Analysis On FDI In Latin America And The Caribbean Area

In recent years, more and more countries have adopted favorable policies to attract FDI inflows, considering that FDI inflows can promote the economy development and productivity. Latin America and the Caribbean is no exception. Since the 1990s, FDI flows in this region appear unprecedented growth. However, since 2000, FDI flows begin to decline. Till 2003, it became the worst area to attract FDI in the world. The global financial crisis triggered by U.S. gave the region a heavy blow. However, FDI inflows in China keep among the developing countries in 11 consecutive years. The competitiveness of China in international investment market made Latin America and the Caribbean feel threatened. In this background, the status quo of FDI in Latin America and the Caribbean and the relationship of FDI between the two areas have become the focus of the attention of government and academic world.The thesis use the FDI data in Latin America and the Caribbean from UNTCAD and ECLAC to analysis the whole FDI ratio and the distribution of FDI in sub-regional and industry from 1999 until 2009. The results are as follows:the FDI level in Latin America and the Caribbean is low and the ability to withstand financial crisis of this area is weak. South America and Brazil, Mexico in the region is the main sub-regional and national identity for FDI respectively. Service, manufacturing and natural resources is the mainly distribution industries for FDI. The natural-resource-seeking FDI is concentrated in South America, and Manufacturing and services distribute in Brazil and Mexico. Because of the financial crisis, the efficiency-seeking FDI in Mexico has greatly decreased, and the market-seeking FDI in South America has a little impact.Through the comparative analysis between the two areas, the thesis finds out that since 2003, Latin America and the Caribbean becomes the second-largest region of the FDI from China, which keeps a growing trend. This shows that China is not the risk factor for Latin America and the Caribbean to attract FDI. In addition, the similarities in regional distribution and differences in industry distribution of FDI make the possibility of win-win cooperation increased.On the above basis, this thesis finally revealed the main conclusions, and put forward some suggestions to improve the investment environment and policy, and then to strengthen mutual cooperation.