Export Competition Between China And Latin America On American Market

Latin America, a significant power in today’s global emerging markets, has beenenjoying a rapid growth as China does ever since the beginning of the21st Century.However, this region is just the one holding the majority of nations which have not yetestablished diplomatic ties with China, and sadly, what was called the “China ThreatTheory” is widely held among people on this land, with certain prejudices claiming thatChina is crowding Latin America out in the U.S. market—the most significant commonmarket for both parties as, to a large extent, rivals.This thesis attempts to make a study upon the comparative advantages of bothparties and the cause for China’s getting an upper hand in the game. Statistical estimatesare adopted throughout the thesis for a closer look at the competitive intensity: the ICTindex, which is based on the export similarity, is employed for that amongst finishedproducts; while the CMS (Constant Market Share), as another key measure, is used inresearch for the “crowding-out effect” China is believed to have put upon its rivals.With researches in the thesis going on, it should also be made clear that in spite ofthe boosting competitiveness of China’s exports to the U.S. market, it has hardly beenposing upon Latin America any threat as big as alleged by some Western scholars: in thecase of the final products, Latin America has been undergoing much slighter pressuresfrom China since the end of the Global Financial Crisis, and there are even data showingthat China, sometimes, gets crowded out by some of its rivals from the continent.The thesis is wrapped up with a future perspective of the potentials for cooperationbetween China and Latin America. Since the GFC has offered Latin America anopportunity for an optimized export structure, its export is gaining an increasing share inthe global market, particularly in China. Therefore, as China’s total import from LatinAmerica is seeing a steady growth, the cooperation between the two parties are expectinga positive outlook.