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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: elmatador who wrote (60307)2/13/2005 7:42:27 PM
From: RealMuLan  Read Replies (1) of 74559
 
Lex: Latin America and China
Published: February 13 2005 20:59 | Last updated: February 13 2005 20:59

The diplomatic orgy between Buenos Aires and Beijing last year prompted some wags to rename the southern cone country “Argenchina”. After all, the $20bn of investment promised by Hu Jintao, China's president, on his visit, could easily repay the $15bn Argentina owes the International Monetary Fund. The euphoria has spread across the continent. Some hope China might assume the role Europe played in the 19th century, providing insatiable demand for Latin American primary resources. This, in turn, might help solve the region's modern affliction with chronic external deficits. Latin America did record its first current account surplus for decades in 2003. But beyond this, the statistical evidence does not stack up. IMF data, as supplied by China, suggests suggest that in 2003 the region booked a $3.2bn trade surplus with mainland China, which continued during the first eight months of 2004. But IMF data from Latin America suggest a trade deficit of $8bn - a deterioration from 2002 - which continued during 2004.

Whichever version is correct, one fact is clear: China's impact is small, accounting for 3-4 per cent of regional exports. The Banco Central do Brasil thinks that China's share of Brazil's exports actually declined from 2003’s 6.2 per cent to 5.6 per cent in 2004 - compared to the US's 21 per cent. China dominates demand for roducts such as soya and meat. But the biggest single driver of Brazil's trade recovery was transport equipment - mainly aircraft plane maker Embraer.
news.ft.com
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