People have the power to change the course of the environment” - Erika Cuéllar (Internationally awarded Bolivian biologist)

MARKETS

January 31, End Of Day

• Argentina
  • S&P MERVAL Index = 2,564,658.95 (YTD = 1.22%)
• Brazil
  • BOVESPA Index = 126,134.94 (YTD = 4.86%)
• Chile
  • S&P IPSA Chile = 3,861.33 (YTD = 6.82%)
• Colombia
  • MSCI COLCAP = 1,521.74 (YTD = 10.30%)
• Mexico
  • IPC Mexico BMV = 51,209.53 (YTD = 3.43%)
• Peru
  • S&P/BVL Peru = 29,155.92 (YTD = 0.67%)

BUSINESS

China’s Growing Influence in Latin America

China’s deepening economic, military, and political presence in Latin America is reshaping regional dynamics, presenting both opportunities and risks for governments navigating relations with Beijing and Washington.

1. Trade & Investment Growth

• In 2000, China accounted for less than 2% of Latin America’s exports. By 2021, trade surpassed $450 billion, with projections to exceed $700 billion by 2035.
• China has signed free trade agreements with Chile, Costa Rica, Ecuador, Nicaragua, and Peru; 22 countries in the region have joined the Belt and Road Initiative.
• Foreign Direct Investment from China to Latin America reached $9 billion in 2023, making up 6% of China’s total FDI.
• Chinese state banks have lent over $120 billion to Latin America since 2005, with Venezuela receiving nearly $60 billion.

2. Infrastructure & Energy Control

• China has invested $73 billion in Latin America’s raw materials sector (coal, copper, natural gas, oil, uranium) since 2000.
• More than 100 port projects globally have some Chinese ownership, including at least 12 in Latin America.
• Lithium Triangle (Argentina, Bolivia, Chile) holds 50% of the world’s lithium, attracting heavy Chinese investment.

3. Military & Security Cooperation

• Venezuela is the largest Latin American buyer of Chinese military equipment, after the U.S. banned arms sales in 2006.
• China has transferred $634 million in military hardware to Venezuela, Argentina, Bolivia, Ecuador, and Peru (2009–2019).
• Xi Jinping has visited Latin America at least 5 times since 2013; in 2023, eight Latin American presidents visited China (compared to just one in 2022 and none in 2021 or 2020).

CURRENT AFFAIRS

Peru: The government plans up to three bond issuances in 2025 to manage its growing fiscal deficit, which hit 3.6% of GDP last year. Economy Minister José Arista expects GDP growth above 3% this year, following a 3.3% expansion in 2024. Peru, the world’s No. 2 copper exporter, aims to boost mining investment, with Newmont securing local backing for its $2 billion Yanacocha Sulfuros project. Arista emphasized the need to open more copper mines to sustain long-term economic growth.

Chile: Congress approved a pension reform, fulfilling President Boric’s key promise. The bill raises employer contributions to 8.5%, increases the minimum pension, and restructures Pension Fund Administrators (AFPs). It aims to reduce inequalities, including gender gaps, while allowing new local and international pension providers. Finance Minister Mario Marcel called it fiscally responsible, acknowledging potential job losses but expecting economic growth from increased savings.

Mexico: Nestlé will invest $1 billion in Mexico over the next three years to expand production, President Claudia Sheinbaum announced. Nestlé Mexico CEO Fausto Costa called the move a sign of confidence in Sheinbaum’s government and the country’s economic opportunities. The investment will support existing plants, including a recently opened facility in Veracruz.

FURTHER READING

Check our recently published insights here. Recent post:

⚡ White Gold Rush

Latin America holds 60% of global lithium reserves, key for EVs and clean energy. While Chile leads in production, Argentina and Bolivia face investment and policy hurdles.

Challenges & Opportunities:

🔹 Soaring demand but slow production growth

🔹 Water-intensive mining threatens ecosystems

🔹 Policy shifts: Chile nationalizing, Argentina attracting investors

🔹 Global race for control, with China leading

🔹 Sustainability efforts in new extraction tech & battery recycling

⏳ A limited window to turn resources into long-term gains.

🔍 Read more here.