Riding the Dragon: Argentina, Brazil and the Chinese Commodity Market

Latin America has abundant supplies of many highly demanded raw materials. The presence of these natural resources provides a great opportunity for the continent to become self reliant and, potentially, a major power in the world economy. With the rise of China’s economic power in the past two decades, there is now a substantial trading relationship between Latin America and China. This connection can be analyzed by looking at the MERCOSUR, focusing on its two leading economies, Brazil and Argentina. How is Latin America being affected by Chinese investment? The following article will examine the economic impact the rise of China has had on Latin America. To narrow the scope of analysis, this article will focus on how agricultural production and exports to China have changed in Brazil and Argentina since 1996. The production and sale of soy and beef of these South American nations can be traced to the increasing demand in China. The purpose of the article is to show how these new economic relationships are transforming agricultural sectors in Brazil and Argentina. An independent variable that may affect this relationship is the industrialization and globalization process the Chinese market is experiencing. With the new trading opportunities, Brazil and Argentina may now have the chance to develop their society and improve their political and economic performance.