Mirror trade statistics between China and Latin America

Keyword: 
Trade
Topic: 
Globalization - Trade

This paper examines the accuracy of the trade statistics between the People’s Republic of China and twenty Latin American countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, and Venezuela. This paper contrasts the mirror trade statistics between China and twenty Latin American countries during the 2009-2014 years, after adding to the Chinese side the trade figures corresponding to Hong Kong, and adjusting for some valuation issues. Using the resulting panel data, the paper then explores some of the possible explanatory variables, in the case of Latin America, which can account for the significant trade misinvoicing that is found among most of the countries involved. Trade misinvoicing, be that from the part of China or of its partners, varies substantially across Latin America. It is quite large in the case of some countries such as Bolivia, Costa Rica, Mexico, Panama, and Paraguay, and, on the opposite side, relatively small in the case of other countries such as Argentina, Brazil, Chile, Guatemala, and Venezuela. It is found that, from a Latin American perspective, trade misinvoicing is positively related to the countries’ lack of statistical capacity and their degree of financial openness. This is the first empirical paper that examines the mirror trade statistics between China and Latin American.

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