China’s Growing Trade Dominance in Latin America
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China’s Growing Trade Dominance in Latin America

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Latin American trade, China versus U.S.

China’s Growing Trade Dominance in Latin America

Over the past 20 years, China’s economic presence around the world has grown significantly, including in Latin America.

Now, China is one of Latin America’s largest trade partners, which is threatening U.S. dominance in the region. This graphic by Latinometrics uses IMF data to show trade flows between China and Latin America since the 1980s.

Two Decades of Trade Growth

Four decades ago, the United States had a much stronger trade relationship with Latin America than China did. In 1981, Cuba was the only Latin American country trading more with China than the United States.

Here’s a look at total trade flows between Latin America and the two countries since 1980. Latinometrics calculated trade flows as total exports plus imports.

Trade Flows by YearU.S. & Latin AmericaChina & Latin America
1980$64,916.46M$1,149.20M
1981$68,954.16M$1,524.78M
1982$58,601.14M$1,381.61M
1983$53,347.45M$1,973.34M
1984$61,829.84M$1,573.58M
1985$62,241.61M$2,489.73M
1986$54,441.85M$1,888.88M
1987$62,890.00M$1,721.23M
1988$70,673.07M$2,433.94M
1989$79,140.76M$2,149.71M
1990$91,090.09M$1,997.48M
1991$127,120.71M$1,741.68M
1992$144,422.66M$2,051.77M
1993$159,873.67M$2,923.49M
1994$182,872.71M$3,724.97M
1995$204,901.92M$5,847.65M
1996$241,927.58M$6,711.47M
1997$290,032.40M$8,609.87M
1998$308,555.72M$8,844.21M
1999$341,504.58M$8,138.22M
2000$400,901.25M$12,452.97M
2001$371,377.08M$15,818.76M
2002$361,536.31M$19,033.47M
2003$369,218.54M$29,215.64M
2004$420,744.88M$42,242.20M
2005$477,850.02M$56,609.70M
2006$544,418.91M$77,528.04M
2007$585,446.96M$109,558.66M
2008$656,499.37M$140,274.87M
2009$493,741.65M$130,359.64M
2010$619,989.84M$193,853.31M
2011$751,891.79M$249,708.91M
2012$780,401.27M$264,908.73M
2013$785,444.16M$286,816.10M
2014$808,542.96M$281,412.70M
2015$728,071.40M$262,383.97M
2016$692,719.56M$245,403.45M
2017$750,289.25M$280,072.19M
2018$824,877.82M$331,131.25M
2019$807,868.87M$327,999.75M
2020$696,294.90M$311,584.87M
2021$895,309.53M$428,384.92M

Things stayed relatively stagnant until the early 2000s. Then suddenly, at the start of the new millennium, trade between China and Latin America started to ramp up.

This uptick was driven largely by Chinese demand for things like copper, oil, and other raw materials that the country needed to help fuel its industrial revolution.

Momentum has continued for two decades, and now China is the top trading partner in nine different Latin American countries. In fact, in 2021, imports and exports between China and Latin America (excluding Mexico) reached $247 billion—that’s $73 billion more than trade flows with the United States that same year.

Trade between China and Latin America is expected to keep growing, at least for the time being. By 2035, trade flows between the two regions are projected to more than double, according to World Economic Forum.

China’s Global Economic Presence

China’s trade takeover of Latin America speaks to a wider trend that’s happening on a global scale—over the last two decades, China has surpassed the U.S. as the world’s largest trading partner.

While China is likely to remain the world’s leading trade partner for the foreseeable future, growth is likely to slow in the short-term, given ongoing supply chain issues and geopolitical tensions that have disrupted the global economy.

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This article was published as a part of Visual Capitalist's Creator Program, which features data-driven visuals from some of our favorite Creators around the world.

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Visualizing China’s $18 Trillion Economy in One Chart

China’s economy reached a GDP of 114 trillion yuan ($18 trillion) in 2021, well above government targets. What sectors drove that growth?

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Visualizing China's Economy By Sector in 2021 Shareable

Visualizing China’s $18 Trillion Economy in 2021

China is the world’s second largest economy after the U.S., and it is expected to eventually climb into the number one position in the coming decades.

While China’s economy has had a much rockier start this year due to zero-tolerance COVID-19 lockdowns and supply chain issues, our visualization covers a full year of data for 2021⁠—a year in which most economies recovered after the initial chaos of the pandemic.

In 2021, China’s Gross Domestic Product (GDP) reached ¥114 trillion ($18 trillion in USD), according to the National Bureau of Statistics. The country’s economy outperformed government targets of 6% growth, with the overall economy growing by 8.1%.

Let’s take a look at what powers China’s modern economy.

Breaking Down China’s Economy By Sector

Sector2021 Total GDP
(Yuan)
2021 Total GDP
(USD)
% Share
Industry¥37.3T$5.9T32.6%
Wholesale and Retail Trades¥10.5T$1.7T9.2%
Finance¥9.1T$1.4T8.0%
Farming, Forestry, Animal Husbandry, and Fishery¥8.7T$1.4T7.6%
Construction¥8.0T$1.3T7.0%
Real Estate¥7.8T$1.2T6.9%
Transport, Storage, and Post¥4.7T$0.7T4.1%
Information Transmission, Software and IT Services¥4.4T$0.7T3.9%
Renting & Leasing Activities and Business Services¥3.5T$0.6T3.1%
Accommodation and Restaurants¥1.8T$0.3T1.6%
Others¥18.1T$2.8T15.9%
Total¥114T¥18T100.0%

Industrial production—activity in the manufacturing, mining, and utilities sectors—is by far the leading driver of China’s economy. In 2021, the sector generated ¥37.3 trillion, or one-third of the country’s total economic activity.

Despite a slowdown in December, wholesale and retail trades also performed strongly in 2021. As the main gauge of consumption, it was affected by lockdown measures and the spread of the COVID-19 Omicron variant towards the end of the year, but still rose by double digits, reaching a total of ¥10.5 trillion*.

“Other services”, which includes everything from scientific research and development to education and social services, generated 16% of China’s total economy in 2021, or ¥18.1 trillion.

*Editor’s note: At time of publishing, China’s government seems to have since adjusted this number to ¥11.0 trillion, which is not consistent with the original data set provided, but worth noting.

Where is China’s GDP Headed?

China’s economy recovered noticeably faster than most major economies last year, and as the overall trend below shows, the country has grown consistently in the years prior.

Visualizing China's GDP Growth

Before the pandemic hit, China’s quarterly GDP growth had been quite stable at just above 5%.

After the initial onset of COVID-19, the country’s economy faltered, mirroring economies around the globe. But after a strong recovery into 2021, resurging cases caused a new series of crackdowns on the private sector, slowing down GDP growth considerably.

With the slowdown continuing into early 2022, China’s economic horizon still looks uncertain. The lockdown in Shanghai is expected to continue all the way to June 1st, and over recent months there have been hundreds of ships stuck outside of Shanghai’s port as a part of ongoing supply chain challenges.

China’s Zero-COVID Policy: Good or Bad for the Economy?

While every country reacted to the COVID-19 pandemic differently, China adopted a zero-COVID policy of strict lockdowns to control cases and outbreaks.

For most of 2021, the policy didn’t deter GDP growth. Despite some major cities fully or partially locked down to control regional outbreaks, the country’s economy still paced well ahead of many other major economies.

But the policy faced a challenge with the emergence of the Omicron variant. Despite lockdowns and an 88% vaccination rate nationally, seven out of China’s 31 provinces and all of the biggest cities have reported Omicron cases.

And China’s zero-COVID policy has not affected all sectors equally. Industrial production rose by more than 10% in the first 11 months of 2021, despite city lockdowns around the country. That’s because many factories in China are in suburban industrial parks outside the cities, and employees often live nearby.

But many sectors like hotels and restaurants have been more severely affected by city lockdowns. Many global economies are starting to transition to living with COVID, with China remaining as one of the last countries to follow a zero-COVID policy. Does that ensure the country’s economy will continue to slow in 2022, or will China manage to recover and maintain one of the world’s fastest growing economies?

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Satellite Maps: Shanghai’s Supply Chain Standstill

China’s lockdown of Shanghai is causing massive back-ups at the world’s largest container port. Hundreds of ships are now waiting at sea.

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Satellite Maps: Shanghai’s Supply Chain Standstill

China has mandated a strict “zero COVID” policy since the onset of the global pandemic, which has led to tight lockdowns across the country whenever cases have started to spike.

Recently, lockdown restrictions have been enacted in major cities like Shenzhen and Shanghai, as China deals with one of its worst outbreaks since Wuhan in December 2019.

These cautionary measures have had far-reaching impacts on China’s economy, especially on its supply chain and logistics operations. Shanghai’s port system, which handles about one-fifth of China’s export containers, is currently experiencing significant delays as a result of the recent government lockdown.

Chart showing Shanghai port shipment volume falling after lockdowns

Shipping volume has dipped drastically since early March this year, right after partial lockdowns began in Shanghai. By the end of March, as restrictions continued to tighten up, shipping activity dipped nearly 30% compared to pre-lockdown levels. And while activity has recently picked up, it’s still far below average shipment volumes prior to the recent lockdown.

While the port is still technically operating, shipping delays will likely cause hiccups in the global supply chain. That’s because the Shanghai port is a major hub for international trade, and one of the largest and busiest container ports in the world.

How Bad is the Back-Up?

Here’s a closer look at satellite imagery that was captured by the Sentinel-1 satellite, which shows the current congestion at Shanghai’s port as of April 14, 2022. In the image, a majority of the white dots are cargo ships, many of which have been stuck in limbo for days.

Shanghai port traffic explainer 2022

Traffic has been building up at the Shanghai terminal. As of April 19, 2022, over 470 ships are still waiting to deliver goods to China. If you’d like to check out the Shanghai ports most up-to-date traffic, this live map by MarineTraffice provides real-time updates.

The number of container vessels waiting outside of Chinese ports today is 195% higher than it was in February. – Windward

Much of these delays are due to transport issues—an estimated 90% of trucks that support import and export activities are currently offline, which is causing dwell time for containers at Shanghai marine terminals to increase drastically.

Wait times for at Shanghai marine terminals has increased nearly 75% since the lockdowns began. Delays at the Shanghai terminal have sent ships to neighboring ports in Ningbo and Yangshan, but those ports are beginning to get congested as well.

The global impacts of this current bottleneck are still pending, and depend greatly on the length of Shanghai’s lockdown. According to an article in Freight Waves, this could turn into the biggest supply chain issue since the start of the pandemic if China’s marine shipping congestion isn’t cleared up soon.

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