Chinese FDI in Latam Declines in 2H18, but remains strong

Chinese plans for investment in Latin America declined slightly in the second half of 2018, with at least $10.7b in projects unveiled.

After a strong first half of announced and completed foreign direct investment (FDI) totaling $15.3b, the rate of projects slowed. Numbers for the first half of 2018 were some inflated, in part due to complications with individual deals. For example, Tianqi Lithium spent most of 2018 working on approval from Chilean authorities to increase its stake in SQM by $4.3b.

Even as FDI slowed over the course of the year, 2018 was still a strong showing: more than a third higher than the $17.7b in 2017. This was highlighted by the Chinese Commerce Ministry around President Xi Jinping’s visit to Buenos Aires last month (商务部召开例行新闻发布会).

China 2H18 FDI.jpg

Unsurprisingly, infrastructure and natural resources continue to be a primary driver of Chinese FDI towards Latin America. A steel plant and iron mine expansion in Peru — along with CCCC’s construction of a fourth bridge across the Panama Canal — were some of the biggest projects announced this past six months.

It’s an open question whether some of the biggest deals represent any real new investment at all.  CNPC’s increase of its stake in Venezuela’s Sinovensa to 49% listed here as being worth $5b may end up being collateral for debts already owed. Other deals discussed — including an up-to-$10b from China National Nuclear Corporation for Argentina’s Atucha III nuclear power plant — may not get off the ground.

So while smaller, some other deals may be indicative of where the relationship is going. Technology continues to be an area of interest for Chinese investment in Latin America. Tencent’s acquisition of Nubank and Ant Financial’s stake in the StoneCo IPO paralleled expansion by companies such as Didi Chuxing and Mobike. Growing interest in specialty foods and products for China’s growing middle class led to acquisitions of fisheries and fruit plants by Joyvio and Shenzhen Golden Anda.

With all eyes now on 2019, we will be closely watching the impact which the US-China trade war, a slowing economy in China, the retooling of the Belt & Road Initiative (BRI), and other factors will have on FDI flows.

Top Stories

Por qué 2019 será un año trascendental para el libre comercio (pese a la guerra entre China y EE.UU.)— BBC
Nuevo TPP: ¿qué cambia para México, Chile y Perú con el nuevo Acuerdo Transpacífico de Cooperación Económica?— BBC
Acuerdo de Asociación Transpacífico y los beneficios que otorgará a Chile, México y Perú— Mundo Marítimo 
Este artículo lo puede ver en este link: Cae arancel para carne vacuna en Japón— El Observador
Trump pulled out of a massive trade deal. Now 11 countries are going ahead without the US— WPTV
Standing against the protectionism of the day, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into effect on December 30th, giving Mexico, Japan, Singapore, New Zealand, Canada, Australia, and Vietnam new markets to play in.

ProMexico to close overseas network— Fruit Net
Mexico new President Andrés Manuel López Obrador (AMLO) says he is closing all its ProMexico offices overseas. Penny wise, pound foolish.

巴西“南美特朗普”就职 曾对中企在巴投资表担忧— Sina
‘China não é parte dos problemas do Brasil, mas sim das soluções’, diz jornal estatal chinês— Paraná Portal
Mourão exalta parceria do Brasil com a China— Brasil 24/7
Chanceler de Bolsonaro: 'Brasil tem que se aliar a si mesmo e não com outros países’— O Globo
China responde a declaraciones de Pompeo sobre lazos con Brasil— HispanTV
Cooperación China-América Latina favorece promoción de intereses comunes, dice portavoz—
La cooperación China-América Latina se ajusta a los intereses respectivos— Télam
Base militar americana colocaria Brasil sob suspeita entre vizinhos, diz professor— Época
Despite U.S. hopes, Bolsonaro sends mixed signals on China strategy— Axios
Bolsonaro Was Not Elected to Take Brazil as He Found It— Bloomberg
Now we do— The New Criterion 
Will Bolsonaro change Brazil's foreign policy toward China?— CGTN
The US-China trade struggle has turned into a war for the soul of the new Jair Bolsonaro administration in Brazil. Vice President Mourão sends positive signals to China, while Foreign Minister Ernesto Araújo keeps his eyes on the US.

The US military is warning that China's fishing boats are bullies and could start a war on the high seas— Business Insider
Secretary of State Pompeo to Press China Concerns in Brazil— WSJ
Mike Pompeo hopes to find in Brazil a new ally against China— The Washington Times
EE.UU. pide a Latinoamérica cerrar filas contra Maduro y contener a China— La Vanguardia 
On his trip to Brasília for Bolsonaro’s swearing in, US Secretary of State Mike Pompeo tries to rally Latin America against Venezuela’s Nicolás Maduro and China.

Why Electric Vehicles Are Gathering Speed in Latin America — The New York Times
Medellín tendrá la segunda mayor flota de buses eléctricos de Latinoamérica— ABC Color
BYD is taking their electric bus model from Santiago to Medellín.

China — LAC

第二届进博会倒计时 这个离中国最远的国家力促对华出口 - 博会,更高,第一大,该公司,第二届 - 第一财经 - 汉丰网— Kaixian

Exclusive: Inside the 2018/19 Cherries from Chile Promotional Campaign— ProduceReport

México, ajeno a mercado petrolero chino: Cepal— El Universal

Cerezas chilenas aumentan su presencia en mercado chino— Xinhua

Se oriente, Brasil— Folha 

Para el 2020 México tendrá una planta automotriz china— La Verdad

China lidera as compras de produtos brasileiros, diz Ministério da Economia— Último Instante

Inyectemos energía positiva a la cooperación China-México— Milenio

Engineers Trained in China Employed at JISCO/Alpart— JIS News

La quinua del Perú ingresaría a los mercados de China y Colombia durante el 2019— América Economía 

The PRC Bets on Climate Diplomacy in the Caribbean— The Jamestown Foundation

Comienzan las primeras exportaciones de cerezas a China— FM 89,9

Reino Unido desplaza a China en inversiones mineras futuras en el Perú— Perú 21

China podría ser el invitado externo en el escenario americano— La República 

Establishing ties with China good to Panama, says President — The Rahnuma Daily

ESPECIAL FIN DE AÑO: 2019, año con oportunidades para América Latina— Xinhua

Korea — LAC

Corea del Sur: socio estratégico el el crecimiento industrial de Nuevo León— Mexico Industry News 

Japan — LAC

Representantes de everis participan de misión público-privada a Japón— Portal Mineiro 

India — LAC

OVL makes oil discovery in Colombia— the Times of India

India's ONGC Videsh finds more oil in Colombia— Reuters


UAE minister sees agricultural research in Brazil— MENAFN

Subscribe to our mailing list

* indicates required