Finance in China and Latin America (中国和拉美国家的交易)

I mentioned in passing in my Intro to this blog that as part of my job for the firm I'm working for, I do research and work with Latin American clients who are looking to do business in China, and conversely, work with Chinese clients who want to acquire Latin American companies, or start new venture capital deals.

Recently, there's been a lot of press about how China is trying to push for a global currency, which was quickly denounced by U.S. officials.(http://news.yahoo.com/s/ap/20090325/ap_on_re_as/as_china_global_currency)

But China has not stopped here. In a recent article in the China Daily News (http://www.chinadaily.com.cn/china/2009-03/31/content_7635007.htm) China has pushed for a $10 billion swap in Chinese and Argentinean currencies where Argentina no longer has to pay China in dollars but now in yuans. This allows Argentina to get rid of adminstrative steps necessary to change from its pesos to dollars, gives it access to hard currency, and shores up liquidity.

This deal was announced in Medellin, Colombia at the Inter-American Development Bank meeting. Argentina is the first country China has made this kind of deal with but is only the second largest economy in LA as Brazil boasts the most trade with China, currently making up about 40% of LA's trade with China.

China's presence in Latin America is growing. From the mineral resource industry where China is looking to buy inordinate amounts of resources, especially in Peru and Chile, to how best use newly discovered minerals in Brazil to combat climate change (check out this piece from February in the Financial Times on minerals found in Brazil's 'terra preta do indio' http://www.ft.com/cms/s/2/67843ec0-020b-11de-8199-000077b07658.html)

So it goes without saying that being involved in these merger and acquisition deals is highly relevant today. Tentatively, the Chinese government has so far released relevant guidelines that touch on what it hopes to achieve with this deal in LA.

For now, though, as Brazilian officials are responding to how China's role in the region will emerge in the future, a gente tem que ver o que é que vai acontecer.