Friday, February 01, 2013
Tweet[IWS] ECLAC: THE CHANGING NATURE OF ASIAN-LATIN AMERICAN ECONOMIC RELATIONS [December 2012]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Economic Commission for Latin America and the Caribbean (ECLAC)
THE CHANGING NATURE OF ASIAN-LATIN AMERICAN ECONOMIC RELATIONS [December 2012]
or
http://www.eclac.org/publicaciones/xml/9/49059/TheChangingNature.pdf
[full-text, 197 pages]
Abstract
The swift expansion of developing Asia is probably the most significant structural change in the world economy of the twenty-first century. Latin America, and in particular South America, have strongly benefited from developing Asia’s surge. China has become one of the region’s main trade partners. Despite their benefits, strengthened trans-Pacific economic relations have also become a cause for concern in Latin America, due to major imbalances of different kinds.
The purpose of this book is twofold. On the one hand, it aims to document the growing investment and trade relations between Latin America and Asia, as well as some of their imbalances. On the other hand, it provides several examples on how to upgrade trans-Pacific economic relations.
Contents
Foreword................................................................................................................ 9
Introduction......................................................................................................... 13
Chapter I
Asian agribusiness investment in Latin America, with case studies from Brazil.............................................................................................. 33
Introduction.............................................................................................. 33
A. Asian transnational agrifood corporations ................................ 36
1. Investment, trade and trade agreements between Asia and Latin America............................................................ 36
2. Emerging-market transnational corporations....................... 38
3. The role of government............................................................ 39
4. The role of cultural linkages.................................................... 40
5. The role of vertical integration................................................ 40
6. Is outward Asian FDI resource-seeking?............................... 42
B. FDI trends worldwide and in Latin America.............................. 44
1. FDI in agriculture, forestry and fishing.................................. 44
2. FDI in the food and beverage processing industry.............. 48
C. Country analysis.............................................................................. 51
1. Japan............................................................................................ 51
2. China........................................................................................... 56
D. Case studies...................................................................................... 58
1. Japan and the Cerrados Region Development Programme (PRODECER) in Brazil........................................ 58
2. Asian logging investments in the Brazilian and Peruvian Amazon...................................................................... 61
3. Japanese investments in Brazilian biofuels............................ 64
E. Final considerations........................................................................ 67
Bibliography............................................................................................. 70
Chapter II
The changing nature of Asian investment in Latin American
manufacturing: a value chain analysis............................................................ 75
Introduction.............................................................................................. 75
A. The steel industry............................................................................ 77
1. POSCO CGL Altamira, Mexico................................................ 83
2. Companhia Coreano-Brasileira de Pelotização (KOBRASCO)............................................................................. 85
3. NIPPON Steel USIMINAS, Brazil........................................... 86
4. BAOSTEEL Victoria Iron & Steel Co., Brazil......................... 87
B. The automobile sector.................................................................... 88
1. Chery Socma S.A. Uruguay..................................................... 91
2. Moto Honda da Amazonia....................................................... 93
3. Honda Automóveis do Brasil Ltda. ....................................... 94
4. Nissan Mexicana S.A. ............................................................... 95
C. The electronics industry................................................................. 98
1. Panasonic do Brasil Ltda. (PANABRAS)................................ 99
2. Toshiba T&D do Brasil Ltda. ................................................. 101
3. Huawei do Brasil..................................................................... 102
4. Samsung Electrónica da Amazonia Ltda. (SEDA).............. 102
5. Samsung Mexicana S.A. de C.V. (SAMEX).......................... 104
6. LG Electronics do Brasil.......................................................... 105
D. The textiles and apparel sector.................................................... 106
1. Sae-A.......................................................................................... 107
2. Hansoll Textile.......................................................................... 109
3. Hansae....................................................................................... 110
E. Concluding remarks......................................................................111
Bibliography........................................................................................... 112
Chapter III
Global services models for promoting economic integration between Asia and Latin America ................................................................... 115
Introduction............................................................................................ 115
A. Analysis of offshoring industries in Latin America and Asia........................................................... 116
1. Definition and international trends...................................... 116
2. Services offshoring in Latin America.................................... 121
3. Services integration between Latin America and Asia.................................................................................... 129
B. Asian offshoring services firms in Latin America:
case studies..................................................................................... 132
1. Indian firms.............................................................................. 133
2. Japanese firms.......................................................................... 138
3. Korean firms............................................................................. 141
4. Chinese firms............................................................................ 142
5. Challenges to integration between Latin America and Asia.................................................................................... 143
C. Policy outlines for promoting the integration of offshoring services between Asia and Latin America................................. 143
1. Latin America’s perspectives in the offshoring industry.................................................................. 144
2. Public policies and productivity........................................... 145
3. Policies to promote the services industry ........................... 146
4. Policy on research and development.................................... 147
5. Education, training and social capital.................................. 150
6. Regional initiatives.................................................................. 151
Bibliography........................................................................................... 152
Chapter IV
Business models for trans-Latins: Latin American investments in Asia .......................................................................................... 155
Introduction............................................................................................ 155
A. Latin America in global value chains: foreign direct investment...................................................................................... 158
1. Inward FDI............................................................................... 158
2. Outward FDI............................................................................ 161
B. Case studies of Latin American firms internationalizing in Asia............................................................. 169
1. Tenaris (Techint Group).......................................................... 169
2. IMPSA....................................................................................... 175
3. Bimbo ....................................................................................... 179
4. Embraer..................................................................................... 182
C. Concluding remarks..................................................................... 187
Bibliography........................................................................................... 189
ECLAC publications......................................................................................... 191
Tables
I.1 Estimated inward FDI stock worldwide, by sector and industry, 1990 and 2007........................................................................... 45
I.2 Estimated outward FDI stock worldwide, by sector and industry, 1990 and 2010................................................................... 46
I.3 Inward FDI in agriculture, forestry and fishing, various years............................................................................................ 47
I.4 Japanese outward FDI in agrifood industries, by region, 1989-1994 to 2000-2004............................................................................ 53
II.1 Fdi motivations of Asian firms investing in Latin America in the steel, automobile, electronics and textile industries..................... 78
II.2 Usiminas and Unigal – foundation, shares, production and sales.................................................................................................... 86
II.3 Facilities of Nissan Mexicana................................................................. 96
II.4 Chronology of Panasonic do Brasil (company structure), 1967-2006................................................................................................. 100
II.5 Samsung Electrónica da Amazonia: production history, 1995-2011................................................................................................. 104
II.6 Samsung Mexicana: Korean supply partners, 1991-2007................. 105
II.7 Sae-A, Hansoll and Hansae: main buyers.......................................... 108
III.1 Latin America: basic data on offshoring............................................. 122
III.2 Main services exporters, 2010-2011..................................................... 130
III.3 Latin America (selected countries): Asian offshoring services centres, 2003-2009................................................................... 133
III.4 Indian global services providers in Latin America, 2003-2009................................................................................................. 136
III.5 Japanese companies operating in-house centres and joint ventures in Latin America........................................................... 139
III.6 Korean in-house centres in Latin America, 2008............................... 141
III.7 Latin America, India and Eastern Europe: chart of comparative advantages, 2009............................................................. 145
III.8 Selected countries: investment in R&D as a percentage of GDP, 2006............................................................................................ 147
IV.1 Selected developing countries and regions: share in global and developing country FDI outflows, 1970-2011 ........................... 162
IV.2 Latin American firms with investments in Asia................................ 167
IV.3 Tenaris’ capital investment allocation in Asia, 2008-2009................ 171
IV.4 Bimbo group’s global presence............................................................ 180
Diagrams
II.1 Value added links within a value chain............................................... 76
II.2 Steel industry value chain...................................................................... 82
II.3 Automobile industry value chain......................................................... 90
II.4 Process production and sales of Chery Socma.................................... 92
II.5 Supply chain management..................................................................... 94
II.6 The electronic industry value chain...................................................... 99
II.7 Textile industry value chain................................................................. 107
IV.1 Tenaris’ operations in East Asia........................................................... 173
IV.2 Bimbo group structure, 1978................................................................ 181
IV.3 Embraer’s global operation.................................................................. 184
Figures
II.1 Automobile exports from Brazil, per company, 2011......................... 95
II.2 Hansae: contribution of countries’ factories to total exports, 2003-2007.................................................................................. 110
III.1 Selected countries: labour cost competitiveness index, 2009.......... 128
III.2 Regional share in world services exports, 2010................................. 129
III.3 Client network of the Mathematical Modelling Centre, Chile........ 149
IV.1 World and Latin America: inward FDI flows.................................... 159
IV.2 World and Latin America: outward FDI flows.................................. 162
IV.3 Developing and transition countries: number of firms in the top 100 global firms from emerging economies, 2011...................... 163
IV.4 Embraer revenues by region, 2011...................................................... 186
Maps
I.1 Major international players in Latin American and Caribbean food and beverage industries, 2002....................................................... 50
I.2 Major Asian tncs in the food and beverage industry: distribution of foreign and domestic affiliates, 2002.......................... 51
II.1 Posco: logistics for automobile industry in Mexico........................ 85
________________________________________________________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
