“Latin America’s trade with China will surpass that of the continent with Europe in two years, according to a United Nations study, with some predicting it will eventually eclipse its trade with the United States.” – as Toh Han Shih reported recently in the South China Morning Post (SCMP).
As the report continued: ‘Trade between China and Latin America grew 8 per cent to US$255.5 billion in 2012, faster than the 6.2 per cent growth of the continent’s trade with the US, according to the International Monetary Fund. [And} China is already the biggest trading partner of Brazil, Chile and Peru. Its trade with Brazil grew 10 per cent last year to US$83.3 billion, according to the Brazilian Ministry of Commerce.”
The report also highlights that: “In 2012, trade between Mexico and China grew 7.6 per cent to US$62.66 billion, according to official Mexican data. [And] Chile’s government received investment applications totalling more than US$200 million from Chinese companies in 2012, positioning China for the first time as one of the 10 largest sources of investment applications in the country, according to the Chile Investment Review, a Chilean government publication.”
Which sectors is China investment focused on in Latin America?
While Chinese investment has been diversified, the SCMP does point out a focus by “Chinese invest[ors] in [Latin America]’s energy and infrastructure sectors as rising rapidly, with more than US$550 billion of infrastructure projects in the market. A growth in Latin American procurement opportunities and liberalization of its’ energy markets has been central to this trend.
What can Latin America’s lawyers do to secure work around Chinese investment?
The pace of change in investment flows into Latin America is nothing short of staggering, requiring a re-think by Latin America’s law firms of where they should be focusing at least some of their business development and marketing energy. The US and EU, while still essential in any effort, should not continue to remain more important than the Asia-Pacific market, and in particular, China.
Some entrepreneurial Latin American lawyers are already actively seeking to attract Chinese and other Asia-Pacific companies and referral sources. A case in point is Alberto Esenaro, author of Mexican Law Blog, who frequently outlines the commercial opportunities available to Chinese companies in the Mexico energy, telecom, retail and automotive space.
Jonas Lima, Managing Partner of Brasilia-based law firm Lima & Curvello Rocha has taken a very personal approach, characterized by, among other efforts, his appearance in Hong Kong at Brazil Invest 2012, where he provided Chinese corporate executives with an in-person briefing on specific public procurement opportunities available to them in Brazil.
Research and plan before acting
But efforts like Esenaro’s and Limas’ cannot be made without first researching and identifying what opportunities exist for Chinese companies in domestic Latin American markets, while also developing a plan around how best to tailor your law firm’s services to meet the needs of Chinese clients.
After a research effort and blogging strategy is in place, a specific effort to reach out to those companies and referral sources in China must then be put in place as well. All of this must be done with informed precision so as to avoid wasted time and effort.
Broadly, these efforts would be first steps for any Latin American law firms that wish to secure work around Chinese investment. Latin America’s lawyers who make these and other well planned efforts – will build a long-term source of new business around China’s growing investment into Latin America.