Yes, I am obsessed with charts. And if you’re still reading this blog with any regularity, you are too. Especially if they’re about China Latin America trade.
I finally had a chance to dig through a BBVA report from last month entitled, “How dependent is Latin America’s Economy on China?” Following are the essential takeaways.
- Commodities have always taken a significant share of Latin American exports; the level of commodity exports concentration had been declining until the start of this century, which coincides with the further involvement of China in global markets.
- The shift of China’s economic model makes it the biggest contributor to world commodity demand and the top importer of Latin America’s natural resources.
- There is a positive China effect on commodity exports concentration; the dependency on Chinese demand for sample commodities has indeed increased during the last decade.
- However, Latin American countries’ economic growth is far less dependent on China than the commodity exports figures might imply.
Now with those overview bullets out of the way, the first chart that strikes me is shown a few different ways but all with the same conclusion. This is one of the versions, demonstrating the proportion of each country’s exports that are commodities:
Posted in Americas, Argentina, Brazil, Chile, China, Colombia, Mexico, Natural Resources, Peru, Trade, Venezuela
Tagged FDI, Oil and Gas
This is interesting:
And here’s an explanation of what we’re looking at:
Posted in Brazil, Bulgaria, Chile, China, Colombia, Croatia, Czech Republic, Ecuador, Egypt, Features, Hungary, Indonesia, Kenya, Latvia, Lithuania, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Romania, Russia, Saudi Arabia, Slovakia, South Africa, South Korea, Sri Lanka, Taiwan, Thailand, Turkey, UAE, Ukraine, Venezuela
Tagged capital controls, Emerging Markets, FX / Interest rates, Inflation, Risk
What I’m about to put here has gone through many evolutions. The latest came out in the form of a Seeking Alpha article which I just had published the other day under the headline, “A Preliminary Case For Chile Over Mexico
For a couple of weeks now I’ve been looking at the merits of either buying the Chile ETF (ticker: ECH), shorting the Mexico ETF (ticker: EWW) or both. And by the way things have been looking recently, not only do my instincts look about right, but I may have even missed the boat. For those who have been watching the elections in Italy, the fallout for the euro has been pretty hard, on the order of 300 bps in Monday alone. So what does this have to do with Latin America? Well, a lot, actually. I initially wrote about this back in June last year for Seeking Alpha here, and apparently my thesis still holds.
The storyline as I see it is pretty simple.
From the Hindu Business Line
Though this comes from a story headlined, “Rupee depreciation erodes carry trade returns”, it’s interesting (though perhaps not surprising) to note that Asia is nowhere in this table.
As part of the Atlantic Monthly’s sporadic coverage
of developing markets, it recently proposed
Turkey, Indonesia, Kazakhstan, the DRC and Mexico (with Nigeria as the sixth man coming off the bench) as the next 5 emerging economies to “change the world.” And because I hate websites that force you to click through a different page per item of a list, presumably just to keep you clicking, I am summarizing it all on one page here to make for easier digestion.
Directly from the intro:
“Now that we understand the global hierarchy to be less fixed than it once was, who will rise next? The conditions for a rising power are so complicated and so reliant on outside factors beyond any one country’s control that accurately predicting them would be impossible. Still, some countries seem better positioned and better managed than others.”
Posted in Chile, Colombia, DRC, Features, Indonesia, Kazakhstan, Malaysia, Mexico, Nigeria, Peru
Tagged Emerging Markets, Frontier Markets