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China in Latin America: Should We Be worried?

January 26, 2012

They used to say that when the United States sneezed, the rest of the world would catch a cold. This was especially true of Latin America which felt the impact of U.S. recessions in the 1980s and 90s harder than the U.S. did. Fortunately for Latin America, this is no longer the case...

...In order to extract natural resources more efficiently China has also invested billions in Latin America’s infrastructure. According to a study by the UN Economic Commission for Latin America and the Caribbean (ECLAC) China invested $15.3 billion in the region during 2010. Americas Quarterly points out that China’s investment to Latin America has increased by 400% during the past decade.

Most countries in Latin America are now less reliant on the U.S. economy and the financial health of U.S. businesses and consumers. Economic diversity is a good thing, but the new reliance on Chinese commodity demand and China’s state-run companies is worrisome.

This week I got a sneak peak at a special issue of Americas Quarterly, which highlights some of the pitfalls of being buddies with China...

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