{
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"Matt Ferchen"
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China’s domestic development drive has prompted it to develop trade relations with Latin America. While generating positive economic results for both sides in the short-term, the threat of Latin America once again falling into a pattern of export dependency—this time with China—looms large.
Source: Chinese Journal of International Politics
In his article ‘China-Latin America Relations: Long-Term Boon or Short-Term Boom?’, Dr. Matt Ferchen pinpoints the resultant dual narratives, some describing the China–Latin America relationship as complementary and others emphasizing dependency. The author demonstrates, however, that no assessment of the health and stability of the China–Latin America relationship can be complete without better understanding of Chinese commodity demand. Chinese demand for key Latin American commodities, including mineral resources such as iron ore, is based on a boom in domestic Chinese heavy industrial production, which in turn has fueled a global commodity boom of inputs to feed it. Chinese industrial (over)production has increased only as a result of stimulus and credit policies in the wake of the global financial crisis, causing concern inside and outside of China about capacity and asset bubbles.
The basis of China–Latin America trade and investment relations, therefore, the author emphasizes, is both narrower and more fragile than commonly understood. To align overly optimistic expectations about the health and sustainability of China–Latin America relations, both sides need to assess more realistically the many challenges to maintaining the boom in economic relations of the last decade.
This article was originally published in the Chinese Journal of International Politics.
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
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