Lat Am’s shifting relationship with China

The collapse in China’s stock market has rekindled fears over the outlook for its economy and led to renewed concerns about the spillovers to other EMs, including those in Latin America. As it happens, we continue to think that the worst fears about China’s economy are overdone. Instead, from the perspective of Latin America, the major issue is not so much that the headline rate of growth in China is slowing but that the drivers of growth are shifting from investment and heavy industry to consumer spending and services. In this Watch, we take a closer look at the implications for the region.