Latin America: Shift in Direction Fuels Growth Across Continent

Latin America has remained largely immune to the global financial crisis sweeping through developed economies due to burgeoning trade ties with Asia, particularly China. In the last 10 years, trade between Latin America and China rose sixfold to $230 billion. China is the biggest trading partner for Brazil and Chile, according to the Inter-American Development Bank. This rapid rise is mainly fueled by China’s hunger for Latin American commodities from iron and copper to soybeans. Side effects of this include a prolonged commodity price boom, upgrades to infrastructure, exposure to Chinese markets and a flood of Chinese goods headed for Latin American markets. Despite some setbacks for local industry, emerging economies in Latin America can for the first time relish an end of their vulnerability to fluctuations in the US economy. Replacing dependence on the US with dependence on China may not, however, reduce the stress of lopsided trade. – YaleGlobal