PwC Report: Nearly 60% of Chinese companies plan to increase their investment in the Latin American market in the next 3 years.

On November 3, PwC and the HKU Business School jointly released a report titled "Harnessing Strength and Setting Sail: Prospects for Growth - A Study of Chinese Investment in Latin America". The report reveals that due to vast market prospects and strong economic growth, Colombia, Peru, Mexico, and Brazil have become popular investment destinations for Chinese enterprises in the Latin American region. Currently, more than half of the companies that have entered the region have achieved profitability, and nearly sixty percent of the surveyed companies plan to further increase their investments in the next 3 years, demonstrating strong confidence in the long-term development of the Latin American market. In recent years, Latin America has accelerated its energy transition and new industrialization process, showing development potential in many areas. China-Latin America cooperation has achieved fruitful results in trade, scientific research, and cultural tourism, setting an example of South-South cooperation and bringing new opportunities for Chinese enterprises entering the Latin American market. The PwC China Global Cross-Border Services team conducted this survey from August to October this year, covering a total of 48 Chinese enterprises operating in Latin America across industries such as manufacturing, construction, energy/chemicals, transportation/storage, and more. The results show that almost all surveyed companies are conducting business activities in Colombia, with Peru (69%), Mexico (67%), and Brazil (63%) also being popular investment destinations for Chinese enterprises. Over seventy percent of the surveyed companies have established regional headquarters in Latin America, with the main locations being Colombia (46%), Brazil (43%), and Mexico (26%). Half of the companies use a dual-headquarters or multiple-headquarters structure to enhance decision-making efficiency and local response capability. In terms of business performance, half of the companies operating in Latin America have achieved profitability, mainly in Chile (76%) and Mexico (69%). Nearly sixty percent of the surveyed companies plan to increase investment in Latin America in the next 3 years, indicating that Chinese enterprises still maintain confidence in investing in Latin America, especially in Chile (76%), Argentina (73%), and Mexico (72%). The survey shows that the most common risks identified by the surveyed companies are the complex and time-consuming government approval process (56%). Additionally, foreign exchange control (50%) and insufficient local policy stability (46%) are also major policy risks that concern investors. In terms of market risks, investors mainly focus on market competition, operating costs, and market access issues. Regarding operational challenges, insufficient understanding of local laws and regulations (71%), lack of international talent (46%), and insufficient experience in international operations and management (38%) are the top three operational challenges faced by companies in Latin America. It is reported that Latin America is a natural extension of the "21st Century Maritime Silk Road" and a key force participating in China's Belt and Road Initiative. Bilateral trade between China and Latin America has maintained high-speed growth for 7 consecutive years, reaching a total of $518.5 billion in 2024, a historical high. China has become the second-largest trading partner of Latin America and the largest trading partner of countries such as Brazil, Chile, and Peru.