China and Latin America. Economic relations in the twenty-first century

Abstract

This book analyses the impact of China on Latin American economies and focuses specifically on the challenges which China poses for the region at the beginning of the 21st century. First, however, the spectacular eco- nomic performance of China will be briefly documented.1 While Latin America entered a period of economic stagnation in the 1980s, China was starting a period of rapid economic growth.2 In 1980 China’s total GDP was only 14% of that of Latin America and the Caribbean but by 2007 it had risen to 93% of the total for the region in constant US dollars. Since 1980, the Chinese economy has grown at almost 10% p.a. and as a result per capita income has increased seven-fold. Not only did China grow rapidly, but it also became a much more open economy. Between 1995 and 2005, Chinese exports grew by 18% p.a. in value terms and imports by 17% p.a. In the 1970s, before the start of the economic opening, trade as a share of GDP in China was less than 10%. By 2007 this had increased to over 40% (World Bank 2009). As a result, China’s share of world trade has risen from less than 1% in 1980 to around 7%, making it the third largest trading economy. It has been predicted that it would become the world’s largest exporter by the beginning of the next decade (OECD 2005) and probably much earlier as a result of the current global crisis.