China stopped buying US Treasuries and is investing in Brazil!
By one estimate, Brazil alone absorbed $5.9 billion of FDI from China in 2021, making it the top recipient country of Chinese investment in the world.
Chinese Investment holding steady in LATAM and the Caribbean (LAC)
FDI flows from China to LAC have held steady at levels above $4.5 billion annually on average since 2016, based on our conservative estimates. This is remarkable, considering Chinese investment contracted globally during the same period, particularly in the U.S. and the EU, where it plummeted from over $50 billion per year, combined, to under $15 billion.
The relative resilience of LAC enabled the region to gain importance as a destination for Chinese investment. Prior to 2016, LAC represented less than 3% of China’s annual FDI outflows. Now, its share has likely grown to between 5% and 10%.
To put things in perspective, last year China invested $8.4 billion in the EU, $4.7 billion in the U.S. and $7-10 billion in LAC. The fact that LAC would attract a comparable amount of Chinese investment as did the EU and the U.S.—much larger economies—was unimaginable a decade ago.
After Brazil, other LAC nations, such as Chile, Peru and Argentina, have also received sizable Chinese investments on a regular basis in recent years, with individual mergers and acquisitions transactions representing upwards of $3 billion—such as the Luz del Sur acquisition in Peru and the CGE purchase in Chile.
https://www.americasquarterly.org/article/china-is-here-to-stay-in-latin-america/#:~:text=Prior%20to%202016%2C%20LAC%20represented,%247%2D10%20billion%20in%20LAC. |
