Abstract

WISE, Carol. The China Conundrum: Economic Development Strategies Embraced by Small States in South America. colomb.int. [online]. 2012, n.75, pp.131-170. ISSN 0121-5612.

The three most prominent trends in South America in the 2000s have been: 1) the rapid expansion of trade and borrowing ties with China; 2) the collapse of both regional and multilateral trade negotiating venues since 2006; and, 3) the quick recovery of most South American countries from the 2008-10 global financial crisis. This paper analyzes the ways in which these three trends have converged and shaped the choice of development strategy in Chile and Peru, which have the strongest trade ties with China in the entire Latin American region when measured as a percent of GDP. Indeed, both countries have sought to stake out their own paths by negotiating separate bilateral free trade agreements (FTAs) with China and the US. Yet, although making these respective policy choices may well represent the most viable way forward for small emerging market countries which have consolidated macroeconomic reforms and are prepared to take their economic strategy to the next level, the political implications of this development path have already become more complicated than expected.

Keywords : Bilateral Free Trade Agreements; Chinese Latin American trade; Peru and Chile trade agreements; US Free Trade Agreements.

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