Economy

UN Report Reveals ‘Worrying’ Trend in LatAm Exports to China, According to Reuters

Concerns Over Latin America’s Export Specialization to China

By Natalia A. Ramos Miranda

SANTIAGO – A recent report from the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) highlights a concerning trend in the increasing specialization of Latin America’s exports to China, particularly in the oil and mining sectors.

ECLAC cautioned that as China progresses with its energy decarbonization initiatives, staple commodities from Latin America, such as oil, could be jeopardized.

Latin America’s trade with China has experienced remarkable growth, soaring to nearly $500 billion last year from approximately $14 billion in 2000. However, this expansion has been dominated by a limited range of commodities.

The commission pointed out that the trade relationship between Latin America and China conveys a mixed outlook. Although traditional export commodities are prominent, there are also growing opportunities for exports like lithium, which is increasingly sought after for electric vehicle batteries.

Chile and Peru lead the world in copper production, while South America also features the "Lithium Triangle," comprising Chile, Argentina, and Bolivia. Additionally, agriculture and livestock, specifically soybeans and beef, constitute around 20% of Latin America’s exports to China, with the sector playing a crucial role in boosting trade in the near term.

ECLAC emphasized that the region’s abundant natural and water resources grant it a comparative advantage in supplying nutritious and high-quality food to China. This is particularly relevant as China faces mounting trade tensions with the United States and supply chain disruptions due to the ongoing war in Ukraine.

Since becoming a net food importer in 2004, China has increasingly turned to Latin America, especially Brazil, for essential goods such as cane sugar, soybean oil, cherries, shrimp, and frozen beef.

Furthermore, ECLAC noted that China’s influence in Latin American markets has expanded in recent years, particularly in the manufacturing sector, resulting in "conflicting effects." While households in the region now enjoy greater access to manufactured goods, local production has suffered considerably, undermining domestic industries and job opportunities.

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