A CHINA IN LATIN AMERICA

ENVIRONMENT AND DEVELOPMENT DIMENSIONS

Abstract

China’s rise as an important market partner for Latin America and the Caribbean (LAC) brings to the forefront the importance of environmental and social safeguards in the region. China is now the most important export destination for South America, and the second destination of Latin America overall. But China’s demand is heavily concentrated in just a few primary commodities: over two-thirds of LAC-China exports since 2009 were in just five categories: iron, oilseeds, copper (refined and unrefined), and crude petroleum. This concentration in commodities means that the LAC exports to China are much more environmentally intensive and prone to social conflicts than other LAC exports. On average, LAC exports to China generate about 15% more net greenhouse gas emissions, use about twice as much water, and support fewer jobs than other LAC exports, per million dollars of export revenue. In this context, it is extremely important for LAC governments and civil society groups to enforce and bolster their environmental and social safeguards. Fortunately, LAC has significant market power in the raw commodities it exports to China. So the region has room to prioritize the environmental and social protections around mining, or deforestation enforcement around soy production, without risk of losing China altogether in these items.