With USD2.1trn in foreign reserves, China has approached the global financial crisis as a tremendous buying opportunity, providing private equity investors in Latin America with a great
With USD2.1trn in foreign reserves, China has approached the global financial crisis as a tremendous buying opportunity, providing private equity investors in Latin America with a great exit opportunity, according to SinoLatin Capital chief executive Erik Bethel.
This year, China could invest between USD150bn and USD180bn in overseas transactions, an increase of over 200 per cent from 2008’s record of USD50bn.
A white paper by SinoLatin says the relationship between China and Latin America has changed dramatically, with the recent speed and scale of trade over the past several years catching many analysts by surprise.
Trade between the two regions rose from USD8.5bn in 1995 to USD140bn last year. Today China is Latin America’s second largest trading partner, Brazil and Chile’s largest export market, and the second largest market for Peru.
The paper states that as the global economic crisis continues to hinder the ability of PE firms to exit their investments in the western hemisphere, China’s strong capital position and interest in the region offers a viable option.
Sectors that lend themselves to Chinese investment are natural resources and infrastructure, including railways, utilities and ports. The financial services industry is another sector of growing interest to Chinese investors.
