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China goes on shopping spree in Latin America
China is pouring cash into Latin America, investing in everything from agriculture to railways while satisfying its need for oil and other raw materials to fuel its booming economy.
Beijing has organised an increasing number of trade missions to the region, notably signing oil exploitation and investment deals with producer countries including Argentina, Brazil, Colombia, Ecuador, Mexico and Venezuela.
"Latin America is looking at opportunities to grow," Gerardo Mato, the chairman of HSBC's global banking division for the region, told AFP.
"What they are looking for with China are opportunities of growing into China -- that means partnership with the Chinese."
The United States has so far welcomed Beijing's push into its southern backyard even though China is embracing such US bogeymen as Venezuelan President Hugo Chavez.
"It is certainly not a concern, it is certainly not a threat," Arturo Valenzuela, the US State Department's point man for Latin America and the Caribbean, told reporters during a visit to China last month.
In July, China gave Venezuela the first four billion dollars of a 20-billion-dollar line of credit, money that will be used to finance power, agricultural and infrastructure projects.
In April, state-owned China National Petroleum Corp. (CNPC) agreed to pay 900 million dollars to gain access to oil deposits in Venezuela's eastern Orinoco region.
That same month, a Chinese official said Peru had become the region's winner of the highest amount of firm Chinese investment to date, raking in 1.4 billion dollars, most of which has been poured into the country's mines.
But it's Brazil which is luring Chinese companies in droves, with both its massive oil and iron ore deposits and its need for financing and infrastructure investments ahead of the 2014 football World Cup and the 2016 Olympics.
"More than 50 percent of Chinese investment opportunities (in Latin America) are concentrated in Brazil," HSBC's Mato said on the sidelines of an investors' forum staged recently in Beijing.
China is likely to snare a major slice of the investment action for the two global sporting events, which could cost Brazil between 60 and 120 billion dollars, the New York-based banker said.
And Beijing is not content just to get its hands on Brazilian iron ore -- it will soon begin making steel in the country, with the construction of a five-billion-dollar plant by Brazil's LLX and China's Wuhan Iron and Steel.
"The impetus for China's thrust into Latin America is both natural resources writ large... importing and investing in mining them where possible -- and opening up export markets for consumer goods," Michal Meidan, an Asia expert at the political risk consultancy Eurasia Group in New York, told AFP.
"Geographically, the Chinese will likely continue to expand their investments all across the continent," Meidan said, from high-speed trains in the "more mature economies" to mining stakes in the less developed ones.
Beijing will compete fiercely with France's Alstom for contracts to build cutting-edge rail links in Brazil and Argentina, French Transport Minister Dominique Bussereau said during a visit to China last week.
China and Argentina agreed contracts for railway projects totalling 10 billion dollars during a July visit to Beijing by Argentine President Cristina Kirchner.
Latin American firms are looking for "financing opportunities" to develop their operations at home, but are not keen to surrender equity control, Mato said.
Earlier this month, Brazilian mining giant Vale announced plans to borrow about 1.2 billion dollars from China to finance the construction of ships to transport minerals to the world's second-largest economy.
China goes on shopping spree in Latin America - LANKA BUSINESS ONLINE
China is pouring cash into Latin America, investing in everything from agriculture to railways while satisfying its need for oil and other raw materials to fuel its booming economy.
Beijing has organised an increasing number of trade missions to the region, notably signing oil exploitation and investment deals with producer countries including Argentina, Brazil, Colombia, Ecuador, Mexico and Venezuela.
"Latin America is looking at opportunities to grow," Gerardo Mato, the chairman of HSBC's global banking division for the region, told AFP.
"What they are looking for with China are opportunities of growing into China -- that means partnership with the Chinese."
The United States has so far welcomed Beijing's push into its southern backyard even though China is embracing such US bogeymen as Venezuelan President Hugo Chavez.
"It is certainly not a concern, it is certainly not a threat," Arturo Valenzuela, the US State Department's point man for Latin America and the Caribbean, told reporters during a visit to China last month.
In July, China gave Venezuela the first four billion dollars of a 20-billion-dollar line of credit, money that will be used to finance power, agricultural and infrastructure projects.
In April, state-owned China National Petroleum Corp. (CNPC) agreed to pay 900 million dollars to gain access to oil deposits in Venezuela's eastern Orinoco region.
That same month, a Chinese official said Peru had become the region's winner of the highest amount of firm Chinese investment to date, raking in 1.4 billion dollars, most of which has been poured into the country's mines.
But it's Brazil which is luring Chinese companies in droves, with both its massive oil and iron ore deposits and its need for financing and infrastructure investments ahead of the 2014 football World Cup and the 2016 Olympics.
"More than 50 percent of Chinese investment opportunities (in Latin America) are concentrated in Brazil," HSBC's Mato said on the sidelines of an investors' forum staged recently in Beijing.
China is likely to snare a major slice of the investment action for the two global sporting events, which could cost Brazil between 60 and 120 billion dollars, the New York-based banker said.
And Beijing is not content just to get its hands on Brazilian iron ore -- it will soon begin making steel in the country, with the construction of a five-billion-dollar plant by Brazil's LLX and China's Wuhan Iron and Steel.
"The impetus for China's thrust into Latin America is both natural resources writ large... importing and investing in mining them where possible -- and opening up export markets for consumer goods," Michal Meidan, an Asia expert at the political risk consultancy Eurasia Group in New York, told AFP.
"Geographically, the Chinese will likely continue to expand their investments all across the continent," Meidan said, from high-speed trains in the "more mature economies" to mining stakes in the less developed ones.
Beijing will compete fiercely with France's Alstom for contracts to build cutting-edge rail links in Brazil and Argentina, French Transport Minister Dominique Bussereau said during a visit to China last week.
China and Argentina agreed contracts for railway projects totalling 10 billion dollars during a July visit to Beijing by Argentine President Cristina Kirchner.
Latin American firms are looking for "financing opportunities" to develop their operations at home, but are not keen to surrender equity control, Mato said.
Earlier this month, Brazilian mining giant Vale announced plans to borrow about 1.2 billion dollars from China to finance the construction of ships to transport minerals to the world's second-largest economy.
China goes on shopping spree in Latin America - LANKA BUSINESS ONLINE
