China’s Economic Impacts on Latin America

Abstract

The chapter considers three aspects of China’s economic impact on Latin America and the Caribbean (LAC). It looks first at the direct and indirect effects of increased Chinese demand for commodities, which benefitted a number of LAC economies in the short and medium term. China’s role in financing and building infrastructure in the region has been less significant than in Sub-Saharan Africa (SSA). The impact on manufacturing has been of much greater concern, with all the main countries in the region facing increased competition in the domestic market, and those that had developed significant exports of manufactures also losing out in third markets. Three case studies of Brazil, Mexico, and Chile illustrate different patterns of economic relations between China and Latin America.