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China picks Brazil as springboard for investment in Latin America

MACAU HUB

When looking at Latin America, China has historically focused its foreign direct investment in Venezuela. In recent years, however, Venezuela has fallen into major economic depression as a result of poorly crafted public policies and heavy dependency on crude oil exports in a depleted global oil market. In this adverse environment, China began diversifying its investments in Latin America and chose Brazil as one of the main destinations for foreign direct investment in the region.

The search for a trading partner with a more diversified economy comes as a result of China’s economic shift from the largest importer of raw materials to a major investor in more complex industries. Manufacturing, logistics, and technology have attracted more attention in China in recent years than the base infrastructure segment did. Even in the absence of a severe economic depression, Venezuela does not constitute a versatile partner; the nation’s economy has revolved around crude oil production for decades.

 

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