Review of The Dragon In The Room - Book Report/Review Example

On the other hand, China can be seen as a kind of “angel” (p. 1) because its huge appetite for Latin American goods in recent years has undoubtedly brought much needed trade and investment in these countries and it has fuelled their success when other countries have struggle through the crisis and trade deficits. These rather emotive images capture the imagination, and could be seen as fanciful exaggerations, were it not for the detailed analysis of information that makes up the body of this highly factual book.

It comes to four key conclusions, namely that Latin American countries have an export profile with China that is much too narrow, that Latin American products are coming under increasing pressure on world markets due to competition from Chinese products, that China is industrializing and diversifying at a rapid pace while Latin countries are not, and finally, that the impressive growth that China is currently experiencing may well be at the expense of the longer term growth and development of Latin American countries.

The book explains how China has pursued a consistent strategy of globalization through trade, gradually increasing its importation of raw materials for its growing industrial and manufacturing base. Chapter two describes the “commodities boom” (p. 11) which followed as Latin American countries scrambled to provide the raw materials that China required. The immediate consequence of this was a welcome boost to revenues in the six countries which provided the bulk of China’s primary product needs.

In chapter three the authors demonstrate how China has used these primary products to build up its technical capabilities in order to produce higher level goods which can compete on the global market. This is clearly very good news for China, and is helped by an interventionist government philosophy based on firm forward planning. Increased imports have therefore fed directly into vastly increased production and investment in technology. The effect on Latin American countries has, however, been less uniformly good.

Some countries and sectors have missed out, since China has chosen only those raw materials which it cannot easily locate in sufficient quantity closer to home, and it has not chosen to import manufactured goods from Latin America. Indeed it turns out that Chinese industrial products are flooding the world market, to the extent that 94% of Latin American manufacturing exports are now deemed to be “under threat” (p. 39). The book delivers considerable detail on the performance of China in comparison with Latin America as a whole and with individual Latin American economies.

Chapter five conducts a Mexico-specific analysis which allows the reader to trace the trends that have been developing between these two countries. A very telling graph (p. 154) based on figures taken from the United Nations Statistics Division (2009) compares the change in manufacturing market share which have occurred in Mexico and in China between 1985 and 2005, for example. Mexico has the higher performance at the beginning of this time frame, but this changes to a convergence of the two country results in the middle of the time frame, and then finally to a very large rise in China’s performance at the end of the period, while Mexico’