Measuring Latin America’s export dependency on China

Produced by: 
BBVA Research
Available from: 
August 2015
Paper author(s): 
Carlos Casanova
Le Xia
Romina Ferreira
Topic: 
Globalization - Trade
Year: 
2015

Bilateral trade between China and Latin America has grown very quickly in the last decade. As a consequence, economic relationships with Latin America intensified tremendously, as growing demand for resources drove China into relatively unexplored frontiers. In this paper we deploy an export dependency index to identify the sectors and countries in Latin America which are most exposed to fluctuations in Chinese demand. According to our estimates, dependency on China increased overboard across Latin America for all countries and all sectors between 2008 and 2014. Absolute dependency levels were highest in Costa Rica, Colombia, Uruguay, Venezuela, Brazil, Panama, Peru, Chile, Guyana and Argentina. Of these, the largest exporters to China, namely Brazil, Argentina, Chile, Peru, Colombia, and Venezuela, featured high dependencies concentrated around just four commodities: soy in the form of soybeans and soybean oil; crude oil; copper in the form of copper ore, copper cathodes and unrefined copper; and iron ore. These four commodities, accounted for 80% of the regions total exports to China. 

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