What are Japan, South Korea and China looking for in Latin America?


What are Japan, South Korea and China looking for in Latin America? The three Asia Pacific countries have been investing in Latin America for decades, but have different goals. Dr. José León Manríquez clarified the relationship between the Asian countries and the Latin American continent.

First was Japan, a little later South Korea and more recently China. In that order, the countries of the Asia-Pacific region began to invest in Latin America. In the 1960s, Japan’s interest was aroused, focusing on one country in particular: Mexico. The nation became, thus, recipient of capital for the auto industry, receiving initially Nissan.

South Korea approached the region in the 1980s and its first objective was the development of the textile industry in Central America, more specifically in Guatemala and El Salvador, but the real expansion came in the 1990s when the two countries “decided to take advantage of the signing of the North American Free Trade Agreement and use Mexico as a platform for exports to the United States from a country with relatively low wages.”

Dr. José León Manríquez, from the Autonomous Metropolitan University of Xochimilco, explained this. The academic, who participated in the ALADI Latin American and Asia Pacific Observatory seminar in Montevideo, said that China came on the scene only in the 2000s.

To differentiate Chinese investment from other Asian countries in Latin America, the expert points out that “Chinese companies began to invest from 2000 and are concentrated mainly not in the manufacturing sector, but in the extraction of raw materials, especially in minerals and oil.”

The importance of Latin America to the Chinese national strategy seems evident, taking into account the dependence of the Chinese economy on energy resources.

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“In Venezuela and other countries, such as Brazil and Argentina, Chinese investments in the area of ​​natural resource extraction have also been increased,” said the expert, who highlighted the growing role of the Asian giant in the Latin American economy.

The Japanese and South Korean investments come from privately owned small business conglomerates throughout Latin America to mediate the production process. It is worth mentioning that South Korea has more than 1,000 companies of different sizes, said Manríquez.

The expert sees a coexistence of Asian countries in the Latin American continent, as China, which arrived shortly thereafter, invests in a completely different area from which it receives Japanese and South Korean investments, and are not in themselves competitors.

Looking at the Mexican situation, South Korean and Japanese investments create jobs and increase exports to the United States, but they do not help improve real GDP per capita indicators and do not accelerate economic development. The Chinese exploitation of natural resources is responsible for economic surpluses.

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