Reuters, Jun. 25, 2018 – Credit risk rating agency Moody’s said China’s investments in Latin America should continue to expand in the coming years due to the high quality of raw materials, infrastructure needs, and favorable demographic trends in the region. From 2003 to 2016, Chinese investment totaled US$ 110 billion.
In a report, Moody’s pointed out that Chinese investments in Latin America were initially aimed at natural resources, and that over the years they have become highly diversified, ranging from raw materials to services, including financial services.
Moody’s data show that between 2005 and 2016, China lent around US$ 222 billion to Latin America and the Caribbean, with Brazil receiving 53%, of which half went to infrastructure projects and a third for energy projects.
In Brazil, most Chinese investments are via bank loans to finance mainly infrastructure, energy and mining projects. “The investments reflect an interest in expanding the growth of Chinese companies in Brazil, as well as in trade between both countries.”
“Although Chinese investments represent a diversification in funding for Latin American countries, for large economies such as Brazil, they should not give a substantial boost to economic growth, although this may occur at the regional or state level,” said Moody’s director for corporate finance in Latin America, Marianna Waltz.