The Dragon in the Room: China and the Future of Latin American Industrialization

The Dragon in the Room: China and the Future of Latin American Industrialization

The Dragon in the Room: China and the Future of Latin American Industrialization

The Dragon in the Room: China and the Future of Latin American Industrialization

Synopsis

In the eyes of many, China's unprecedented economic rise has brought nothing but good news to the countries of Latin America and the Caribbean. Indeed, China's growing appetite for primary products, and the ability of Latin America to supply that demand, has played a role in restoring growth in Latin America, both in the run-up to the global financial crisis and in its aftermath.

The dragon in the room that few are talking about is the fact that China is simultaneously out-competing Latin American manufacturers in world markets- so much so that it may threaten the ability of the region to generate long-term economic growth. One of the authors' key claims is that China is rapidly building the technological capabilities necessary for industrial development, whereas Latin American tech innovation and sophistication lags considerably. At a deeper level, the findings in this volume imply that China's road to globalization, one that emphasizes gradualism and coordinated macro-economic and industrial policies, is far superior to the "Washington Consensus" route taken by most Latin American nations, particularly Mexico.

Excerpt

”China is an awakening monster that can eat us.”

Carlos Zúñiga, Nicaraguan CAFTA negotiator
La Prensa (Nicaragua), March 10, 2004

”What are the factors driving the crisis of the textile sector? First is the global
competition of China, which is more and more present in every market.”

Isaac Soloducbo, president of Paylana, a leading exporter of
high-quality wool-based apparel in Uruguay

El Observador (Uruguay), November 20, 2006, p.13

There is a growing clamor in Latin America and the Caribbean (LAC) over the extent to which the region is being economically swallowed by China. Some claim that China’s exports are flooding domestic LAC markets and wiping out local firms. Others refer to China as an “angel” for the region that will deliver the fruits of growth by importing LAC goods and investing in the LAC region. Yet there is no contention at all in LAC(or anywhere else) that China’s export-led economic expansion since the early 1980s has been anything short of a miracle.

Amid all this chatter, what is strikingly absent from the discussion is a clear understanding of how China is globalizing its economy and what lessons that method might lend to the conundrum of economic development in LAC. Yes, China’s growing appetite for primary products, and the ability of Latin America to supply that demand, played a role in restoring growth in Latin America, both in the run-up to the global financial crisis and in its aftermath. Yet, the dragon in the room that few are talking about is that China is simultaneously out-competing Latin American manufactures in world markets—so much so that it may threaten the ability of the region to generate long-run economic growth. What receives even less attention is that China’s road to globalization, one that emphasizes gradualism and coordinated macro-economic and industrial policies, is far superior to the “Washington Consensus” route taken by . . .

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.