportunity for many countries, but it has also brought new risks. Three main challenges face the region: how to mitigate the impacts of increased commodity concentration as a result of China's strong demand for natural resources; how to avoid other natural resource curse effects; and how to manage the tapering of this growth. Latin American countries' relationships with China vary widely, so there is no single, coordinated regional response.
Keywords: China, Latin America, political economy, trade, trade agreement
JEL Classification: F13, F59, F63, 053, 054
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