What should Latin America do to capture a significant share of China long term financing opportunity?
First, before regarding Chinese FDI to Latin America, it is important to identify if the two regions compete for FDI. As specified elsewhere, the evidence of FDI competition between Latin America and China is not straightforward . Although competing in the same sectors as China can increase the likelihood of FDI competition (e.g. Mexico or Colombia), this is not the most significant factor explaining FDI flows. Latin America should focus on other factors for attracting Chinese investment in the region. Second, it is important to notice that Latin America and China differ significantly in their FDI-attraction strategies. Whereas in China the wide availability of capital, coupled with very high productivity growth levels explain FDI attraction, Latin America’s main interest for investors continue to be higher returns and natural resource availability. Moreover, macroeconomic and institutional stability have proven important for attracting FDI, in Latin America or elsewhere. In spite of t
