Chinese investment in Latin America has increased dramatically over the last decade. An article in Latin Finance points out that bilateral investment between the two areas has grown by 1,400 percent, which equals about $140bn.

The Chinese investment contribution is seen as highly important to Latin America. Pei Hua Chin of First Commercial bank said: “Our bank is looking forward to new opportunities in Latin America and to break into the market.”

In 2011 the UN published a report that showed that China had become the largest investor in the region accounting for nine percent of total overseas investment. Brazil received the most foreign investment, $48.5bn, with Mexico coming a close second. The UN’s Economic Commission for Latin America (ECLAC) stated that China’s investment for 2012 would be concentrated on natural resources extraction. In 2010 China became Brazil’s largest outside trade partner, investing $56bn.

The EU is also a major investor in Latin America. The fourth phase of its Al-Invest Regional Aid programme, which specifically channels funds into private sector developments, including chambers of commerce and export promotion agencies. Countries that have benefited from the programme include Bolivia, Mexico, Columbia, Peru and Venezuela. The programme has invested €144m, which has resulted in €500m of trade in the region.

The EU also runs the Latin American Investment Facility (LAIF) that helps governments and public organisations make investments in the area. The programme was launched in 2010 and has committed €125m up to 2013. The primary considerations for LAIF are to improve infrastructure and technology. The EU views this project as a ‘financing mechanism’ whereby grants and loans are mixed and endowed by the European Development Finance and Latin American banks.

The EU Investment Bank is a key player in Latin America. Recently the bank has committed €500m in Brazil towards renewable energy in an ambitious climate change policy. In Argentina the EIB will give €76m for VW SA to help the company modernise and expand its plant in Cordoba. The modernisation of the plant will help VW become more energy efficient and will also contribute to cutting down toxic gas emissions.

Much of the current EU finance comes under its mandate to: ‘finance operations supporting the EU’s presence in the region through direct investment and/or know-how.’