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Commodities to Power Emerging Markets Higher

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Copper will be a key driver.

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China consumes 40% of the world's copper and meets its demand primarily through importing copper from Latin America. Over the past few decades, the amount of copper China consumes has grown each year and this trend is likely to continue for at least the next five to ten years.

For example, in December 2011, China imported more than 500,000 tons of copper, which amounted to a 47% increase from December 2010. It is estimated that in 2012 China will consume 6% more copper than in 2011, but there is a strong case that growth will continue or exceed the pace of the past few decades. Since 2000, China's consumption of copper has grown at a rate of 15.1% annually. Along with demand for copper, China depends on imports for iron ore, steel, and oil.

Latin America produces over a third of the world's copper. This is primarily produced by Chile and Peru, but other nations, such as Panama, are rich with the industrial commodity and currently working on mines to extract the metal. Brazil, which boasts China as its largest trading partner, is the lead exporter of iron ore and crude oil in Latin America.

While an argument could be made for many of the countries in Latin America to rise from the development occurring in China, Brazil, with the already established trading relationship, supply of industrial commodities, and strong government pro-trade policies, is a prime example of a Latin American country positioned to experience significant growth through its trade relationship with China.
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