China is investing seriously in Latin America. Should you worry?

From left: Hugo Martinez Foreign Minister of El Salvador, Foreign Minister of Gilido Munoz of Chile, and Foreign Minister of Wang Yi attended a press conference in China and a community forum in Latin America and the Caribbean, held in Santiago, Chile. (Reuters)

Last week, China held the second Ministerial Conference in Santiago de Chile and the Latin America-Caribbean Community (CELAC). China announced plans to invest the "Belt and Road Initiative" (BRI), a "belt and road" economic development plan in Latin America. In the past decade, China's policy

In recent years, China has expanded its economic and diplomatic influence to Latin America. In desperate geopolitical struggle with primitive natural resources, China expanded its trade with this region. Currently, China is Brazil's largest trading partner and is the largest mineral consumer in Peru, such as gold and copper. A revolutionary change takes place, which makes China a rudimentary participant in Latin America. In January this year, President Xi Jinping of China promised to invest $ 250 billion in Latin America over the next decade. This enormous investment will undoubtedly benefit Latin America as a whole.

We are pursuing 'standard' investment from US manufacturer. If this trend continues and there are few signs that it is not the case, China (eventually the countries of Eastern Europe, Russia, India, Latin America etc.) is approaching the background. The decline in these revenues is accompanied by an increase in pressure from US administrators from US capital market institutions. Stress is financial performance, usually short-term performance. But in many cases (as well as past experiences of automobiles, machine tools, consumer electronics and memory chips) today's higher earnings can only be purchased through lower investment and market share, lowering competitiveness tomorrow. As product differentiation diminished, scale expanded, economies of scale improved, return

In Latin America there are huge investment opportunities, attractive risk levels, higher returns than local markets, and a huge population base for income growth. Since there are no investment opportunities in the domestic market, foreign investors are no longer seeking transactions in Latin America - now, in this region, rapid consumption growth, urbanization, digitization are proceeding. In fact, according to the message of the Gemdale Capital International Emerging Markets Index, the ROI for Latin America is much better than the return on emerging markets. However, acquisitions in Latin America require special attention and bring regional specific difficulties.