Chilean Dependence on China's Commodity Demand

The trade relation between China and Latin America reached a level in the last decade that made it fundamental for the high growth of countries like Brazil, Peru, Argentina, Venezuela and Chile. The Chinese demand of raw materials such as oil, copper and iron ore has been a driving force for a stable economic growth in Latin America during the first decade of the XXI century, giving to some countries a protection during times economic crises and low growth in developed countries. For Chile the key commodity is copper, and even when Chilean exports are now more diversified, there is still a big reliance on the red metal. This text analyses if Chile is prepared to resist the shock of a sudden drop of Chinese demand of copper in case that Asian economy stop buying big amounts of the mineral. It also explores past and current economic models followed by Chile, plus its experiences in previous crisis in the XX century. It also takes a deep look at the experience of Brazil, and the greater involvement of Brasilia in its economy, and how Chile has modified its own policy and legislation to confront new crises.