China’s rise has exerted a well-documented economic impact in Latin America. South American economists worry about the loss of value-adding industries as raw materials like iron ore, copper, oil, and soybeans come to dominate their exports to China (currently more than 90 percent). The region’s economies, say the critics, are overexposed not only to the volatility of commodity prices, but also to de-industrialization, since high exchange rates fueled by resource exports between 2010 and 2014 undermined the competitiveness of national manufacturers.
If South American observers are alarmed by these developments, their counterparts in Central America and the Caribbean are petrified. From the Panama Canal’s industrial zone to the maquila factories of Northern Mexico, Latin American manufacturers are unable to contend with Chinese competition. Worse still, they have neither the mines nor farmland of their Southern neighbors to service China’s voracious appetite for commodities.
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