The Role of Geography and Size

Abstract

This report focuses on issues for Latin America and the Caribbean from China's expanding presence in the world economy, with a particular interest in questions related to China's size and proximity to markets.The authors begin with a basic overview of facts, including a characterization of trade and trade growth for China and Latin America and the Caribbean (LAC). Next, the following issues are addressed: -Relative proximity of China and LAC countries to major markets.-Detailed data on shipping costs to address the size of the import wedge, the price of goods at the exporter's departure port telative to the importing destination and the size of the sourcing wedge and its determinants. -LAC's proximity to the US market. -Overview of literature discussing the importance of country size.

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