Foreign Direct Investment from China and Latin America

Abstract

Historically, Chinese corporations have been relatively unknown in Latin America. Total foreign direct investment (FDI) in Latin America was 18.1% of the world total in 2012 (UNCTAD, 2013). However, Chinese FDI in Latin America has averaged about US$10 billion per year since 2010, only a small part of Latin America's total FDI inflows (ECLAC, 2013). Yet the presence and economic leverage of Chinese corporations has become very substantial in several industries in the region, particularly the oil and mining industries. Trade between China and Latin America has also grown dramatically since 1999 (Luo, et al., 2010). Despite the growing economic connectivity between Latin America and China, the motivation, strategy and procedures behind China's FDI in the region have not yet been fully understood.