The South goes East: Panel data research on Latin American growth versus trade with China

China is increasingly shifting attention to other developing continents, recently particularly towards Latin America. Trade between the Asian giant and Latin America has exponentially grown in the last decade; however, the question arises whether trade cooperation, the exports of mainly primary commodities or related manufactures and the import of manufactures, is beneficial for the Latin American economies. Has the growing trade already impacted Latin American growth figures? Are there other reasons behind growth? A dynamic panel data model is used for studying the direct exporting and importing effects of China on the growth of Latin American economies from the period 2001 to 2010. According to the results, there is strong evidence on growth momentum in Latin America as well as on the importance of investment in the growth of the countries. Exports to China do not enhance growth unconditionally; however, exporting oil to China might support growth. Further evidence highlights that imports of manufactures could positively impact growth. Though, trade with advanced partners do not have significant impact on Latin American growth despite their large shares in total trade