Can LatAm boost Chinese Investments?

Jul 1, 2011

Chinese companies want to invest in Latin America, but access to cheap financing can be an uphill struggle.

by Günther Hamm
China has moved into LatAm in a big way, with over $15 billion invested there in the past years. But that amount would be much greater if Chinese companies investing in the region could gain better access to low-cost government financing.

Chinese companies are interested in purchasing equity stakes, taking on build-operate-and-transfer (BOT) projects and building long-term investments but they need funding to carry these ambitions forward.

Chinese buyers involved in other regions outside of LatAm typically have access to cheap financing, provided by governmental banks like the Export Import Bank of China (Eximbank) and China Development Bank (CDB). But that form of loan generally requires a sovereign guarantee, which many LatAm countries are reluctant, or even forbidden, to provide.

China Eximbank and CDB are the most important lending organizations...

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