Here's a striking stat from last week's Economist:
But the pattern of trade and investment so far reinforces the fear among some Latin Americans that China is causing the region to respecialise in commodities, as it did in the 19th century, to the detriment of industry. While China’s exports to the region span a wide range of manufactured goods, its imports are highly concentrated in a few commodities (see chart 2). Soyabeans and iron ore account for two-thirds of Brazil’s exports to China, and crude oil for a further 10%. (By contrast, Brazil’s exports to the United States are mainly manufactures.)If I were an aspiring economic superpower and almost 80% of my exports to my largest trading partner were three essentially raw commodities with little value-added, I'd be a little concerned. One is hard-pressed to find any examples of nations who climbed (and stayed atop) the economic ladder through commodities alone. Maybe Norway is the best example? But I feel like Norway had a lot else going for it as well. And as the Economist article points out, while "this specialisation is not necessarily damaging in itself," Latin American countries will have to find ways to improve the competitiveness of the parts of the economy that actually make widgets, rather than pulling black or green gold from the earth.
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