Asia-Latin America investments: China’s short attention span
Energy and commodities focus persists; Growing frustration on Latin side
Latin America’s hopes for a deeper and broader commercial relationship with China are in the balance, according to senior bankers, regulators and company officials attending a Latin America Chinese Investors Forum in Beijing last month. Chinese companies and investors have predominantly viewed Latin America – and Brazil in particular – as a rich source of natural resources but there has been little investment in other Latin American securities.
"There has been lots of noise about China and Latin America but as yet the deal flows are not feeding through – it’s the tip of the iceberg argument," says Gerardo Mato, HSBC’s chief executive of global banking, Latin America, and head of global capital financing, Americas. "I think we have about three years – if the volumes haven’t materialized in that time, then I think attention will move on to look elsewhere."
Although there has been an increase in foreign direct investment, estimated to have increased tenfold in the six years leading up to last year, when China became the region’s biggest inward investor, at flows worth $10 billion, Mato says HSBC hasn’t see that materializing into investments and that is leading to "frustration on the Latin American side".