In recent years, Chinese investment in Chile has shown important growth. That raises an interesting question: what are the industries that are most attractive for Chinese companies to invest in Chile?
First, the acquisition of existing assets in the energy sector is the fastest way for Chinese companies to grow in size and global market share. An example of this is the recent acquisition of Chilquinta by State Grid for more than US$2,300 million. The energy sector is also attractive to Chinese companies because of Chile’s favorable conditions for the development of non-conventional renewable energies and the potential of the transmission portfolio.
Second, Chile’s infrastructure concessions model, which is relatively new and unusual for Chinese companies, stands out. The Ministry of Public Works currently has an ambitious portfolio of concessions, representing a total investment of more than US$14,000 million in 2020-2024, which is very attractive to Chinese companies. Another point to bear in mind is that China has surplus production capacity in traditional industries related to infrastructure and construction, which overseas operations can help to reduce.
Third, there is the agribusiness and food sector. Given China’s important food security challenges in the interior of the country, there is great demand for natural and high-quality foods. Moreover, the free trade agreement between Chile and China has led to an important increase in bilateral economic relations. Insofar as there is broad trade, this could generate potential investments in a second stage.
Finally, in the global services sector, Chile stands out as the digital hub for Latin America, offering a high level of technological and telecommunications infrastructure as well as digital and creative talent, among other factors. These characteristics can be of interest to China’s cloud providers, creative industries, and other technology companies. This is borne out by Huawei’s investment of US$100 million in a data center in Chile, followed a few days ago by its announcement of a second center in Chile to reinforce the region’s digital transformation. Similarly, the Didi and Mobike applications, among others, operate in Chile.
In light of this, and despite the crisis, I believe that Chile will continue to be an attractive destination for Chinese investment in the four sectors mentioned, which are of the greatest interest to Chinese companies. This country continues to show factors that give it important growth potential.
Source: Diario Financiero
To learn more about investment opportunities in Chile, see this article.