Fear of China: Is there a Future for Manufacturing in Latin America?
Apr 2006
China┬┐s emergence has raised pointed questions about the future of manufacturing in Latin America. This paper looks at this challenge and its implications. It begins by asking: Does manufacturing still matter for Latin America? It argues that the region cannot afford to turn its back to a well-proven road to development. It then moves on to show that endowments, productivity, scale and the government┬┐s role, all work together to make China a formidable competitor. The importance of this challenge is confirmed by an analysis of the trade data, which suggests a small impact so far, but a disquieting trend.