“New Infrastructure”: Emerging Trends in Chinese Foreign Direct Investment in Latin America and the Caribbean
Security Theme
State Stability and Infrastructure
Keywords
Critical Infrastructure, China, Latin America, Huawei, ICT, Energy Sector, Caribbean
Description
Over the past two decades, China's foreign direct investment (FDI) in Latin America and the Caribbean (LAC) has significantly impacted sectoral growth, primarily in South America's largest markets. Although Chinese FDI in LAC from 2003 to 2022 totaled $187.5 billion, it remains below U.S. and European FDI during the same period. The dynamics of Chinese investment in the region are evolving, with a recent decline in value from an average of $14.2 billion per year (2010-2019) to $6.4 billion in 2022. This decrease is not indicative of waning interest but rather reflects a strategic shift by China's government and companies. While pursuing more engagement with LAC, Chinese investments are now characterized by smaller deals in frontier sectors aligned with Beijing's economic growth objectives. Traditional large-scale infrastructure projects under the Belt and Road Initiative are giving way to a focus on innovation, including information and communication technology (ICT), renewable energy, and emerging industries, aligning with China's economic upgrading and global competitiveness goals. The report highlights significant changes in LAC's innovation-related industries, emphasizing computing infrastructure and fintech services over ICT equipment and devices.
“New Infrastructure”: Emerging Trends in Chinese Foreign Direct Investment in Latin America and the Caribbean
Over the past two decades, China's foreign direct investment (FDI) in Latin America and the Caribbean (LAC) has significantly impacted sectoral growth, primarily in South America's largest markets. Although Chinese FDI in LAC from 2003 to 2022 totaled $187.5 billion, it remains below U.S. and European FDI during the same period. The dynamics of Chinese investment in the region are evolving, with a recent decline in value from an average of $14.2 billion per year (2010-2019) to $6.4 billion in 2022. This decrease is not indicative of waning interest but rather reflects a strategic shift by China's government and companies. While pursuing more engagement with LAC, Chinese investments are now characterized by smaller deals in frontier sectors aligned with Beijing's economic growth objectives. Traditional large-scale infrastructure projects under the Belt and Road Initiative are giving way to a focus on innovation, including information and communication technology (ICT), renewable energy, and emerging industries, aligning with China's economic upgrading and global competitiveness goals. The report highlights significant changes in LAC's innovation-related industries, emphasizing computing infrastructure and fintech services over ICT equipment and devices.
