The slowdown in China’s economy is taking its toll on its imports from the Americas, our trade data on China through third-quarter 2015 shows. China’s imports from North America dropped 9%, while its imports from South America were down 11% in September 2015 compared with September 2014. Chinese imports from Central America and the Caribbean plummeted 65% in September 2015 compared with the same month a year earlier.
Here’s a break-out of the data by country:
Much of the drop in Central American trade can be attributed to Costa Rica’s loss of Intel’s microprocessor manufacturing facility. In September 2014, electronic integrated circuits and micro assemblies accounted for $310,997,380 worth of China’s imports from Costa Rica, representing 83% of its total imports from the Central American country. By September 2015, imports of HS8542 were down to $13,600,174, representing an 18% share of a much smaller pie.
The downward trend is a worry for South American countries that have come to rely on China’s purchases of raw materials and commodities. China is the top export market by value for Brazil, Chile and Peru, and second-ranked export market for Uruguay and Colombia, based on our 2014 trade data on China.
The startling 77% fall-off in China’s imports from Colombia September 2014 versus September 2015 is mostly down to a 80% drop in the value of crude oil (HS2709) imports, which account for the lion’s share of China’s imports from Colombia (96% in September 2014, 88% in September 2015). Among China’s imports from Brazil, crude oil dropped 46% in value and iron ore (HS2601) fell 32% in September 2015 compared with September last year. These were the same trade commodities that led the sharp drop in China’s imports from Brazil in February 2015 – which you can see in the month-by-month trade data on China’s imports from the Americas from January 2014 through September 2015 here:
China is also investing less
Back in January, President Xi Jinping told the Community of Latin American and Caribbean States (CELAC) that China expected to see trade with Latin America reach $500 billion over the next decade. He also promised $250 billion in new investment in the region over the same period. [See Chinese Trade with Latin America Set to Climb.]
That would be good news for South American, where foreign direct investment (FDI) has been on the slide in recent years, with the exception of Chile:
Alas, there are indications that China is cutting back on investing as well as imports.
Citing data from fDi Markets, the Financial Times reports that Chinese companies were the investors in 286 greenfield projects worldwide, totaling $29.3 billion, in the first three quarters of 2015, down from 351 projects worth $51.6 billion over the same period in 2014.
Vigorous growth in China’s investment in and trade with the Americas may be what the future holds, but not, it seems, this year.
To dig into the data on China’s import from or exports to any of its trading partners in the Americas, just ask us.