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LatAm leaders told to take action against Chinese 'invasion' - 17 November 2011

Governments in Latin America need to go "beyond typical economic remedies" to tackle the threat of imports – particularly from China – says the new president of regional steel association Alacero (formerly Ilafa), Raul Gutierrez.

"We need to protect ourselves from the invasion of manufactured products. We don't have the mechanisms to deal with the currency devaluations, which are the tools that China uses; we can't fight these tactics," he told delegates at Alacero's annual conference.

Having aired the same concerns to Steel Business Briefing on Monday, Gutierrez said countries across the continent need to work together to tackle the problem and "free trade agreements are needed to foster greater economic integration".

According to data compiled by Alacero, Brazil, Mexico, Argentina and Colombia import US$60bn of Chinese steel products each year, but only US$2bn of steel goods make the reverse journey. "We are concerned about the impact on our value chain," stated outgoing president Daniel Novegil.

China dominated a panel session on the market outlook for BRIC countries, with Barry Naughton, professor of Chinese economy at the University of California in San Diego, saying that as the Asian giant races towards middle-income status it is faced with two competing policy agendas.

The first is the current strategy of "government-led transformation"; the second "renewed reform and macroeconomic balance". "There is rising discomfort with the past course of government-led transformation," he said."Inflation needs to be controlled [and] there won't be a resumption of rapid credit growth. When China becomes a middle-income country it will have a direct impact on all steel businesses".


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