ABSTRACT
China is not only competing with the United States in Latin America but also with Europe. Beijing has displaced Europe as the second most important trade partner of Latin America, and in some countries it has even become the most important trade partner. But, European foreign direct investment (FDI) is still much more important in Latin America than Chinese FDI. However, China is expanding and diversifying its investments in the region. In the future, Chinese companies might compete more with European companies in key economic sectors. Europe should not overestimate the weight and influence of China. For historical reasons, Europe’s links with Latin America are deeper and broader than China’s. Moreover, there is increasing disenchantment with China in the region. From this perspective, Europe is perceived as a counterweight. Europe should take the Chinese challenge in Latin America more seriously, and the European Union should engage more with Latin America and develop a clear strategy. It should compete with China but also look for synergies.
