The China Triangle: Latin America’s China Boom and the Fate of the Washington Consensus

Abstract

Kevin Gallagher’s latest book is a welcome contribution to the substantial and growing literature on Chinese engagement with Latin America. The present work, in some ways, extends and updates his pioneering 2010 book, Dragon in the Room, coauthored with Roberto Porzecanski. As with its predecessor, The China Triangle is both readable and filled with solid analysis. This is not your typical book by a PhD trade expert; the workbook integrates personal observations and illustrations with graphs and econometric analysis, and even once manages to use the word “hoopla” (p. 43). The China Triangle examines how, particularly from 2003 through 2013, select countries in Latin America benefited from their expanded trade relationship with the People’s Republic of China (PRC) as well as investment from PRC-based companies and loans from Chinese banks. While Gallagher acknowledges that revenues from commodity exports to the PRC contributed to programs to reduce poverty in Latin America, he finds that the region’s governments largely failed to effectively leverage this bonanza, in combination with coherent state policies, to diversify their economies and move them toward higher value-added production. Rather, he argues that competition from Chinese imports, together with the appreciation of Latin American currencies as a result of commodity exports, contributed to the deindustrialization of the region.