The Growing Relationship Between China And Latin America: An Economic Overview

China’s Dependence on Latin America for Raw Materials

• This case is about the relationship between China and Latin American countries
• It is a very vital relation for both the economies
• Especially because China’s growing economy need access to foreign energy
• This relationship is mostly based on imports and exports
• China importing raw materials from Latin American Countries

• Trade relationship with China is beneficial but caution is necessary.
• The social, economic, social and political benefits of a trade relationship with China outweigh the concerns, hence this relationship is recommended.
• The social, economic, social and political concerns that arise from a trade relationship with China can be mitigated through Latin American nations implementing appropriate laws and policy to protect their domestic industries and workers, political interests, and the environment.

• Country risk assessment criteria stipulates that the viability of a country as a trading partner can be determined by a number of political and economic environmental factors (Kotabe, M., 2014, p. 96).

Today we will be looking at:

• Social benefits and concerns
• Economic benefits and concerns
• Political benefits and concerns
• Environmental benefits and concerns

• Suppression of Poverty

Multi-channel exchange of rules and regulations between China and Latin America has supported in executing several friendly policies and procedures and thus protect the interest of poor. In addition, enormous employment opportunities have also been generated which has also helped in mitigation of poverty.  

• Social Inclusion

Corpora ration with China has also helped Latin America to strengthen their social governance and there by practice equality in the society.   

• Redistribution of Income
• Rapid Urbanization 

With the assistance of healthy relationship with China. Latin America has become able to implement national security strategy. 

However, the issue of excluding poor from any kind of economic activity. 

Infrastructure is one of the major social issue for Latin America in trading with China. Lack of technology and human resources of China is hampering the ability to Latin America.  

Limited access of foreign countries to some sectors such as telecommunication, energy and automobile 

Lack of skilled staffs due to lower wage 

Lower value of trade secrets 

Practice of inequality in terms of giving pension to elderly people  

Economic development for both china and Latin America

4 nations contributed to being 90% of China’s imports Brazil (41%), Chile (23.1%), Argentina (15.9%), and Peru (9.3%)

Increase in net foreign lending, which lowered the cost of capital for net debtors of LAC 

Exports from China and from LAC complement rather than substitute each other in world markets

Intellectual property law is relatively in appropriate in China which can pose difficulty for Latin America to protect their valuable resources. 

The operational cost of running business in China is quite high. This creates the western countries like Latin America to run their business in a cost effective manner. 

Growing debt is also a major financial issue for China which can hinder Latin America’s ability.  

China and Latin America has a politically neutral relationship

Latin America rearrange it’s institutional and structural link with united states, regions second economic independence.

By offering attractive economic development model for Latin America, China stands to increase huge  worldwide prestige

Latin American is the proving ground for a “diplomatic truce” between China and Taiwan

Political uncertainty is quite high and rate of turnover the governmental officials is rapidly increasing.

Recently china is being criticised for giving the state owned enterprises with favourable treatment

China is also showing less concern to the needs and requirements of foreign countries. 

Conflict among the communist party is a major political which is accelerating the chances of uncertainty. 

The focus of China towards the agricultural sector of Latin America is increasing the rate of water supply in the country.

Multiple renewable energy projects had been undertaken which is leading Latin America to utilize their renewable energy resources in an effective manner. 

Reduce the rate of heavy environmental foot print. 

Due to the construction of road and buildings, the rate of deforestation in Latin America is rapidly increasing 

The construction of dam is also being considered as a major driver of environmental degradation of the country. 

The focus of china towards the extractive sectors is also expanding the trend of green house gas emission 

As the  rate of environmental degradation is rapidly increasing, it is imperative to lower the rate of construction. 

The materials, that are being used for construction must be eco-friendly which can help in decreasing the rate of pollution. 

It is recommended for Latin America to set a considerable salary structure for all the employees without making any kind of discrimination.

Any kind o equal practices with the people from lower socio-economic background must be avoided.  

Reference List 

China’s 21st-century challenges in 2018 – opinion – chinadaily.Com.Cn. (2018). Retrieved from https://www.Chinadaily.Com.Cn/a/201712/25/ws5a4094eaa31008cf16da34d2.Html

China’s rising interest in Latin America – china business review. (2018). Retrieved from

https://www.Chinabusinessreview.Com/chinas-rising-interest-in-latin-america/

Examining china’s environmental and social impact in Latin America | DW | 15.04.2015. (2018). Retrieved from https://www.Dw.Com/en/examining-chinas-environmental-and-social-impact-in-latin-america/a-18385274

How china handles economic challenges. (2018). Retrieved from https://www.Weforum.Org/agenda/2015/03/how-china-handles-economic-challenges/

Who really benefits from china’s trade with Latin America? | Annie Kelly. (2018). Retrieved from https://www.Theguardian.Com/global-development/poverty-matters/2011/feb/16/china-latin-america-trade-benefit