China is currently at the forefront of establishing trade cooperation with large regions such as Africa, and several countries in Asia where China invests directly in the region.
However, currently China is still lagging behind the United States (US) in the trade cooperation that exists with regions in Latin America even though China is now trying to increase its trade and investment in the region.
According to analysts, Latin America stands out from other regions where China has invested because of the government’s more protectionist policies in the region plus less conspicuous involvement of the US economy in other parts of the world.
The data shows that “China has become a new investment partner for Latin America, but does not appear to be a direct threat to long-standing investors in the region,” Boston University’s Center for Global Development Policy said in a study earlier this year.
This week, a number of US government officials are in Latin America looking for infrastructure projects related to the G7 Group of countries plan to “Build Back a Better World”.
The plan, which was announced in June, is seen as a ‘competitor’ to China’s “Silk Road” program to build infrastructure projects in developing countries. The G-7 group itself consists of rich and highly developed industrialized countries.
Some economists have raised concerns over the Chinese government’s borrowing practices, saying countries could owe too much for large projects that are not worth the cost.
China’s investment in all new projects in Latin America between 2005 and 2009 rose from 4 percent to 6.8 percent over the five-year period ending in 2019, according to database calculations. fDi Markets.
In a landmark case it was reported that China started investing in Chile only five years ago and is now the South American country’s main source of foreign capital, said Jorge Heine, Chile’s former ambassador to China.
America remains as the region’s main investor with about 22 percent of the total foreign resources available. American consumers depend on Latin America for agricultural goods while Mexico, the second most populous country in the region, regards America as its biggest direct investor. (my/jm)