Latin American growth and China
Andres Oppenheimer comes late to the idea that Brazil is not sitting meekly while China somehow overwhelms it. This is not really new, but two things caught my eye:
First, according to a Brazilian paper 42% of Brazilian executives working for Chinese firms quit within the first year. If that is true, or even close to true, it highlights how complicated the relationship can be. Chinese companies need Brazilians to make things work, and alienating elites can sour everything. It is not like a century ago when foreign companies came in, paid off elites, and extracted they wanted.
Second, he has a great quote, which I could see putting on a 3x5 card and pulling out anytime someone talks about the incredible recent economic growth in Latin America:
Unfortunately, some South American governments have been fooling their populations by claiming that their recent growth was due to novel economic policies, rather than by a Chinese buying spree that may not last forever.
1 comments:
Great article by Oppenheimer. Indeed he is right, demagogues like Lula, the Kichrners and other southamerican presidents have converted their countries into commodity and raw materials exports. Brasil manages to export some manufactured products, airplanes, but still more than 75% of their exports to China is cereals, minerals and other commodities. But Argentina's case is actually offensive, it has become a Soy Republic and almost specifically exports soy to China. Brazil, Argentina, Paraguay are highly dependent of the global price of a few commodities, soy included.
They critize Mexico for its trade dependency to the US, but Mexico's industry is highly diversified, in fact more than 80% of all Mexican exports to the world are manufactured products of added value, increasingly Mexico is diversifying its industries and is now developing a strong airspace manufacturing sector with hundreds of companies manufacturing airspace parts and products.
By contrary, Brazil and Argentina have diversified their markets, but not their production and the commodity dependence and overvalued currencies is also affecting their current industry, lacking competitiveness.
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