How Does China’s Growth Affect Poverty Reduction in Asia and Latin America? Rhys Jenkins and Chris Edwards University of East Anglia

People on<$2 a day in Asia Number % Population Bangladesh Cambodia n.a.n.a. India Indonesia Pakistan 9466 Vietnam Countries

People on <$2 a day in Latin America Number % Population Bolivia 334 Brazil 4124 Honduras 344 Mexico 2424 Nicaragua 595 Peru Countries 8727

Impacts of China on Developing Countries  Increased market for exports to China  Increased competition from China in third markets  Increased competition from China in domestic market  Effects on FDI  Multiplier effect of China’s growth on world output  Effect of Chinese demand on world prices

Framework of Analysis Growth of China Exports to China Agricultural Products Increased prod. Increase prices Increased unskilled labour Negative where land Is taken over Extractive Products Increased prod. Increased prices Increased taxes Increased skilled labour Increased gov. exp. Negative on env. & livelihoods Manufactures Increased production Increased skilled labour Competition in 3 rd Markets Labour- intensive manufactures Falling production Falling prices Reduced unskilled labour Labour- Intensive Agri. products Falling production Large fall in prices Reduced unskilled labour Positive if domestic food prices fall Competition in Domestic Market Competing With domestic producers Falling production Falling prices Increased taxes Reduced labour Cheaper consumer goods Competing With other imports Falling prices Cheaper consumer goods FDI Flows Diversion to China Falling production Reduced taxes Reduced unskilled labour Reduced gov. expenditure Inflows from China Increased prod. Falling prices Increased unskilled labour

Typology of Exports  Labour-intensive agricultural products (LA)  Non-labour-intensive agricultural products (OA)  Forestry (F)  Minerals and petroleum (MP)  Labour-intensive manufactures (LM)  Other manufactures (OM)

Structure of Exports to China, 2001 (%) IndonesiaVietnamBrazilPeru LA OA F MP LM OM

Share of labour-intensive products threatened by Chinese competition in total exports, 2001 (%) Agricultural Products Manuf- actures Total Bangladesh Cambodia Indonesia Pakistan Vietnam Mexico

Shares of Imports from China, 2001 (%) Labour-intensive Manufactures Basic Consumer Goods Bangladesh Cambodia Vietnam Bolivia Nicaragua

Aspects of China’s Growth Most Likely to Impact on the Poor Exports to China Exports to 3 rd Markets Imports from China AsiaIndonesiaVietnamBangladeshCambodiaPakistan Latin America BrazilPeruMexicoBoliviaNicaragua

Implications for policy  How to respond to opportunities and challenges?  What are the implications for pro-poor policies?

Further Research on the Impact of China on International Poverty  Analysis of competition in labour-intensive products in 3 rd country markets  Identification of products likely to have pro- poor impacts  Studies of individual value chains  In depth country case studies