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Identifying the Linkages between Major Mining Commodity Prices and China’s Economic Growth—Implications for Latin America

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  • Mr. Yongzhen Yu

Abstract

Major mining commodity prices are inherently volatile and cyclical. High levels of investment in China have been a key driver in the strong world demand for minerals and metals over the past decade. The urbanization and industrialization of China has been an important factor behind the increase in domestic demand and high investment growth, while its export sector is also an important source of growth and plays a critical role as a catalyst. Activity in infrastructure, construction, real estate, and automobile manufacturing all contribute to the strong demand for minerals. Over the next five years, the Chinese demand is expected to remain strong, supported by investment and gradually rising consumption rates. However, in the second part of this decade economic growth in China could slow down. For Latin American countries, export receipts should remain strong over the next five years and beyond, given the continued strong demand from China.

Suggested Citation

  • Mr. Yongzhen Yu, 2011. "Identifying the Linkages between Major Mining Commodity Prices and China’s Economic Growth—Implications for Latin America," IMF Working Papers 2011/086, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2011/086
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    1. Punam Chuhan-Pole & Francisco H.G. Ferreira & Cesar Calderon & Luc Christiaensen & David Evans & Gerard Kambou & Sebastien Boreux & Vijdan Korman & Megumi Kubota & Mapi Buitano, "undated". "Africa's Pulse, April 2015," World Bank Publications - Reports 21736, The World Bank Group.
    2. Jaroslava Durčáková & Ondřej Šíma, 2013. "BRICS: Exchange Rate policy in Context of Internal and External Equilibrium [BRICS: Kurzová politika Brazílie v kontextu vnitřní a vnější rovnováhy]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2013(4), pages 7-29.
    3. Ludovic Gauvin & Cyril C. Rebillard, 2018. "Towards recoupling? Assessing the global impact of a Chinese hard landing through trade and commodity price channels," The World Economy, Wiley Blackwell, vol. 41(12), pages 3379-3415, December.
    4. Schellekens, Philip, 2013. "A Changing China: Implications for Developing Countries," World Bank - Economic Premise, The World Bank, issue 118, pages 1-9, May.
    5. Gauvin, Ludovic & Rebillard, Cyril, 2013. "Towards Recoupling? Assessing the Impact of a Chinese Hard Landing on Commodity Exporters: Results from Conditional Forecast in a GVAR Model," MPRA Paper 65457, University Library of Munich, Germany.
    6. Mark Kruger & Kun Mo & Benjamin Sawatzky, 2016. "The Evolution of the Chinese Housing Market and Its Impact on Base Metal Prices," Discussion Papers 16-7, Bank of Canada.
    7. Yufeng CHEN & Shuo YANG, 2022. "How Does the Reform in Pricing Mechanism Affect the World’s Iron Ore Price: A Time-Varying Parameter SVAR Model," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 83-103, April.
    8. Andersen, Thomas Barnebeck & Barslund, Mikkel & Hansen, Casper Worm & Harr, Thomas & Jensen, Peter Sandholt, 2014. "How much did China's WTO accession increase economic growth in resource-rich countries?," China Economic Review, Elsevier, vol. 30(C), pages 16-26.
    9. José Luis Nolazco & Patricia Lengua-Lafosse & Nikita Céspedes Reynaga, 2020. "Contribución de los choques externos en el crecimiento económico del Perú: un modelo semi-estructural," Capítulos de libros, in: Nikita Céspedes Reynaga & Norman V. Loayza & Nelson R. Ramírez Rondán (ed.), Crecimiento económico en el Perú: causas y consecuencias, edition 1, volume 1, chapter 3, pages 74-117, Universidad de San Martín de Porres.
    10. Mr. Paulo Drummond & Miss Estelle X Liu, 2013. "Africa’s Rising Exposure to China: How Large Are Spillovers Through Trade?," IMF Working Papers 2013/250, International Monetary Fund.
    11. Álvarez, Roberto & García-Marín, Álvaro & Ilabaca, Sebastián, 2021. "Commodity price shocks and poverty reduction in Chile," Resources Policy, Elsevier, vol. 70(C).
    12. -, 2011. "Economic Survey of Latin America and the Caribbean 2010-2011: Internacional integration and macroeconomic policy challenges amid global economic turmoil," Estudio Económico de América Latina y el Caribe, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1075 edited by Eclac, September.
    13. Paulo Drummond & Estelle Liu, 2015. "Africa’s Rising Exposure to China: How Large Are Spillovers Through Trade?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 21(3), pages 317-334, August.
    14. Vianna, Andre C., 2016. "The impact of exports to China on Latin American growth," Journal of Asian Economics, Elsevier, vol. 47(C), pages 58-66.
    15. Philip Schellekens, 2013. "A Changing China : Implications for Developing Countries," World Bank Publications - Reports 16115, The World Bank Group.
    16. Bielschowsky, Ricardo & da Rocha, Felipe Freitas, 2018. "China’s quest for natural resources in Latin America," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    17. Mr. Shaun K. Roache, 2012. "China's Impacton World Commodity Markets," IMF Working Papers 2012/115, International Monetary Fund.

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