The Emergence of China: A View from Central America

Oct 2004
This study covers the impact of the emergence of China on Central American economies, with special emphasis on Guatemala and Honduras. The issue of the China¿s impact is generally approached from the standpoint of threats hovering over the economies of Central America (and of others in Region 2, such as Mexico and the Dominican Republic), without noting that the rapid growth and great openness of the Chinese economy also present new potentialities that the countries of the region could turn to their own advantage. This study presents analyses and recommendations for enhancing the competitive advantages already developed by Central American countries, particularly in the apparel and textiles sector, and others envisioned as possible, vis-à-vis the challenges that they face from the strong competitiveness of Chinese industries. But it also considers how to take advantage of the new opportunities offered by the Chinese market for exports of the region¿s goods and tourist services, and also the policies needed to begin to attract direct investment from that country.