What will China bring to the Latin American decade?

As this edition of Latin Trade goes to press, Beijing authorities announced new rules allowing companies and financial institutions to move yuan offshore for investment. (The renminbi is the official name for China’s legal tender.) The easing of currency regulations, albeit on a trial basis, points to the expanding role of Chinese companies in mergers, acquisitions and joint ventures in Latin America. As a series of stories in this issue about the Chinese conquista shows, Chinese trade activity has turned into hyperactivity on the acquisition front as these companies, most of them state-run, seek operating control of projects that secure raw materials needed by a nation with a shortage of arable land, minerals and energy.
For our cover package we turned to veteran reporters José Orozco in Caracas and Ruth Bradley in Santiago, Chile, to examine the growing economic ties and associated issues. Chilean Karen Poniachik, a specialist in international affairs, contributed an analysis piece that examines whether this new relationship — hailed by so many — will usher in a new wave of progress or will turn out to be a form of 21st century neo-colonialism.
Meanwhile, the low-intensity currency war persists in the region. Chile has begun intervening to lower the value of its peso. Brazil, which first warned of the danger of a currency war as countries try to position their exports favorably, stepped up the pace of measures to curb the sharp appreciation of the real over the past two years.
The increasingly corporate ties between Latin America and China added an additional twist to the surge in mergers and acquisitions in 2010, with billions of dollars of investments in regional companies. But the biggest deal of the year fell to the companies owned by the region’s – and the world’s – wealthiest man, Carlos Slim. Slim’s América Móvil wrapped up Carso Global and Telmex International in a merger that has created the largest company in the region outside of the state-owned petroleum companies.
We know many of our readers spend days and weeks traveling throughout the region. Participants in our annual Best of Business Travel in Latin America survey weighed in about hotels and restaurants in the leading business cities around the region, as well as airlines and rental car companies. See the survey results, which include nearly 100 hotels and nearly as many restaurants.
As always, feel free to add your comments by emailing me at jbussey@latintrade.com.

Jane Bussey
Editorial Director
Latin Trade