Recent economic trends in China and their implications for trade with Latin America and the Caribbean

Among the East and Southeast Asian economies often regarded as the most successful showcases, the People's Republic of China (PRC); occupies an outstanding place. This economy has one of the fastest growing GNPs in the world, and its outward orientation in the post-Mao Zedong era has made the country a significant world trade partner, so that the question of whether or not the economy stays on its sustained growth path will affect the welfare of the world economy in its entirety, including Latin America. The deepening of the ongoing economic reforms, coupled with prudent macro policies, should insure that the PRC's economy does indeed stay on course in its sustained, yet gradual, transformation process. Despite the already eminent position that the country occupies on the present world scene and its high growth prospects, present economic ties between the PRC and Latin America are marginal: mutual trade flows and reciprocal investments remain at an extremely low level. Nonetheless, the profound economic transformations taking place in both regions, which are growing and structurally reforming, are conducive to opening up wide trade and investment opportunities. At the same time, the stop-and-go cycles which frequently occur in the Chinese economy are likely to produce important bottlenecks and shortages in industrial and agricultural production and result in large annual fluctuations in import demand. To take full advantage of these opportunities, it is important for Latin America to be aware of the implications that these reforms might have on future trade and investment possibilities.