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Chinese Investment in Latin America: Sectoral Complementarity and the Impact of China’s Rebalancing
Author:
Ding Ding
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,
Fabio Di Vittorionull

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Ana Lariaunull

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Yue Zhou
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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 160
Language:
English
Publication Date:
07 Jun 2021
DOI:
https://doi.org/10.5089/9781513573342.001
ISBN:
9781513573342
ISSN:
1018-5941
Pages:
31
Keywords:
FDI flow; overseas investment; ding ding; China-LAC investment linkage; investment behavior; Foreign direct investment; Comparative advantage; Electricity; Real effective exchange rates; Exports; Caribbean; Global; Asia and Pacific; North Africa; Central Asia
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Over the last decade China’s investment in Latin America and the Caribbean (LAC) has increased substantially in volume and become more diversified from natural resources to other industries. Using cross-border mergers and acquisitions data, we demonstrate that since mid-2010s China’s overseas investment has tilted toward sectors where China has a comparative advantage in the global markets, a trend similar to that of other major foreign direct investment (FDI) source countries. Moreover, China’s rising overseas investment can be linked to the rebalancing of Chinese economy, and LAC stands to benefit from its complementarity vis-à-vis China in sectors where the rising Chinese overseas investment can be met with LAC’s own investment gaps. The COVID-19 pandemic could have a long-lasting impact on global value chains and FDI flows, which poses both challenges and opportunities to LAC in attracting FDI, including from China, to support the region’s long-run economic development.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2021: Issue 160