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Introduction to Overseas Markets:Latin America

Latin America, as a geopolitical concept, refers to the American regions to the south of USA. It neighbours the Caribbean Ocean and the Atlantic in the east. The closest distance between Latin America and Africa continent is about 2494.4 kilometres. It is approximate to the Pacific in the west. It faces the Antarctica in the south across the Drake Passage. USA is its northern neighbour with the Bravo River as the boundary for Mexico and USA

Latin America is usually divided into four parts: Mexico, Central America, South America and West Indies. There are 33 countries and some non-independent regions.

Geographically Mexico belongs to North America. But as it was Spanish colony, it is one country in Latin America given its race, culture and history.

Central America refers to the narrow land between the southern Mexico and the middle of America continent in the northwest of Columbia. The land area in total is 540 thousand square kilometres. It includes seven countries, that is, Belize, Costa Rica, Salvador, Guatemala, Honduras, Nicaragua and Panama.

With an area of 17.97 million square kilometres, South America consists of 12 independent countries (Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Guyana, Paraguay, Peru, Surinam, Uruguay and Venezuela) and the French Guyana. Brazil has the largest territory of around 8.55 million square kilometres, making up one half of South America’s total land.

West Indies composes of Greater Antilles, Lesser Antilles and Bahamas. The geographical feature is a curve from the north to the south. West Indies is connected with the northern coast of South American land and the eastern coast of Central America, thus forming the Caribbean Ocean. The major countries include Dominica, Cuba, Haiti, Jamaica, etc.


    FDI flows to Latin America and the Caribbean – excluding the Caribbean offshore financial centres – registered little change, as significant declines in the region’s largest recipient – Brazil – and in Colombia were offset by increases in Mexico and Argentina. Slowing domestic demand and a worsening of the terms of trade caused by plummeting commodities prices hampered FDI flows. Net cross-border M&As sales registered a significant retreat (down 53 percent), largely due to a sizeable telecommunications divestment in Brazil.


Three quarters of Latin America is within the tropical zone. And it enjoys the most pleasant climate in the world. The average temperature is above 20 degree centigrade throughout the year, keeping this continent comfortably warm. It is not as cold as the southern America, nor as hot as Africa. The annual rainfall in Latin America is over 1342 millimetres, 3.2 times than that of Oceania. Therefore it is the moistest continent in the world.

Many areas in Latin America have a temperate climate with abundant rainfall, nutritious soil and diverse agricultural products. The major grains are rice, wheat and corn. The cash crops include cane, coffee, banana and cotton. Its production of sugar accounts for one quarter of the world’s total. This has earned the Caribbean Sea area the name of “world factory of sugar”. Cuba is the biggest sugar exporter in the world. The production of coffee by Latin America has exceeded that of Africa. Over 60% of coffee in the world market comes from Latin America. Ecuador is the largest banana exporter in the world. Honduras, Panama and Guatemala also export a large quantity of banana. The production of cotton is increased rapidly and many countries export cotton, with Brazil and Mexico as the largest two exporters. Moreover, Latin America enjoys a large area of forests and rich coastal fishery resources. Peru is one of the world-famous coastal fishing grounds.

Latin America has many rivers which intersect with one another. Those big rivers are mainly in southern America. Latin America has high rainfall. Regions with an annual rainfall of over 1000 millimetres make up 70% of the continental areas. Further accumulated by the snow water from the Andes Mountain, it enjoys a hydropower of 467 million KW, making up 16.9% of the world’s total. Brazil has a hydropower of 213 million KW. The explored water resource in Latin America takes up 3.6% of the world’s total, derived from the major branches of the Amazon River, Parana River, Sao Francisco River, Orinoco River, etc.

Latin America enjoys abundant minerals, including over 20 kinds of minerals for modern industries. It leads the world in terms of reserves of some minerals. Mexico has an explored oil reserve of 10.3 billion tons. The oil reserve of Venezuela is over 8 billion tons. Both rank top in the world. The explored natural gas reserve in Latin America is about 3 trillion cubic metres, mainly distributed in Mexico and Argentina. The total reserve of iron ore is about 100 billion tons. And Brazil is the second largest producer and exporter of iron in the world. The reserve of copper in Latin America is over 100 million tons in total. Chile ranks second in the world for its reserve of copper and Peru ranks fourth. Latin America’s coal reserve is about 50 billion tons, mainly distributed in Columbia and Brazil. Columbia alone has a coal reserve of over 24 billion tons. Besides, Brazil is famous for its beryllium, tantalum and niobium. Surinam and Jamaica produce a large quantity of bauxite. Mexico is known for its silver and sulphur, Chile for its saltpetre, Cuba for its nickel and Columbia for its emerald.

Latin America and the Caribbean region have long coastal lines and are surrounded by two oceans in the east and the west. Moreover, they face the Mexican Gulf and Caribbean Ocean. As a result, the fishing resources are very rich with many natural fishing grounds, for instance, the coasts of Peru, Chile, Brazil as well as the Mexican Gulf and the Caribbean Ocean. These internationally-known grounds breed sardine, tuna, bass, mackerel, codfish and different shrimps. Moreover, Latin America also breeds fresh water fishes, with over 2500 or 3000 categories.

PROMEXICO www.promexico.gob.mx

Fundacion Invertir Argentina www.invertir.com

Brazilian Trade and Investment Promotion Agency www.apexbrasil.com.br

Foreign Investment Committee www.foreigninvestment.cl

 
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