New China-Latin American Economic Bulletin, 2020

China-LACThese are the findings of the 2020 China-Latin America Economic Bulletin, which brings together the most important annual trends for this burgeoning relationship in terms of trade, finance, and investment.

Latin American and Caribbean trade with China hit record levels in 2019, in a relationship that continues to be focused on exporting raw materials and attracting Chinese infrastructure investment. At the same time, Chinese development finance to Latin American and Caribbean governments slumped to $1.1 billion, a sharp decline from the early years of this decade. These findings were published in the 2019 China-Latin America Economic Bulletin, the China-Latin America Finance Database (produced in cooperation with the Inter-American Dialogue), and the GDP Center-Dialogue joint paper, Scaling Back: Chinese Development Finance in LAC, 2019.

The goal of the bulletin, database, and annual paper series is to provide analysts and observers a handy reference to the ever-changing landscape of China-Latin America economic relations, a landscape where data is not always as readily accessible. Highlights from this year’s bulletin include:

 

  • LAC trade with China hit record levels in 2019, as the region exported $141.5 billion in goods (2.7% of regional GDP) to China and imported $161.7 billion (3.1% of regional GDP) in Chinese goods. Since both exports and imports rose at about the same rate, the resulting merchandise trade deficit, 0.4% of regional GDP, held steady from 2018.
  • LAC exports to China continue to be concentrated in a few raw commodities, particularly soybeans, copper, petroleum, and iron. Thus, countries that export these commodities saw continued merchandise trade surpluses with China, while other LAC countries saw growing merchandise trade deficits. For soybeans in particular, the China-US trade dispute of the last few years has spurred a major South American boom, particularly in Argentina, Brazil, and Uruguay, as Chinese importers substituted away from US producers.
  • LAC development finance from the China Development Band the Export-Import Bank of China fell to $1.1 billion, its lowest level in over a decade, as Ecuador, Brazil, and Venezuela ceased borrowing.
  • New announcements of Chinese investment boomed for new (“greenfield”) projects, with $12 billion in new announcements, while mergers and acquisitions fell for the second consecutive year, to just $4.3 billion. In each avenue, infrastructure investments – particularly ports and hydroelectric dams – dominated.
  • In economic diplomacy, Ecuador became LAC’s first full member of the Asian Infrastructure Investment Bank. Seven additional countries are prospective members. Jamaica and Peru joined the Belt and Road Initiative, bringing the total number of LAC BRI countries to 19.

 

For the China-Latin America Finance Database, click here.

 

This China-Latin America Economic Bulletin is the seventh annual note summarizing and synthesizing trends in the burgeoning China-Latin America economic relationship. The goal of the bulletin is to provide analysts and observers a handy reference to the ever-changing landscape of China-Latin America economic relations, a landscape where data is not always as readily accessible.