Latin Finance - November/December 2009 - 19

latam-china flows commodities in other parts of the world, equity fund investing in SMEs – receiving financial advisory and private equity most notably Africa and Southeast Asia. between China and LatAm. His firm sees a Chinese funds via its participation as an “In Africa, we have a lot of $5 billion pipeline of such activity, focused Inter-American Investment Corporation cooperation, through trade and EPCs,” member – are a way to channel investment on agribusiness, mining, forestry and Zhu Hongjie, vice president at China infrastructure. The $100-$200 million per into the bottom of the pyramid as well as Eximbank, says. “With Latin America, I see deal M&A market is particularly strong, the top. similar opportunities as with Africa.” China has also joined the IDB’s with the crisis creating unique distressed Zhu points out that Latin America multilateral investment fund. “We’re opportunities, he says. might be more developed, meaning hoping this will spur trade in general and “This isn’t a 12-18 month trend, it Chinese investment in LatAm could not just the commodity-related trade,” is a redefinition of the global economic grow faster and come easier than it did Puig says. balance of power,” Bethel says. in Africa, though in many respects it is “They are complementary economies,” “The relationship is mutually the same. “I don’t think there are major says Gerardo Mato, CEO of global banking beneficial,” explains Steven Puig, vice differences,” he says. “There are a lot of for LatAm at HSBC, noting that a greater president at the IDB, which China similarities.” and better flow of information is necessary joined this year after several years of Given China’s checkered history in to bridge what is still a significant gap. discussion. “Even as China shifts from Africa, some LatAm market participants The two sides must develop more flows of an export-driven economy to one more worry that the partnership will be financing between them, to match less than mutually beneficial. They trade. He cites Chile’s Codelco, Chinese Bilateral Trade with Latin America ($bn) are concerned that LatAm is parting which has about 70% of its sales in Growing and balanced with raw materials at the bottom Asia, but less than 3% of financing 160 of the chain, only to buy them back coming from Asian sources. Imports from LatAm as finished value-added goods. “Infrastructure investment is 140 Also, there is also no guarantee that the logical next step,” says Alonso Exports to LatAm the demand for commodities will García Tamés, director of Mexican 120 remain at the elevated levels seen infrastructure development bank 100 this decade. Banobras. “Gradually the approach For others, the increasing flow of I’d expect to see from the Chinese 80 cash and trade sparks optimism that investors into the region would 60 as the relationship grows, LatAm be to move first through financial can draw benefits beyond simple channels and then increase 40 commodity sales. participation as direct promoters and 20 “As a first step, it’s direct developers of infrastructure understandable that China will projects.” 0 2004 2005 2006 2007 2008 emphasize investment cooperation “From an investment perspective, Source: SinoLatin Capital between governments,” says Jiang partnering with the Chinese is Shixue, professor at the Chinese really good,” says Felipe Jens, head Academy of Social Sciences (CASS). “It of infrastructure and project finance at focused on consumption, that doesn’t seems that investment contracts between imply a decrease in the need for Latin raw Brazil’s Odebrecht. “They are bringing governments are more predictable, sage money, and financing alternatives. If they materials.” and reliable.” are in our project, they really help us to Private companies will generally develop the infrastructure.” Mutually Beneficial Union? lag the government in going abroad, he Jens admits that there could be Puig says the IDB aims to channel Chinese says. Many top companies are focused competition from a construction investment into vehicles that will support on abundant domestic opportunities, he perspective. However, he claims that LatAm’s development beyond commodity explains, and the government is in a better export. The Agricultural Bank of China many more Chinese entities are using position to know about the investment local construction expertise to leverage is set to officially join the IDB’s $1 billion environment of Latin America. investment possibilities, using companies Trade Finance Facilitation Program that “The flows of capital from China to like his to mitigate risk, understanding supports regional trade finance as an Latin America are relatively small right how to work with the labor force and issuing bank, with the Bank of China now, but there is going to be a tsunami domestic regulations. already on board. of money moving from China to Latin “I think there is room for cooperation The IDB is also actively seeking funds America over the next several years,” says from other Chinese sources, and is in talks in Mexico, not only with Chinese Erik Bethel, CEO of SinoLatin Capital, companies but with all international with the China Investment Corporation which claims to be the first merchant companies,” says Mauricio Alazraki, sovereign wealth fund. This program bank focused exclusively on cross-border managing director of finance at Pemex, and others including a $150 million November/December LatinFinance 19

Latin Finance - November/December 2009

Table of Contents for the Digital Edition of Latin Finance - November/December 2009

Latin Finance - November/December 2009
Contents
Latam-China Flows
Petrobras Interview
Best Boutiques
Banks of the Year 2009
Itau Unibanco Interview
Mexico: How to Capitalize on Crisis
Colombia: Local Shop Repels Foreign Pretenders
Chile: Pefecting the Art of Retail
El Salvador: A Foreign-owned Bank Dominates
Infrastructure & Energy Awards
Private Equity Fundraising
Latin Finance - November/December 2009 - Latin Finance - November/December 2009
Latin Finance - November/December 2009 - Cover2
Latin Finance - November/December 2009 - Contents
Latin Finance - November/December 2009 - 2
Latin Finance - November/December 2009 - 3
Latin Finance - November/December 2009 - 4
Latin Finance - November/December 2009 - 5
Latin Finance - November/December 2009 - 6
Latin Finance - November/December 2009 - 7
Latin Finance - November/December 2009 - 8
Latin Finance - November/December 2009 - 9
Latin Finance - November/December 2009 - 10
Latin Finance - November/December 2009 - 11
Latin Finance - November/December 2009 - 12
Latin Finance - November/December 2009 - 13
Latin Finance - November/December 2009 - 14
Latin Finance - November/December 2009 - 15
Latin Finance - November/December 2009 - 16
Latin Finance - November/December 2009 - 17
Latin Finance - November/December 2009 - Latam-China Flows
Latin Finance - November/December 2009 - 19
Latin Finance - November/December 2009 - 20
Latin Finance - November/December 2009 - 21
Latin Finance - November/December 2009 - 22
Latin Finance - November/December 2009 - 23
Latin Finance - November/December 2009 - Petrobras Interview
Latin Finance - November/December 2009 - 25
Latin Finance - November/December 2009 - 26
Latin Finance - November/December 2009 - 27
Latin Finance - November/December 2009 - Best Boutiques
Latin Finance - November/December 2009 - 29
Latin Finance - November/December 2009 - 30
Latin Finance - November/December 2009 - 31
Latin Finance - November/December 2009 - Banks of the Year 2009
Latin Finance - November/December 2009 - 33
Latin Finance - November/December 2009 - 34
Latin Finance - November/December 2009 - Mexico: How to Capitalize on Crisis
Latin Finance - November/December 2009 - 36
Latin Finance - November/December 2009 - 37
Latin Finance - November/December 2009 - 38
Latin Finance - November/December 2009 - Colombia: Local Shop Repels Foreign Pretenders
Latin Finance - November/December 2009 - Chile: Pefecting the Art of Retail
Latin Finance - November/December 2009 - 41
Latin Finance - November/December 2009 - 42
Latin Finance - November/December 2009 - El Salvador: A Foreign-owned Bank Dominates
Latin Finance - November/December 2009 - 44
Latin Finance - November/December 2009 - 45
Latin Finance - November/December 2009 - 46
Latin Finance - November/December 2009 - 47
Latin Finance - November/December 2009 - 48
Latin Finance - November/December 2009 - 49
Latin Finance - November/December 2009 - Infrastructure & Energy Awards
Latin Finance - November/December 2009 - 51
Latin Finance - November/December 2009 - 52
Latin Finance - November/December 2009 - 53
Latin Finance - November/December 2009 - 54
Latin Finance - November/December 2009 - Private Equity Fundraising
Latin Finance - November/December 2009 - 56
Latin Finance - November/December 2009 - Cover3
Latin Finance - November/December 2009 - Cover4
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