China is Now South America's $900B Largest Trade Partner

China’s economic presence in Latin America has skyrocketed in the past two decades. According to the IMF, Cuba was the only country in the region trading more with China than the US in 1981. Since then, nine different countries have grown their trade relationship with China to surpass that with the US. Suppose we wouldn’t count Mexico, which accounts for 71% of US trade with Latin America. In that case, China is the region’s most dominant trading partner.

Increased trade has also scored China some political points. Through economic influence, China has tightened its grip in Central America and countries worldwide to cut ties with Taiwan and recognize Beijing as the legitimate government of China, according to its “One China” policy. In the past four years, the Dominican Republic, El Salvador, and Panama have cut ties with Taiwan and joined Costa Rica and Nicaragua in favor of siding with China. The notable exception is Paraguay, which remains the only South American nation that maintains ties with Taiwan, a relationship that has been going on for more than six decades.

The United States may no longer dominate the world in terms of goods traded, but that’s not the only way to measure a country’s influence and economic ties with other countries. For instance, software products developed in the USA are the most used worldwide, creating enormous wealth for the country. By far, it accepts the most significant number of foreign workers to go and participate in its economy. It has perhaps the best laws regarding ease of doing business, making it a hub for innovation. Eight out of the ten largest companies by market cap are from the US, all in the technology sector.

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