Help Latin America weather the winter

Most international institutions believe that the overlapping of weakening global demand and excess production are to blame for the decline. Take iron ore for example. Global buyers, except China, are reducing orders which in turn have lowered demand and prices in the international market. But major producers continue to increase their outputs in order to squeeze out small and medium-sized producers from the market.

On the other hand, the appreciation of the US dollar and geopolitical factors too have led to the drop in international commodity prices; the price of crude oil is a typical case. Besides, expectations of an increase in US interest rates caused capital outflow, and some Latin American countries' currencies depreciated by 15 percent to 30 percent, increasing their financial risks. The Wall Street Journal even said the strong dollar was the final straw on commodity price's back.

So how can Latin America cope with the "winter"?

Along with thChina Dailye above mentioned factors, internal weaknesses like overdependence on exports, imbalance in investments, and consumption and structural problems have also hurt Latin America's economy.

That is why the Economic Commission for Latin America and the Caribbean has advised the region's countries to adopt balanced trade and investment policies, take measures to reduce intraregional trade costs and promote trade integration, reduce dependence on commodities and build a diversified economic structure.

In the medium-to-long term, Latin American countries can still count on their rich natural resources and demographic dividends, and use macro-economic adjustments and structural reforms to overcome their economic difficulties, and hopefully achieve 0.7 percent growth in 2016, and thereafter maintain a modest growth.

Therefore, China and Latin America should upgrade their economic cooperation to provide warmth to each other "during the winter" not only for the benefit of their own development, but also to help boost emerging countries' confidence in strengthening cooperation and boosting global economic recovery.

The author is a Beijing-based researcher in international studies.