The Impact of China's Global Economic Expansion on Latin America

The growing competitiveness and international presence of China has both positive and negative economic impacts on other developing countries. The research will evaluate the impacts of the growth of China and the shift of global industrial activity to East Asia on Latin America. It asks which countries in the region are the main winners and losers and how the changes brought about by the rise of China are likely to affect economic development.

Five main channels through which the growth of China may affect the region are identified:

1. Increased demand for Latin American commodity exports
2. Increased competition from China for Latin American exports to third markets
3. Increased competition from China in domestic markets in Latin America
4. Diversion of FDI from Latin America to China
5. Increased Chinese FDI in Latin America

The research will be carried out in two phases. Phase 1 will provide an overview of the impact of China on the trade and investment flows of the major Latin American economies and a selection of the smaller countries. It will analyse the relative importance of the different impacts in individual countries and identify the key sectors that are affected by the growth of China. This will be based on internationally available trade and FDI data.

Phase 2 will provide a more detailed analysis of four countries (Argentina, Brazil, Chile and Mexico). Within each country two value chains where the impact of China has been significant will be analysed in depth. In addition to further analysis of trade and FDI data, the country studies will involve interviews with firms and business representatives within the selected value chains. These will be carried out by local collaborators in the four countries.

The disciplines contributing to the research are primarily development studies, economics and geography.

Prof Rhys Jenkins
University of East Anglia

Prof Rhys Jenkins
School of Development Studies / Overseas Development Group
University of East Anglia

Tel: 01603 592813

Duration of Research:
April 2006 - December 2007