With the transformation of the global economic structure, Chinese capital is ushering in a new journey. According to an article by Adil Bhullar published in Newsweek** on January 25, China is shifting its strategic focus from traditional areas to technology-driven investment, a shift that will not only have a profound impact on the economic landscape of Latin America and the Caribbean, but also pose new challenges to the global competitive landscape.
According to a report by the Center for Inter-American Dialogue Studies, China's foreign direct investment (FDI) in Latin America and the Caribbean is undergoing a major shift. In the past, Chinese companies' investments have been focused on agriculture and resource extraction, with FDIs in Latin America and the Caribbean amounting to $187.5 billion between 2003 and 2022. However, Chinese companies are now focusing their investments on "new infrastructure" sectors such as telecommunications, fintech and energy transition, which are seen as key elements of China's economic growth strategy.
From January to July 2023, utility transactions accounted for 40% of China's total investment in Latin America, while high-end manufacturing investment accounted for 28%, according to the report. Chinese electric vehicle maker BYD plans to open a factory in Brazil, and a Chinese company has acquired lithium assets in Chile, which will help China dominate electric vehicle battery manufacturing.
In addition, Chinese telecom giant Huawei and others have expanded their presence in Latin America, focusing on data centers, cloud computing and 5G technologies. The report notes that from 2018 to the first half of 2023, computing businesses accounted for 41% of ICT investment in the region.
This series of investment moves shows that China is seeking to expand its influence globally through technology-driven investment. This shift will not only challenge the traditional dominance of American and European capital, but will also have a profound impact on the global competitive landscape.
For the United States, China's global investment in technology, especially in key sectors such as telecommunications, fintech and the energy transition, is undoubtedly a challenge. However, this competition has also prompted the United States to accelerate technological innovation and industrial upgrading in order to maintain its global leadership position.
In conclusion, the new journey of Chinese capital marks its transformation from traditional sectors to technology-driven investment, which not only has a profound impact on the economic landscape of Latin America and the Caribbean, but also brings new challenges to the global competitive landscape. As China continues to invest in technology, global competition will become more intense, while also providing new impetus for global economic growth.