China and Latin America, the Resource Trap

New comer in Latin America, China has become a trading partner as important as EU. China's appetite for natural resource has been the engine of Latin American growth in the 2000, while Chinese slowing down has contributed to the recent crisis of several Latin American countries. This article begins by an assessment of Chinese economic footprint on Latin American economies: while it is strong in the case of trade and it is rapidly increasing in the case of direct investment as well as in the case of credit with the exception of Venezuela and Ecuador. A second part analyses more thoroughly the impact of the Chinese economy on Brazil. While the surge of exports to China lifted the external constraint on Brazil, the country was unable to make use this lever to transform the production structure. Thus the financial boon provided by Chinese exports was at the root of the crisis Brazilian governments were unable or unwilling to fight. In its conclusion the article explores short and medium term perspectives and discusses the future of economic complementarities between China and Latin America.