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China And Deindustrialization In Latin America

Author

Listed:
  • Rafael Queiroz Pinheiro
  • Alexandre Jose Germano De Abreu

Abstract

This paper analyzes the process of deindustrialization in Latin America and the impact of China on this process. After discussing the main theoretical explanations for premature deindustrialization and presenting some empirical data on the process of deindustrialization in Latin America, this paper undertakes a novel panel data analysis to provide greater clarification on the role of China in the early deindustrialization process of Latin American countries. The findings suggest that the import of manufactured goods from China does not have a significant effect on manufacturing employment and is in fact associated with an increase, not a decrease, in the share of manufacturing value added. On the other hand, exports to China are negatively associated in this sample with the share of both manufacturing employment and manufacturing value added. This supports the view that trade with China may be a part of the explanation for deindustrialization, not through competition from Chinese manufacturers but rather through the impact on the competitiveness of primary exports and exchange rate appreciation, and that that one of the most relevant factors for deindustrialization in Latin America is related to the Dutch disease.

Suggested Citation

  • Rafael Queiroz Pinheiro & Alexandre Jose Germano De Abreu, 2025. "China And Deindustrialization In Latin America," Working Papers REM 2025/0367, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    • Handle: RePEc:ise:remwps:wp03672025
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    File URL: https://rem.rc.iseg.ulisboa.pt/wps/pdf/REM_WP_0367_2025.pdf
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    References listed on IDEAS

    as
    1. Fiona Tregenna, 2009. "Characterising deindustrialisation: An analysis of changes in manufacturing employment and output internationally," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 33(3), pages 433-466, May.
    2. Prebisch, Raúl, 1949. "O Desenvolvimento Econômico da América Latina e seus Principais Problemas," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 3(3), July.
    3. repec:fgv:epgrbe:v:3:n:3:a:4 is not listed on IDEAS
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    More about this item

    Keywords

    Industrialization; Deindustrialization; International Trade; South-South Cooperation; Economic complexity.;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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