The Trade Specialization of China, India, Brazil, and South Africa: A Threat to Whom?

Abstract

This article looks at the characteristics and evolution over the last ten years of the commodities trade specialization of China, India, Brazil, and South Africa (CIBS). Unlike earlier studies, this work offers an evolutionary and comprehensive assessment of the trade challenges posed by CIBS to the global trading system. To this end, we adopt the notion of “trade specialization cluster,” i.e. a group of countries sharing a common trade specialization at a level higher than experienced in countries outside the group. Clusters are drawn by using the crisp cluster technique. Our findings contribute to partial mitigation of the pessimistic view which looks at CIBS as a source of threat to the developed world — with the relevant exception of China — while highlighting a competitiveness threat for developing countries.

Keywords: CIBS, trade specialization, comparative advantage, cluster analysis