Americas Quarterly - Winter 2012

OSVALDO ROSALES Trade Competition from China

FIGURE 2

Effect of China’s Industrial Exports on Latin American Exports 2010 (Selected Countries)

U.S. MARKET
SELECTED FOUR
COUNTRIES’ MARKETS

Mexico
(94% of the total)

Brazil (51%), Mexico (30%),
Argentina (13%), Colombia (5%)

Source: ECLAC Division of International Trade and Integration, on the basis of UN COMTRADE data

sion transmitters, telephone equipment, radio receivers, recording and reproduction equipment, insulated wires and cables, motors, electrical generators and transformers, and chemicals. Overall, in 2010 the affected market share for the four selected countries represented 25 percent of their total exports to the U.S., with Mexico alone accounting for 93 percent of the total loss [see figure 2].

In the four Latin American markets, the share of exports subject to increased competition from China reached 12 percent of their total intraregional industry exports, with products especially affected in the export industries of Brazil, Mexico and Argentina, which combine for a total share of 94 percent of the total [See figure 2].

As for the EU market, the share of affected exports from the selected Latin American countries was just 4 percent, leading to the conclusion that there has been no significant change in the past five years. Since 1998 China had already surpassed the market share of Latin America and the Caribbean in the EU market, and there was little room for more growth.

COMPETITION IN
DOMESTIC MARKETS

To measure the impact of Chinese competition on the domestic industries of the selected countries, we monitored industrial imports, and calculated the proportion of imports from China in the apparent

AMERICASQUARTERLY.ORG

consumption level of 11 industry groups and six industrial sectors. This helped identify the principal Chinese imports eroding domestic products: textiles and garments, rubber and plastic products, metal products, machinery and equipment, and motor vehicles and parts. In Figure 3 we present the extent to which Chinese products in those sectors in the Colombian, Brazilian and Mexican markets increased between 2005 and 2010.

For Argentina, apparent consumption data by sector were not available, but we discovered several sensitive sectors by reviewing the countermeasures taken to curb Chinese imports, such as import licensing and the application of anti-dumping surcharges. The industries classified as sensitive include textiles, footwear, metal products, and machinery and equipment. By product, particularly sensitive cases are cotton, screws, nuts and bolts, pipes and pipe fittings, steel, toys, Christmas trees and ornaments, and vehicle spare parts. 1

In Colombia, the domestic industries most affected by Chinese competition are metals and products, machinery and equipment, rubber and plastics, and textiles and clothing. Imports of these four groups of industries from China increased at an annualized rate of 28 percent between 2005 and 2010, while the combined imports of the same group from the rest of the world grew at a much lower rate ( 15 percent). In the same period, the expansion of the apparent consumption of the entire Colombian economy was about 14 percent. The differ-