Deindustrialization of China in Latin America and the Caribbean – eju.tv

ECLAC Economic Affairs Officer Zebulun Kreiter stressed that the Bolivian case is much more obvious, since 95% of Bolivian exports to China are primary products.

La Paz, November 7 (ANF) .- The Economic Commission for the 39 Latin America and the Caribbean (ECLAC), through its official services Zebulun Kreiter, Department of Economic Affairs, said China's high demand for raw materials has led to deindustrialization of the region. He warned that the case of Bolivia was much more obvious, since 95% of exports to the Asian giant were raw materials.

"Since 2000, China's demand for raw materials has increased prices and consequently the value exported from Latin America and the Caribbean (…) .In this period, the region has experienced a deindustrialization caused by a combination of some progress in export diversification, caused by rising prices and appreciation of foreign currencies and by strong competition from Chinese manufacturers, "said the expert.

conference "The Foodland, an abandoned program" organized by Fundación TIERRA, the representative of ECLAC said that it was necessary to move to a more balanced economic relationship with China, but also said that the change in the Chinese development model offered opportunities to Latin American countries.

"In the case of Bolivia, exports predominate in primary products, 95% of Bolivian exports to China are primary products, the structure of exports to the rest of the world contains primary products but less than the structure trade with China, "he said.

The Consequences on Exports

Kreiter explained that in 2000, China was the world's seventh largest exporter with 3.9% of global exports and 3, 3% of imports, but 2017 has changed the game by focusing on 12.8% of world exports and 10.2% of imports. "This impressive growth has required many commodities," he said.

Latin America and the Caribbean exports to China increased from 1.1% in 2000 to 10.3% in 2017 in the case of Bolivia in 2000. exported less than 1% to China and this amount was almost 5% in 2017.

The region's exports to China are dominated by primary products and natural resource-based manufactured products, points out the expert.

"The export structure of the region has changed in recent decades: in 2000, the region exported all over the world and its products were 80% natural resource manufactured products, but the year was last, the composition of its exports was 95% of primary products, 4% of low-tech products and 1%.

The composition of exports from Latin America and the Caribbean to China – specified the head of economic affairs – is reduced to a very small list in which five products account for more than half of exports: soybeans, minerals (copper, iron, silver) and oil.However, the composition of exports from the region to the world is very different and diverse, with added value.

Regarding the value of shipments from the region to China, they said they increased more than volumes because of the international market price, and between the exported value and volume exports, the differences are the price effects in terms of growth rate.

"The effect of price increases has had an effect on the types of real changes in the region, as in Colombia and Chile, the real exchange rate in 2018 is lower than in 2000, but in the case of Bolivia, in red, the value of the real effective exchange rate exceeds 50% A real effective exchange rate means that the price of manufactured goods is much less competitive in the foreign market and constitutes a risk for other sectors of the economy. Economy that does not depend on the prices of primary products. "

At the regional level, the share of manufactures in the export basket has declined over the past two decades. In 2010, 57% of the region's exports to the world were manufactured goods and in 2017, only 53% were manufactured goods. [19659005] In the case of Bolivia, the decline was much more pronounced: in 2000, the value of exports for the manufacturing sector was 42% and 14% in 2017.