Chinese investment in Latin America rose to $80 billion USD in 2013, with the region accounting for almost 13% of Chinese foreign investment. The Asian giant is going beyond raw materials and pouring huge sums of money into Latin American infrastructure projects, according to China Daily.
Brazil’s new industrial policy, Mexico’s energy reform and Cuba’s special economic zones are the latest attractions luring a new breed of Chinese firms into Latin America, stated Xu Yingzhen, China’s Commerce Minister, at a recent trade forum attended by representatives from many Latin American countries in South China’s Guangzhou city.
Chinese firms are expected to invest $500 billion overseas over the next five years, the China Daily states. Analysts say a significant chunk of this cash might flow into Latin America, as Chinese firms are wrapping up several contracts in the region’s infrastructure sector.
PowerChina was recently awarded a power transmission project valued at about $156 million in the Brazilian state of Para. The project will see PowerChina transmit electricity from the Belo Monte hydro-power station to the high-demand regions in the southeast of the country.
China’s Planning Commission also expects an increased Chinese investment in Latin America and the Export-Import Bank of China recently set aside $10 billion to finance infrastructure development programs in several countries across the region.
In 1992, less than 1%of Latin America’s exports went to China, the People’s Daily noted, but “20 years later, that figure has multiplied by a factor of more than seven.”
China is set to overtake the United States to become Latin America’s largest trading partner by 2030. China became the region’s second biggest partner in 2012, with trade between the two now exceeding $250 billion.