MercoPress. South Atlantic News Agency

China's “positive” impact on Latinamerica

China's soaring economy has been “most positive” for Latinamerican exports even when some specific sectors have suffered, claims a paper from the World Bank released in Singapore.

in Singapore. The World Bank's chief economist Guillermo Perry admits that Mexican textiles and some electrical manufacturing related industries have been displaced, but the overall net impact of China "is most positive", particularly for the Southern Cone and secondly the Andean countries.

Perry points out that commodity' prices, "from copper to soybeans and even oil" have soared because China and other countries such as India have become great consumers of commodities.

Although the economist did not quantify the benefit to Latinamerica of China's performance he did indicate that the impact on commodities prices is similar to that of the US economy growth.

He described as an "equilibrium factor", the fact that Latinamerica does no longer depend so much on the US economy. And even for Mexico and Central America the final impact is positive.

"Actually Mexico now imports cheaper inputs from China such as machinery which has enabled the country to increase its competitiveness", argues Pamela Cox, World Bank's representative for the area.

Cox went on to say that Latinamerica could even benefit with manufacturing exports for which it's important the region targets "qualified labour and a greater technological content". But this means improving education, qualifying labour and innovation spirit from entrepreneurs.

World Bank economists also demolished the myth that China was diverting foreign investment from Latinamerica showing that only in 2005 the region attracted 75 billion US dollars, according to the latest figures from The Economist Intelligence Unit.

However Latinamerican countries have some lessons to learn from Asia, basically huge investments in education and infrastructure; similarly with the more "stable" macroeconomic policies, low indebtness and greater fiscal margin shown by Asian countries.

Cox also indicated that recent elections in the region have shown a greater concern with poverty, inequality and participation in the economy, which means "more even opportunities" are needed in Latinamerican countries with larger investments in "all segments of people" and greater inclusion.