5th Latin America – China Investors Forum

The 5th Latin America – China Investor Forum was held between September 10-11, 2013 in Westin Hotel, Beijing. The event was co-hosted by LatinFinance and the Export-Import Bank of China.

The two days forum among others discussed the following topics:

The evolving China – Latin America economic relationship
Investing in Latin American debt securities
The use of RMB for trade in settlement in Latin America
China-Latin America trade facilitation
Financing infrastructure in Latin America
Opportunities for investment in Paraguay and Buenos Aires
Business relations between China and Mexico, Brazil, Argentina and the Pacific Alliance

Stuart Allen, CEO of LatinFinance said in his introduction that we are seeing an increasing and diversifying Chinese investment in Latin America (LA), there is more and more Chinese investment arriving to the manufacturing sector. We also see the increase of loan agreements with Chinese banks in LA.

Wang Jianjun, Deputy Director General of Foreign Investment Department of NDRC also stressed the diversification of Chinese outbound investment. As of today China made investments in 177 countries of the World, among which 40 countries are identified as key countries. The Chinese investment in LA reached 68 billion USD, which is 30% of the total Chinese investment. In 2012 the outbound Chinese investment to LA reached 6.17 billion that is a 6 fold increase over the 2003 figure. The investments are usually landing in the mining (copper), agricultural and manufacturing sector. The visit of Xi Jinping this year gave a huge thrust to the relations. He also pointed out that the relations need to be further institutionalized and structured. As an example he mentioned the Brazil-China Energy Committee, the Peru-China Energy and Mining Committee and the Mexico-China Senior Task Force. Former Premier Wen Jiabao made a proposal to set up a LA – China Cooperation Fund. On the Chinese To Do List, simplifying the approval procedure of outbound investment is on the top.

Zhu Hongjie, Vice President of the Export-Import Bank of China mentioned in his presentation that his bank was founded 20 years ago and is a correspondent bank for more than 30 banks in LA. In his hope the LA-China trade will become more balanced in the future as the industrial chains are being expanded. He also made the remark that there are also negative voices aired, like the Chinese investment is threatening domestic growth and that the Chinese import is endangering the local manufacturing industry.

Tang Maoheng, Chief Product Specialist, Bank of China (BOC) called the attention to language barriers and differences in political systems when doing business in LA. 24% of the revenue of BOC comes from abroad, LA being a big market for BOC. The Panama Branch was established in 1994, since then branches in Peru, Brazil and Mexico were also set up. A 1 billion USD credit line to Petrol Brazil was a major deal done recently by BOC.

Bernardo Guillamon of IDC said that the trade volume between China and LA reached 260 billion USD. More and more small and medium sized enterprises are involved in trade, Alibaba is serving as a main e-platform for trade between SMEs.

Yan Bo of Bank of China talked about the internationalization of RMB. He said that 8.4% of global trade was done in RMB in 2012. The figure is expected to rise to 10.8% in 2013. China has RMB swap agreements with 20 countries by now.

Besides exchange of ideas and information, the Forum also proved to be a good platform for meetings between Latin American and Chinese institutions and companies.