China will continue to be Latin America’s main trading partner after the pandemic, according to a Coface report, which indicates that Latin American exports to the Asian giant are strongly concentrated in agri-food products in Argentina and Ecuador, metals in Chile and Peru, and the energy in Colombia.
The firm specialized in commercial credit insurance explained that commercial relations between the different regions have expanded considerably in the last two decades, gradually distancing themselves from relations between the United States and Latin America.
The reasons behind this sustained trend range from the difference in growth rates observed in the world’s two largest economies to the trade policies implemented by the governments of the United States and China in recent years.
Looking ahead, and considering the six largest economies in Latin America as a group, Coface indicated that the growth rates of foreign sales in these countries should exceed the expansion of domestic demand.
Indeed, the rebound in activity in the region should be less than the global recovery average and, more specifically, less than the recoveries in China and the United States. Therefore, sales to China and the US “should see a brilliant performance in 2021.”
The importance of goods exports in the economy of each country differs among the six Latin American countries selected in the study. Thus, in 2020, Chile registered the highest share of exports in GDP, followed by Peru, Ecuador, Brazil, Argentina and Colombia.