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The Competitive Threat Posed by the People's Republic of China to Latin America: An Analysis for 1990-2002

dc.contributor.authorSanjaya Lall
dc.contributor.authorJohn Weiss
dc.description.abstractThis paper explores the competitive threat posed by the People’s Republic of China to markets in Latin America and the Caribbean (LAC). It focuses on the impact of PRC’s rise as a major exporter of manufactures, but it also considers bilateral trade between LAC and PRC. In response to falling trade costs and greater international capital mobility, PRC has emerged as a major exporter at both the labor-intensive low technology and increasingly at the knowledge-intensive higher technology end of the product spectrum. Latin America is still somewhat distant from this process. Some countries are benefiting from growing imports of primary and resource-based products by PRC, although in general PRC remains a relatively small market for LAC, although as an import supplier PRC overtook Japan in 2003. The trade structure of most of LAC is generally more complementary than competitive with that of PRC. The exceptions are principally Mexico and Costa Rica, which, similar to PRC, are closely integrated into production networks of MNCs. With a differing export structure the likelihood of damaging trade diversion effects is weakened. Our analysis of bilateral trade between LAC and PRC reveals a striking tendency towards a pattern of specialization with LAC a net exporter of primary products and a net importer of manufactures. The patterns of the two regions are almost a classic textbook illustration of trade between developing and industrialized regions, where the former (i.e. LAC) strengthens its specialization in primary products and processes resources while the latter (i.e. PRC) does the reverse. What is surprising is that LAC is the richer region, with a longer history of modern industrialization, higher human resources, more FDI per capita and with more liberal trade and investment regimes. The original version of this paper was prepared for the CDRF/ADBI/IDB First LAEBA Annual Conference on ‘The Emergence of China: Challenges and Opportunities for Latin America and Asia’ held in Beijing on 3-4 December 2004.
dc.publisherAsian Development Bank Institute
dc.rightsCC BY 3.0 IGO
dc.titleThe Competitive Threat Posed by the People's Republic of China to Latin America: An Analysis for 1990-2002
dc.typeWorking Papers
dc.subject.expertRegional Economy
dc.subject.expertRegional Trading Arrangements
dc.subject.expertRegional Trade Integration
dc.subject.expertRegional Economic Integration
dc.subject.expertRegional Cooperation
dc.subject.expertInterregional Cooperation
dc.subject.expertTrade Disputes
dc.subject.expertTrade Barriers
dc.subject.adbEconomic integration
dc.subject.adbRegional Development Bank
dc.subject.adbPreferential tariffs
dc.subject.adbInternational negotiation
dc.subject.adbProtectionist measures
dc.subject.adbAccess to markets
dc.subject.adbEconomic agreements
dc.subject.adbInternational trade law
dc.subject.adbRegional integration
dc.subject.adbTrade relations
dc.subject.naturalRegional disparities
dc.subject.naturalRegional economic disparities
dc.subject.naturalRegional economic blocs
dc.subject.naturalIndustrial arbitration
dc.title.seriesResearch Paper Series
dc.contributor.imprintAsian Development Bank
oar.adminregionEast Asia Region
oar.countryPeople's Republic of China
oar.authorLall, Sanjaya
oar.authorWeiss, John

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    The Asian Development Bank Institute (ADBI) research paper series disseminate selected work in progress to facilitate an exchange of ideas within academic and policy communities. An objective of the series is to circulate primary findings promptly, regardless of the degree of finish. ADBI’s activities are guided by its three strategic priority themes of inclusive and sustainable growth, regional cooperation and integration, and governance for policies and institutions.

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