China, which is the world's third largest recipient of foreign direct investment (FDI), is potentially "a very large investor" in Latin America and the Caribbean, the Economic Commission for Latin America and the Caribbean (ECLAC) said on Wednesday in Santiago.

Jose Luis Machinea, executive secretary of the ECLAC, said that although China did not play a prominent role in the investment field at present, the country would invest more to ensure access to the natural resources of the region in the future.

"Traditionally, foreign investment in Latin America has come from the United States and Europe," he said, citing the chapter covering China in ECLAC's annual report on the region's FDI in 2005 entitled "Latin America's World Presence." However, it is essential to diversify capital flows, he added.

Commenting on the report published on Wednesday, Machinea highlighted China's investment and joint-ventures in projects in Argentina, Brazil, Chile and Cuba, but he also said Chinese investment levels were not significant enough yet to be mentioned in the ECLAC document.

The report, which includes advice for government and businesses, says the policies and institutions designed to attract investment to the region are weak, given the fierce competition from elsewhere.

It praises the Asian countries whose governments have developed close relationships with large companies to promote closer ties between trade strategy and development policy.

Latin America and the Caribbean received 61.6 billion U.S. dollars of FDI in 2005, about the same as in 2004, the report says.

Source: Xinhua