{"id":2042519,"date":"2023-09-23T15:02:02","date_gmt":"2023-09-23T19:02:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/chinas-economic-downfall-spells-trouble-for-latin-america-opportunity-for-us\/"},"modified":"2023-09-23T15:06:31","modified_gmt":"2023-09-23T19:06:31","slug":"chinas-economic-downfall-spells-trouble-for-latin-america-opportunity-for-us","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/chinas-economic-downfall-spells-trouble-for-latin-america-opportunity-for-us\/","title":{"rendered":"China&#8217;s economic decline poses risks for Latin America, but opens doors for the US."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">28<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fchinas-economic-downfall-spells-trouble-for-latin-america-opportunity-for-us%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2042519&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><h2>China&#8217;s Economic Woes: A Wake-Up Call for the World<\/h2>\n<p>Deepening\u2062 economic woes in China are something the communist regime can no longer dismiss, and dependent countries can&#8217;t afford to ignore.<\/p>\n<p>Since China&#8217;s decision to end \u2063its &#8220;zero COVID&#8221; policy was announced \u200dlast December, the subsequent economic downturn\u2062 has hit\u2062 multiple sectors. Import and export markets have slumped this year, coupled with the country&#8217;s soaring debt, underperforming industrial output, and a tanking real estate market.<\/p>\n<blockquote>\n<p>July data showed a significant year-on-year <a href=\"https:\/\/www.china-briefing.com\/news\/chinas-july-2023-economic-data\/#:~:text=Meanwhile%2C%20China's%20imports%20also%20dropped,%2470.6%20billion%20registered%20in%20June.\" target=\"_blank\" rel=\"noopener\">drop<\/a> in foreign \u2063trade, with exports shrinking 14.5 percent and imports falling 12.4 percent.<\/p>\n<\/blockquote>\n<h2>Related Stories<\/h2>\n<ul>\n<li>\n<h3><a href=\"http:\/\/www.theepochtimes.com\/opinion\/chinas-economy-stumbles-from-bad-to-worse-5493128?ea_src=author_manual&#038;ea_med=related_stories\">China&#8217;s Economy Stumbles From \u2062Bad \u2064to Worse<\/a><\/h3>\n<p>9\/17\/2023<\/p>\n<\/li>\n<li>\n<h3><a href=\"http:\/\/www.theepochtimes.com\/china\/analysis-top-4-foreign-investors-concerns-on-chinas-economy-5488248?ea_src=author_manual&#038;ea_med=related_stories\">ANALYSIS: Top 4 Foreign Investors\u2019 Concerns on China&#8217;s Economy<\/a><\/h3>\n<p>9\/8\/2023<\/p>\n<\/li>\n<\/ul>\n<p>This is <a href=\"https:\/\/www.piie.com\/blogs\/realtime-economics\/how-serious-chinas-economic-slowdown\" target=\"_blank\" rel=\"noopener\">complicated<\/a> by a shrinking labor\u200b force and <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/china-banks-may-face-350-billion-in-losses-from-property-crisis\/\" title=\"China Banks May Face 0 Billion in Losses From Property Crisis\">high youth unemployment<\/a>. The number of young people unable to find \u200djobs \u2063hit a <a href=\"https:\/\/www.statista.com\/statistics\/1244339\/surveyed-monthly-youth-unemployment-rate-in-china\/\" target=\"_blank\" rel=\"noopener\">record<\/a> high of 20.4 percent in April among the 16- to 24-year-old age group\u2014spiking to 21.3 percent in June.<\/p>\n<p>China&#8217;s National Bureau of Statistics originally released the data, but the state-run agency has since blocked additional unemployment statistics after widespread media reports.<\/p>\n<p>A spokesperson for the Bureau of Statistics, Fu Linghui, told reporters during an August press conference that &#8220;<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/chinas-economic-downfall-spells-trouble-for-latin-america-opportunity-for-us\/\" title=\"China's economic decline poses risks for Latin America, but opens doors for the US.\">age-specific urban unemployment rate<\/a> for young people&#8221; would be \u2063suspended for that month. Given the \u200bincreased pressure the Chinese \u200bCommunist Party (CCP) faces over the faltering economy, state-level attempts to control the narrative aren&#8217;t surprising.<\/p>\n<p>Some say China&#8217;s economic slowdown was &#8220;inevitable.&#8221;<\/p>\n<blockquote>\n<p>An August <a href=\"https:\/\/www.cfr.org\/article\/chinas-homegrown-crisis\" target=\"_blank\" rel=\"noopener\">report<\/a> by New York-based Council on Foreign \u200dRelations noted, &#8220;Moving hundreds \u200bof millions of people from inefficient rural agriculture to higher-productivity factory work in cities can only be carried \u200dout once.&#8221;<\/p>\n<\/blockquote>\n<figure style=\"width:600px\" class=\"alignnone\"><figcaption>A view of a complex of unfinished apartment buildings in Xinzheng City in Zhengzhou, central Henan Province, China, on June 20, 2023. (PEDRO PARDO\/AFP via Getty Images)<\/figcaption><\/figure>\n<p>But the ripples of Beijing&#8217;s economic downturn will reach far beyond its borders. Many experts are predicting China&#8217;s partners in the developing world, particularly\u2062 Latin America, will bear the brunt of its\u2062 domestic \u200dtroubles.<\/p>\n<blockquote>\n<p>Beijing&#8217;s interests in Latin America are sizeable. Between 2000 and 2020, Chinese companies <a href=\"https:\/\/www.fdiintelligence.com\/content\/feature\/chinas-growing-footprint-in-latin-america-82014\" target=\"_blank\" rel=\"noopener\">invested<\/a> roughly $160 billion in the \u200cregion.<\/p>\n<\/blockquote>\n<p>The past 20 years of Latin America&#8217;s engagement with China have been based on &#8220;perceptions and hopes&#8221; rather than practicalities, said Evan Ellis, a regional analyst and professor at the U.S. Army War College Strategic Studies Institute.<\/p>\n<p>Reflections of this are evident in Latin America&#8217;s dubious infrastructure projects and grandiose loans given to local \u2062governments with \u2063a history of defaulting on their debts.<\/p>\n<blockquote>\n<p>In \u200ba recent\u200c example, Argentina&#8217;s \u2063embattled leftist regime used a $7.5 billion line of credit\u200b from the International Monetary Fund to\u2064 partly repay a Chinese loan in August. Argentina has a decades-long history of \u200bforeign debt defaults and, as of 2019, owed Beijing nearly $17 billion from loans issued as far back as 2007, <a href=\"https:\/\/www.thedialogue.org\/map_list\/\" target=\"_blank\" rel=\"noopener\">according<\/a> to the Inter-American Dialogue.<\/p>\n<\/blockquote>\n<p>China&#8217;s\u2064 infrastructure projects in Latin America are famously riddled with problems, some of which significantly impact local populations. This is true of the $2.7 billion Coca Codo Sinclair hydroelectric dam in Ecuador, which opened in \u20622016 and already local engineers are voicing \u2064concerns over cracks and structural issues.<\/p>\n<p>Latin American governments hungry for\u200d investment\u2064 and trade deals have historically \u2063turned a blind eye to\u2064 these realities because of the size of\u200d China&#8217;s checkbook. However, given Beijing&#8217;s \u200dcurrent domestic\u200c troubles, those checks could start getting\u200c smaller and \u200ccome with more conditions, Mr. Ellis told The Epoch Times.<\/p>\n<h2>Commodities Impact<\/h2>\n<p>One of the near-term effects the region faces \u200bis cooling commodity prices due\u2063 to\u2063 falling demand from China, the region&#8217;s biggest trade partner, aside from Mexico.<\/p>\n<blockquote>\n<p>In countries such as Brazil, Chile, and\u2064 Peru, commodities represent \u206372 percent of total exports, <a href=\"https:\/\/www.iif.com\/Research\/Latin-America\" target=\"_blank\" rel=\"noopener\">according<\/a> \u2062to the Institute of International Finance. By \u200bcomparison, \u200bAfrica&#8217;s commodities exports total 62 percent, the Middle East&#8217;s total 51 percent, and Asia&#8217;s total 25 percent.<\/p>\n<\/blockquote>\n<p>This is especially problematic\u200c for the countries with strong mineral and agricultural sectors, which rely heavily on Chinese demand.<\/p>\n<blockquote>\n<p>The Inter-American Development\u200d Bank has <a href=\"https:\/\/www.iadb.org\/en\/news\/sharp-slowdown-recorded-exports-latin-america-and-caribbean-idb-study-finds#:~:text=Export%20prices,and%20soybeans%20(%2D5.2%25).\" target=\"_blank\" rel=\"noopener\">reported<\/a> price drops \u200bbetween January and \u200dApril on key Latin American commodities, including oil, coffee, iron \u200dore, copper, and soybeans.<\/p>\n<\/blockquote>\n<p>Mr. Ellis\u2064 predicts\u200c a \u201cprotracted period of lower commodity prices&#8221; that will hit Latin American countries \u200chard since China\u200d will likely be buying less and trying to sell more. He said\u200c the CCP likely won&#8217;t have \u201cquite as \u2063much money to throw into the region as\u200d it once did.\u201d<\/p>\n<p>Consequently, \u200cthis could dim some of the reputational luster China\u2062 has spent years\u2063 building. \u201cAcross the board, China is not going to look quite as glamorous to Latin America as it used to,&#8221; Mr. Ellis said.<\/p>\n<p>Senior emerging markets economist Robert Gilhooly noted, &#8220;Commodity exporters, \u200csuch as Chile, Peru, South Africa, and Australia, could see less demand from China,&#8221; which he said would lead to a cooling trend in global prices and &#8220;knock-on effects impacting investment, tax revenues,\u200b and broader \u200bbusiness\u200c sentiment.\u201d<\/p>\n<p>Other analysts say cooling commodity prices are just the beginning.<\/p>\n<p>&#8220;One of the main \u200dreasons these [Latin American] regimes gravitated towards China is\u2063 because \u2063of the immediate practical benefits of that relationship &#8230; appealing loans, investments, military and security opportunities, and assorted forms \u2062of support,&#8221; regional security analyst\u2064 and president of Scarab Rising, Irina Tsukerman, told The Epoch\u2064 Times.<\/p>\n<figure style=\"width:600px\" class=\"alignnone\"><figcaption>Brazil&#8217;s President\u2063 Luiz Inacio Lula da Silva (L) talks to China&#8217;s Ambassador to Brazil Zhu Qingqiao at the Palacio do Planalto\u200b in\u2063 Brazil on Feb. 3, 2023. (SERGIO LIMA\/AFP via Getty \u200dImages)<\/figcaption><\/figure>\n<p>&#8220;Should they [Latin American governments] come to see China as an unreliable ally &#8230; without delivering\u200d on its promises, they will immediately turn\u2062 away \u200bin search\u200b of another suitor.&#8221;<\/p>\n<p>Ms. Tsukerman believes image factors heavily into China&#8217;s approach to engagement with Latin America. She&#8217;s not convinced the CCP will scale\u2064 back its regional investments, \u2064even at the \u200ccost of its own \u200beconomic crisis. Ms. \u200cTsukerman believes Beijing cares more about\u2062 &#8220;projecting power&#8221; than\u200b having \u2063what she called a &#8220;prudent \u200band sober balance of expenditures.&#8221;<\/p>\n<p>&#8220;In\u200c reality, there&#8217;s a perception in the ruling class that, so long as Beijing&#8217;s long arm \u200creaches far\u200d and wide around the world, rumors of\u200d its economic \u2063collapse will not be fully believed by Western countries,&#8221; she said.<\/p>\n<p>However, Beijing&#8217;s\u2062 continued investment in Latin America will likely come \u2062with what Mr. Ellis called a &#8220;hardening of China&#8217;s diplomatic\u2063 line.&#8221; He expects this to materialize \u2064with China&#8217;s loan terms, adding that the CCP is &#8220;very adept&#8221; at getting paid.<\/p>\n<p>&#8220;Like in Africa,\u2064 the Chinese \u2063are not letting anyone \u2062walk away from their debts,&#8221; Mr. Ellis said.<\/p>\n<p>He added the CCP will probably sharpen its \u200bapproach as a trade and investment partner while setting stricter terms and deepening its &#8220;politicization&#8221; in Latin America.<\/p>\n<p>Mr. Ellis said China will likely become a more difficult international partner, and bring\u2064 less cash to the table.<\/p>\n<h2>Opportunity Knocks<\/h2>\n<p>If more stringent trade and investment deals between China\u2064 and \u2063Latin America come to pass, it may also hamper CCP efforts to expand \u2064the RMB yuan as a reserve currency in the region. Earlier this year, the governments of\u2062 Brazil and Argentina announced they would begin\u2063 using the \u200dyuan \u2064as a trade currency. On June 29, Argentina&#8217;s government took it \u200da step further when its central bank <a href=\"https:\/\/www.theepochtimes.com\/world\/in-depth-argentina-starts-allowing-bank-accounts-in-chinese-yuan-but-locals-prefer-dollars-5392784\" target=\"_blank\" rel=\"noopener\">announced<\/a> residents and businesses would be able to open accounts in yuan.<\/p>\n<p>China hasn&#8217;t been coy in its\u200b desire to push the yuan as an alternative to the U.S. dollar for reserves and trade, which many have called a &#8220;de-dollarization&#8221; campaign.<\/p>\n<p>Yet, with Beijing&#8217;s economic retraction and more\u2063 complicated or less\u2064 access to funding, it may be an opportune time for the United States to step into the limelight in its own backyard. Ms. Tsukerman says the reality of \u200bChina&#8217;s changing economic status could ignite a \u2064change in attitude.<\/p>\n<p>&#8220;Despite leftist ideologies of Latin\u2062 American regimes such as Argentina and Brazil, their\u2063 leaders are pragmatic and self-interested. They may use populist rhetoric and extreme ideologies to get to power\u2062 and control, \u200cbut when it comes \u200bto guarding foreign policy and their own pockets, their eyes are wide open,&#8221; she said.<\/p>\n<div class=\"my-5\">\n<p>The United\u2064 States may\u200c have lost ground to China as a <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/trump-admin-sanctions-on-iran-decimated-regimes-global-trade-report-says\/\" title=\"Trump Admin Sanctions on Iran Decimated Regime\u2019s Global Trade, Report Says\">top trading partner<\/a> in recent years,\u200c but U.S. foreign\u200c direct investment in the region is still massive; \u200dlast year \u2064 <a href=\"https:\/\/www.cepal.org\/en\/pressreleases\/foreign-direct-investment-latin-america-and-caribbean-rose-552-2022-reaching-historic\" target=\"_blank\" rel=\"noopener\">representing<\/a> 38 percent of the nearly $225 billion economic infusion in Latin America\u200c and\u2062 the Caribbean.<\/p>\n<\/div>\n<p>Mr. Ellis says it&#8217;s\u200d up to Washington to differentiate itself as a trade partner in Latin America and capitalize on any economic fumbling on \u2064China&#8217;s part. If not, \u2062he remarked, it wouldn&#8217;t be the first time U.S. officials\u200d missed \u2062a golden opportunity.<\/p>\n<p>&#8220;I\u2019ve never been disappointed in our government&#8217;s ability to shoot itself in the foot.&#8221;<\/p>\n<p> <\/p>\n<h2> \u200c How will the\u2064 economic downturn in China affect ongoing \u2063infrastructure projects in Latin America\u200d and \u200cthe region&#8217;s economy as a \u2063whole?<\/h2>\n<p><span>  The local communities\u2064 and \u2062environment. For example,\u200b the\u2064 construction of the Nicaraguan Canal, a \u2064$50 billion project financed\u2062 by\u2064 China, has been met with protests due \u200bto\u2062 concerns about displacement of local\u2064 communities and negative environmental impacts. \u200cSimilarly, Chinese-built \u200bdams \u2062in Ecuador have caused significant damage to the Amazon \u200drainforest \u200cand indigenous\u200d communities.<\/p>\n<p>The economic downturn\u200c in China\u200d will\u200b exacerbate these issues in Latin America. \u200dAs China&#8217;s economy\u2064 weakens, it\u200c will have less capacity to continue investing \u2063in the region. This could lead to\u200d the suspension or cancellation\u2064 of ongoing projects, leaving many\u2063 Latin American countries with unfinished infrastructure\u2064 and a\u2063 lack of\u2062 funds to \u200dcomplete \u200cthem. Additionally, \u2062the economic slowdown in China\u200d will \u2064negatively impact the demand for Latin American commodities, such as soybeans, copper, and \u2064oil, further worsening their economic situation.<\/p>\n<p>The interdependence between\u200c China\u200c and \u2063the rest of the world \u2064means that \u2063the repercussions \u200dof\u2063 China&#8217;s economic \u2062woes will be felt globally. The world cannot afford to\u2062 ignore the warning signs coming\u200b from China. It\u200c is crucial that countries, especially those heavily reliant on\u200b Chinese investments and trade, diversify their economic partnerships\u2063 and reduce their \u2064dependence on China.\u200d This will require governments\u200b to implement \u2062policy reforms \u2062that promote\u200d innovation, investment in \u200cnew industries, and \u2063the development of \u2064domestic markets.<\/p>\n<p>Moreover, the \u2064international community must closely monitor \u2063China&#8217;s economic policies and practices. China&#8217;s approach to lending and investment in developing \u2063countries \u200dhas often been criticized for \u200bits lack of transparency and accountability. There have been instances where Chinese\u200c loans have\u200b resulted\u2062 in\u200d debt traps for vulnerable countries, leading to China exerting undue\u200c influence and control over their economies.\u200c By holding China accountable and promoting responsible lending practices, the \u200binternational community can prevent further economic instability and \u200dsafeguard the \u200cinterests of developing countries.<\/p>\n<p>China&#8217;s economic woes should serve as a wake-up call for the world. It is a \u2064reminder that economic growth cannot be sustained indefinitely, and that \u200coverreliance on a \u200csingle\u2062 country or sector can have far-reaching consequences. By diversifying their economies and\u2064 forging new partnerships, countries can\u2064 mitigate the risks posed by \u2064China&#8217;s economic instability. At \u2062the same\u200b time, policymakers and international organizations must work together\u2062 to ensure \u2063that \u2064China&#8217;s economic practices align\u2064 with global standards, promoting transparency, \u200dfairness, and long-term sustainability. Only\u2062 through collective action\u2064 can the world navigate the challenges presented \u200bby \u2062China&#8217;s\u200d economic downturn and build\u200d a more resilient and \u2064balanced global economy.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>China&#8217;s economic troubles can no longer be ignored by the communist regime or dependent nations. The end of China&#8217;s &#8220;zero COVID&#8221; policy has led to a significant economic downturn, impacting various sectors. Import and export markets have suffered, exacerbating the country&#8217;s already high debt.<\/p>\n","protected":false},"author":334,"featured_media":2042520,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2042519","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2042519","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/334"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2042519"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2042519\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2042520"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2042519"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2042519"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2042519"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}