The study by Kevin Gallagher at Boston University and Roberto Porzecanski at Tufts University said China's surge in the technology industries pose a major risk to Latin America, which has failed to remain competitive.

'The competitiveness of Latin American countries in high tech is stagnating or rapidly deteriorating for an overwhelming majority of high-tech products,' the researchers said in a paper released by the Centre for Latin American Studies at the University of California.

'This finding is particularly striking in comparison with China's impressive performance.' The researchers noted that 'although we don't speculate about a causal link ... our findings undeniably show that China's efforts to develop endogenous technological capacity and competitiveness have been by far more successful' than those in Latin America.

They wrote that China's success is especially stunning since in 1980 it was ranked 99th among all countries in technology exports. By 2005, China was nearly even with the world leader, the United States, with about 12.4 per cent of global exports.

The study said a large amount of high-tech manufacturing has moved from wealthier developed countries to the developing world since 1980, and that 'China has captured the majority of those gains.' The report said 95 per cent of technology exports from the Latin American countries 'are under some type of threat from China, the majority of which are direct threats.' This represents about 12 per cent of all exports from Latin America.

'This is most pronounced in Mexico and Costa Rica, where over 87 per cent of all high-technology exports are under threat and where such exports represent over 24 per cent of total exports in both countries,' the study concluded.

The researchers found 'that there was significantly more government involvement in spurring high technologies in China than in the Mexican case.' Some of the high-growth industries in China are state-owned, and some others are joint ventures.

They wrote that 'even if Mexico had the political will to engage in a similar policy set as China in the high-technology sector, existing trade commitments under Nafta (North American Free Trade Agreement) would make it more difficult for Mexico to deploy such policies, whereas China only has to comply to looser WTO (World Trade Organization) rules.' -- AFP