The socioeconomic geography of Chinese outward foreign direct investment in Latin America

Abstract

This article examines the spatial pattern of Chinese outward foreign direct investment (OFDI) to Latin America and socioeconomic determinants that affect the attractiveness of Latin America for Chinese capital. I also treat Latin America as a political stage between Mainland China and Taiwan in the diplomatic competition. This research examines recent shifts of Chinese OFDI strategies into the Global South and China’s rising political power in the global capital network. This article consists a brief review of the role of foreign investment for both sending and receiving countries, a cartographic analysis of Chinese OFDI in Latin America, a statistical modeling of socioeconomic determinants of Chinese OFDI in receiving countries, and a set of country-specific vignettes of new features in Chinese OFDI. This research unveils several new trends associated with Chinese OFDI to Latin America: first, Chinese OFDI tends to transform from a resource-focused to a market-focused player; second, Chinese OFDI establishes a more diverse sectoral structure; third, Chinese investors tend to avoid investing into Taiwan’s diplomatic allies. Policy implications and concluding thoughts are placed as the finale for this research.