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China is becoming a major trade partner with many Latin American countries. China’s main interest in the region include natural resources such as oil, iron ore and agricultural commodities such as soya beans. Latin American countries’ trade with China increased tenfold in the period 2000-2007. However the U.S. is still the largest trade partner with Latin America. China’s trade in Latin America accounted for just one-fifth of that of the U.S in 2008. Currently, China´s major trading partners in the region are Brazil, Mexico, Chile, Argentina and Peru.

The chart below shows total trade of Mexico, Brazil and Chile with China:

Click to enlarge:

Total trade from Brazil, Chile and Mexico to China has increased for many years now and continues to move up.

The chart below shows the total trade of Brazil, Chile and Mexico with U.S.

Click to enlarge:

Total trade of the three Latin American countries with the U.S. has decreased in the period shown and the trend is downward sloping. It must be noted however, Mexico’s trade with the U.S. is still very large, representing 65% of all trade.

From an investment strategy perspective, one way to gain from China’s economic growth is to invest in some of the miners and agricultural producers in Latin America.

Source: Who Influences Latin American Stock Market Returns? China versus USA, International Research Journal of Finance and Economics

Disclosure: None

Source: Latin America: Trade With China Grows