US and Chinese Foreign Direct Investments in Latin America. A proposal for reclassification of data on FDI

Much ink has been spilled in the last 20 years – both in and outside the scholarly community – on the booming political and economic relationships between China and the countries of Latin America, two regions that prior to the turn of the century had limited interaction. The events of 2001 and 2008 were crucial for China's penetration into Latin America: in 2001, the downsizing of the US focus on the subcontinent because of the new terrorist threat was coupled with a growing Chinese interest in the region in the wake of Beijing's entry into the WTO. Seven years later, the financial crisis had made it necessary for the United States to focus on its domestic sphere, allowing Latin American countries to see in China a new window of opportunity that Washington could no longer guarantee. Chinese imports of food and agricultural products have since been matched by important financial interactions. While a substantial body of scholarly literature has emerged on both Latin American commodity export dependence and the determinants of the US and Chinese overseas foreign direct investment (OFDI), still little effort seems to have been made to systematically analyze how OFDI vary according to the different Latin American domestic regimes. While the broader objective of my study will aim to fill the research gap by analyzing US and Chinese FDI (1990-2020) in Chile and Bolivia – representative of diverging political economy trends –, with a focus on the mining sector, the present paper will focus on a proposal for reclassification of data on FDI. In order to overcome the distortions of traditional FDI data, this paper will in fact combine statistics provided by entities such as IMF, OECD and UNCTAD with an analysis of company-level transactions, regarding both M&A and “Greenfield” investments.