Lederman, Daniel; Olarreaga, Marcelo; Perry, Guillermo E.
Description:
China's and India's fast
economic growth since 1990 is paralleled only by their
growing presence in policy discussions throughout the Latin
America and the Caribbean (LAC) region. The success of these
Asian countries is looked upon with admiration, but there is
also concern about the effects that growing Chinese and
Indian exports may have on the manufacturing and service
sectors throughout LAC. Blame for the private sector's
poor performance in some LAC countries often falls on the
growing presence of China, and to a lesser extent India, in
world markets. The rest of this introduction is organized as
follows: the next section summarizes the evidence on the
positive aggregate effects of China's and India's
growth in world trade markets, foreign direct investment
(FDI) flows, and innovation activities on LAC economies, and
is followed by a section presenting evidence on the effects
of China's and India's growth within industries,
concluding that negative effects are limited to certain
manufacturing and service sectors, in particular in Mexico
and to a lesser extent in Central America and the Caribbean.
Next is a section that summarizes evidence of the effects of
China's and India's growth on specialization
patterns and factor adjustments, and actual and potential
policy responses by LAC governments. The final section
summarizes policy implications.