A Financial Times article from today outlining some of the problem Latin America (read that to mean Venezuela, Bolivia and Ecuador) are having in attracting foreign investment because of their political volatility.   I’ve clipped it 2/3 of the way down where the article it talks about China’s current view on investing in Latin America and how China is ticked off over the Ecuador windfall tax on oil.  The full article is available at the URL below.

Source: http://www.euro2day.gr/articlesfna/52164930/

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Pace of investment disappoints Latin America

By Geoff Dyer and Richard Lapper in São Paulo
Published: 20/12/2007 | Last Updated: 20/12/2007 23:05 London Time

[2/3 down in the article] ……………… China's relations with many Latin American countries are less mature than those it has in Africa, where China started building up a heavy diplomatic presence in the 1960s.

Many diplomats believe geopolitics offers part of the explanation. "In Africa, it is relatively easy for the Chinese to build up a large political presence because the region is so neglected," says Rubens Barbosa, a former Brazilian ambassador who runs an advisory firm in São Paulo. "But the Chinese still see Latin America as an area of US influence."

Such considerations affect China's relationship with Venezuela, diplomats say. With an eye on future oil deals, China has agreed to invest $4bn in infrastructure and is helping Venezuela launch a satellite, yet Beijing is wary of antagonizing the US by getting too close to President Hugo Chávez.

The relationship has also been soured by mounting trade tensions. Latin America ran large trade surpluses with China in the early part of the decade, but after a recent surge in Chinese manufacturing imports it will record a deficit this year, prompting a slew of anti-dumping actions.

The volatility of recent political trends in the region has also damped Chinese interest - even in countries where leftist governments might be expected to be well-disposed to China.

In one of the biggest Chinese investments in the region, Sinopec and Petro¬China bought Andes Petroleum of Ecuador for $1.42bn in 2005. But Andes Petroleum has not been spared a windfall tax introduced recently by the new leftist government and is considering taking the government to international arbitration.

"Like everyone else, [China is] trying to make out what is happening," says Cynthia Watson, at the National War College in Washington. By contrast African governments have been much quicker to strike deals with China. "African needs are much more pressing and nationalism is far less virulent there."

ΠΗΓΗ: FT.com 
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