China’s President Hu Jintao has just returned home from his first trip to Latin America, where he sought new long-term sources of supplies for his country’s booming economy. These new ties offer Latin America and the Caribbean both a new market and an example of how a dynamic economy can reduce poverty.
But Latin America should also be on its guard. While China may be a ravenous importer of Latin American commodities, it is also a formidable competitor. Both the public and private sector throughout the region should take immediate measures to face up to this new competition and to work toward cooperative projects with the Chinese.
Ordinary people in Latin America are only now recognizing China’s importance as a global economic player. Indeed, until recently, most people took little notice of China. But China’s soaring growth, seen in contrast with stagnation in Latin America’s economies, has awakened governments and businessmen across the region.
Comparisons between China’s economy and that of Latin America are stunning. The World Bank estimates that dire poverty in China, calculated as individual income of $1 per day, has been reduced from about 500 million people at the start of the 1980’s to less than 90 million in 2000. Meanwhile, poverty rates in South America have remained relatively constant.