Trade with China has a significant relevance for growth in Latin America
The document, prepared by Jacopo Timini and Ayman El-Dahrawy Sánchez-Albornoz, of the General Directorate of Economics and Statistics of the central bank of Spain, notes that since China's entry into the World Trade Organization (WTO), Latin American exports to the Asian country have increased significantly, a fact that would have a positive impact on the growth of the region.
"Since China's entry into the WTO, Latin American exports to China have gone from representing 1.5 percent of the total in 2001 to 10 percent in 2017," the report explains. On the other hand, "imports from Latin American countries from China have also grown rapidly, becoming 18 percent of the total in 2017 (from 3 percent in 2001)," says the study.
This impact of China on Latin American growth can also be manifested through competition in third markets, according to the document, since the Asian country is a competitor for some countries in the region, "especially for those specialized in the production and export of goods".
"Empirical estimates indicate that trade exposure to China is significant for the growth of Latin American countries, (...) and that Latin American exports to that country would have had a positive and statistically significant impact on the growth rate of GDP per capita," says the report.
China is the 2nd commercial partner of Latin America
The volume of bilateral trade between the two blocks reached a record of 307.4 billion dollars in 2018, with an increase of 18.9 percent over the previous year, according to the data just released by the General Administration of Customs (AGA) of China in February.
The growing share of high value-added products, such as frozen meat, fruits, flowers, tobacco and alcohol, contributes to the increase in the value of exports from Latin America to China, according to Sun Yanfeng, deputy director of the Institute of Latin American Studies, under the Institute of Contemporary International Relations of China.
The value of China's exports to Latin America was 148 billion 790 million dollars last year, while that of imports stood at 158 billion 610 million, which meant increases of 13.7 and 24.1 percent, respectively, according to the AGA.