Chinese Imports From Latin America

Click to Enlarge

When the 2008 financial crisis seized international trade and sent the European Union and the United States into recession, the immediate effects on Latin America were surprisingly muted. Bouncing back strongly, Argentina and Brazil saw gross domestic product growth rates of 9.2 percent and 7.5 percent, respectively, in 2010. While the recovery was brief in both cases, Chinese demand for South American commodities was an important factor. For a range of countries, Chinese demand has been an important external driver of growth. Brazil, Chile and Peru have all seen China rise to become the top customer, particularly for metals.

The primary driver of Chinese demand has been a boom in construction, which has consumed Peruvian and Chilean copper as well as Brazilian iron as building materials. At the same time, population growth and rising wealth have driven demand for soybeans in China. China is the biggest national importer of soybeans, consuming more than 40 percent of the globally traded supply. Brazil, Uruguay, Paraguay and Argentina are home to some of the world's best soybean cropland outside of North America, and together they supply about 26 percent of the market.

In the near term, potential for instability in China's economy poses serious questions for Latin America. China's growth has begun to slow, and while still high at around 7.4 percent year-on-year for the first quarter of 2014, the economy is visibly changing. Recent reports of bankruptcies or near-bankruptcies in the real estate sector underline the fragility and potential for instability in the one sector that has been driving demand for copper from Chile and Peru and iron from Brazil. More broadly, a slowdown could affect a range of activities from shipbuilding to infrastructure development that also consume Latin American iron and copper. A slowdown in metals exports presents the biggest risk to Brazil, along with Peru and Chile, of a sharp reduction in export revenues. Iron exports have already slowed, but should that become an extended decline, it will cause long-term harm to growth prospects.

Comments

Why States Still Use Barrel Bombs

Smoke ascends after a Syrian military helicopter allegedly dropped a barrel bomb over the city of Daraya on Jan. 31.(FADI DIRANI/AFP/Getty Images) Summary Barrel bombs are not especially effective weapons. They are often poorly constructed; they fail to detonate more often than other devices constructed for a similar purpose; and their lack of precision means they can have a disproportionate effect on civilian populations. However, combatants continue to use barrel bombs in conflicts, including in recent and ongoing conflicts in Africa and the Middle East, and they are ideally suited to the requirements of resource-poor states. Analysis Barrel bombs are improvised devices that contain explosive filling and shrapnel packed into a container, often in a cylindrical shape such as a barrel. The devices continue to be dropped on towns all over Syria . Indeed, there have been several documented cases of their use in Iraq over the past months, and residents of the city of Mosul, which was re

Russia Looks East for New Oil Markets

Click to Enlarge In the final years of the Soviet Union, Soviet leader Mikhail Gorbachev began orienting his foreign policy toward Asia in response to a rising Japan. Putin has also piloted a much-touted pivot to Asia, coinciding with renewed U.S. interest in the area. A good expression of intent was Russia's hosting of the Asia-Pacific Economic Cooperation summit in 2012 in Vladivostok, near Russia's borders with China and North Korea. Although its efforts in Asia have been limited by more direct interests in Russia's periphery and in Europe, Moscow recently has been able to look more to the east. Part of this renewed interest involves finding new export markets for Russian hydrocarbons. Russia's economy relies on energy exports, particularly crude oil and natural gas exported via pipeline to the West. However, Western Europe is diversifying its energy sources as new supplies come online out of a desire to reduce its dependence on Russian energy supplies . This has

LONDON POLICE INDIRECTLY ENCOURAGE CRIMINALS TO ATTACK RUSSIAN DIPLOMATIC PROPERTY

ILLUSTRATIVE IMAGE A few days ago an unknown perpetrator trespassed on the territory of the Russian Trade Delegation in London, causing damage to the property and the vehicles belonging to the trade delegation , Russian Foreign Ministry Spokeswoman Maria Zakharova said during the September 12 press briefing. The diplomat revealed the response by the London police was discouraging. Police told that the case does not have any prospects and is likely to be closed. This was made despite the fact that the British law enforcement was provided with video surveillance tapes and detailed information shedding light on the incident. By this byehavior, British law inforcements indirectly encourage criminals to continue attacks on Russian diplomatic property in the UK. Zakharova’s statement on “Trespassing on the Russian Trade Mission premises in London” ( source ): During our briefings, we have repeatedly discussed compliance with the Vienna Convention on Diplomatic Relations, specif

Search This Blog