Kevin P. Gallagher analyzes Latin America’s response to Chinese investment in the region.
Latin America was hardly on China’s radar screen until the turn of the century when the Asian giant’s entry into the World Trade Organization allowed it to integrate more fully into the world economy. China’s subsequent rise has created an unprecedented demand for Latin American and Caribbean goods, particularly commodities, which has helped boost the region’s growth for almost a decade. Ultimately, however, such export growth may prove unsustainable. Perhaps even worse, Chinese manufactured goods are more competitive than those from Latin America in both home and world markets. These twin trends may jeopardize Latin America’s prospects for long-term growth.