Expanding trade dependence on China is now starting to hurt. For some Latin American countries China is the single most important export destination, while the export dependence of other countries in the region ex-Mexico has risen significantly.

Apart from the impact through the price channel, the demand channel has also reduced Latam exports quite significantly.



"A 1% lower Chinese nominal GDP growth cuts total Latam exports by 0.5% and reduces Latam GDP by 0.1%. Given nearly a 10% fall in China's nominal growth, Latin American exports have declined by 5.5% and Latam GDP has contracted by 0.7% purely due to the China growth effect since 2012. Of course, these are all direct effects; the indirect effects through commodity prices and through China's impact on other markets are considerably greater", estimates Societe Generale.