{"id":15334,"date":"2021-07-28T08:26:05","date_gmt":"2021-07-28T12:26:05","guid":{"rendered":"https:\/\/www.bu.edu\/gdp\/?p=15334"},"modified":"2021-08-09T10:47:58","modified_gmt":"2021-08-09T14:47:58","slug":"chart-of-the-week-top-greenfield-investors-in-latin-america","status":"publish","type":"post","link":"https:\/\/www.bu.edu\/gdp\/2021\/07\/28\/chart-of-the-week-top-greenfield-investors-in-latin-america\/","title":{"rendered":"Chart of the Week: Top Greenfield Investors in Latin America"},"content":{"rendered":"

Editor’s Note: A previous version of this post shared a chart that was inconsistent with the title of the piece. The chart has been corrected, and the piece has been updated as of Monday, August 8, 2021.<\/em><\/p>\n

By Bridgette Lang<\/a><\/p>\n

Since 2008, China has been a fast growing and evolving player in Latin America, with investment playing an increasingly important role.<\/p>\n

Looking at the existing data, China appears to be a major new source of investment and economic resources for Latin America. A recent working paper<\/em><\/strong><\/a> by former Boston University Global Development Policy Center Predoctoral Fellow Victoria Chonn Ching<\/a> analyzes China\u2019s investment deals in Latin America by asking: (1) Are Chinese firms hindering Latin America\u2019s investment diversification by pushing out other dominating investing countries? Or (2) are the investments meeting the host country\u2019s demands and interests, and actually improving Latin America\u2019s investment diversification efforts?<\/p>\n

To begin, Chonn Ching compared Chinese greenfield investment with other sources of investment in the region. Specifically, traditional investment partner countries, like the United States, Spain and Canada, have long accounted for the majority of investment. According to Chonn Ching, \u201cSince 2010, the United States and Spain represented more than 30 percent of greenfield FDI [foreign direct investment] inflows in Latin America.\u201d From 2005 to 2019, Spanish greenfield FDI inflows gradually increased from an average 10.3 percent during the first period of analysis (2005-2009), to an average 14.3 percent in the third and last period of analysis (2015-2019). Yet, the United States remains the largest investor in the region, accounting for an average of 22.6 percent of overall greenfield investment, maintaining a stable and consistent rate in the region.<\/p>\n

\"\"<\/a><\/p>\n

Despite becoming one of the world\u2019s top sources of foreign direct investment, China still trails behind the region\u2019s largest investors. Chinese FDI has averaged $10 billion per year from 2010 to 2014 in Latin America. From 2005 to 2019, China contributed less than 10 percent of total greenfield FDI in Latin America, whereas the United States and Spain accounted for more than 20 percent and 10 percent, respectively. Given these large gaps between China and the other investors in Latin America, it would be hard to compare China\u2019s involvement to that of the United States or Spain.<\/p>\n

Adding intra-regional FDI flows (led by Brazil and Mexico) to the top two investors \u2013 the US and Spain \u2013 the investment share from this group of investors is estimated to be over 45 percent. This means that a small number of traditional players still accounted for about half of new investment inflows into Latin America. While China\u2019s investment participation in the region has increased since 2000, these investment shares have experienced minor to moderate changes.<\/p>\n

In addition, her working paper also examines the share of China\u2019s participation in merger and acquisitions in the region, which appears to have scaled up more quickly in recent years. However, according to Chonn Ching, \u201cWhile its growth has been fast in terms of mergers and acquisitions, China does not appear to be an immediate threat to traditional investors in the region. Instead, China is buying as top traditional partners in the region are also selling.\u201d<\/p>\n

Chonn Ching\u2019s research concludes that, thus far, China appears to have been an additional source of capital and resources for Latin America, more so than just another dominating investor in the region. However, she also urges further examination, \u201cparticularly in those countries with weaker investment policies and more laxed environmental and labor standards\u201d to ensure benefits continue to supersede costs in the long term.<\/p>\nRead the Working Paper<\/a>\nRead the Blog<\/a>\n","protected":false},"excerpt":{"rendered":"

Editor’s Note: A previous version of this post shared a chart that was inconsistent with the title of the piece. The chart has been corrected, and the piece has been updated as of Monday, August 8, 2021. By Bridgette Lang Since 2008, China has been a fast growing and evolving player in Latin America, with […]<\/p>\n","protected":false},"author":19399,"featured_media":15999,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[75,398,156,72,76],"tags":[725,394,969,970,598,480,408,1069,401,689,402],"_links":{"self":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/15334"}],"collection":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/users\/19399"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/comments?post=15334"}],"version-history":[{"count":16,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/15334\/revisions"}],"predecessor-version":[{"id":16002,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/15334\/revisions\/16002"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/media\/15999"}],"wp:attachment":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/media?parent=15334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/categories?post=15334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/tags?post=15334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}