Latin American infrastructure ripe for Chinese investment

Infrastructure is what most of us take for granted – roads, utilities, airports, healthcare sites and educational facilities.

In Latin America, where governments face the age-old problems of budget deficits and strained public debt markets, the trend over the past few decades has been to depend more and more on foreign investment to improve the amount and quality of such infrastructure. It is in this area that China could step into the market, especially given recent policy decisions which smooth the way for investment in infrastructure.

China has not traditionally been a major foreign investor in the region, with its US$22 billion per year paling in comparison to the European Union’s US$620 billion. However, according to official Chinese data, Latin America accounts for about one quarter of China’s total overseas investment. Recent major Chinese investments include billions for Venezuela’s transportation and telecommunications sectors, as well as Brazil’s aviation, rail and shipping industries.

Samantha Hu and Chad Purdie are associate attorneys at law with Diaz Reus & Targ.