September 1, 2005
What does this move mean for Latin America?China's revaluation will affect different Latin American countries in different ways. The appreciation gives short-term relief to those countries that compete with China in the manufacturing sector. Manufacturing in China will become a little more expensive. Latin American countries that are exporting manufactured products to the US and Europe, such as Mexico and countries in the Central American Free Trade Agreement will have some breathing room. For commodity exporters, such as Brazil, Chile, Venezuela and Peru, the faster China grows the better it is for them. As
China revalued its currency, the renminbi, in July. Joydeep Mukherji, director at Standard & Poor's, explains its long-term effect on Latin America.