What do the economies of Latin America and China have in common? They are both extremely interdependent on the other for growth.
China purchases a significant percentage of raw materials from Latin America, which are used in the manufacturing of goods. Many of those goods are then sold back to Latin America. This cycle has increased over the last decade, as China’s trade with the region has surged more than 20-fold since 2000. So while they are competitors, they also are trade partners. It’s a slice of globalization that is representative of the larger world.
China and Latin America’s relationship becomes even more intriguing when you consider the geo-political environments of both regions. What is the impact of Brazil’s elections on its trade partnership? Populist rhetoric to keep jobs local and not to be so dependent on China is appealing to many, but what happens to the region’s economy if trade with China decreases? Further, how do the corruption investigations in China impact trade? If China’s GDP is affected, it could mean the country is buying fewer natural resources from Latin America.
To gain a better understanding of this relationship and its implications, MIT Sloan is hosting its first Latin America-China Conference in Sao Paolo, Brazil on Aug. 28-29. The event, which will be available for free worldwide via live streaming, features MIT faculty, business leaders and policy advisors who will discuss the economic future of Sino-Latin American relations.
The conference will begin by focusing on micro and macroeconomic issues. MIT Sloan Prof. Roberto Rigobon will lead a panel discussion on the Latin American economies, including topics such as uncertainty in emerging economies, the risks of deflation in advanced ones, and fluctuating commodities prices. He’ll be joined by panelists Ilan Goldfajn, chief economist at Itaú Unibanco Bank in Brazil, and Alejandro Werner, director of the Western Hemisphere Department of the International Monetary Fund.
Then MIT Sloan Prof. Yasheng Huang will lead a session on growth prospects in China. Along with faculty from Fudan University, Tsinghua University and Sun Yat-Sen University, they’ll discuss the slowing growth and lending rates with Jian Gao, the former vice governor of the China Development Bank.
In the second half, we’ll move from a theoretical conversation to practical issues. MIT Sloan faculty will lead roundtable discussions on what the micro and macroeconomic theory means in the real world. They’ll discuss the impact of energy supply and demand, sustainability, the commodities crisis, issues around emerging markets and more.
The final panel, which includes MIT Sloan Prof. Donald Lessard, Enrique Ostalé, executive vice president, president and CEO of Walmart Latin America, Charles Tang, president of the Brazil-China Chamber of Commerce & Industry, and Fernando Reyes Matta, director of the Center for Latin American Studies on China at the Universidad Andres Bello, will compare doing business in Latin America and China. They’ll examine the dynamic of being trade partners and competitors in the global marketplace and the impact of how each does business internally and externally on future growth.
By gathering these thought leaders and making the conference available around the world, we hope to improve the understanding between and about these regions by examining issues that don’t always make the headlines. What happens here has global implications and everyone will benefit from a better comprehension of the dynamics at play.
Stuart Krusell is director of MIT Sloan’s Office of International Programs and an organizer of the Latin America-China Conference.