In the context of "new globalization," it is impossible to ignore the political changes in overseas countries, and 2024 is expected to be the year with the most significant global political shifts in recent decades.
Uruguay
Uruguay's Political and Economic Overview
Uruguay's 2024 general election is scheduled for October 27, with a second round on November 24 if no candidate receives a majority in the first round. The main contenders are Álvaro Delgado from the National Party (PN, right-wing) and Yamandú Orsi from the Broad Front (FA, left-wing).
500 kV Transmission Ring Closure Project in Uruguay
Source: Xinhua News Agency
China's investments in Uruguay primarily focus on infrastructure and energy sectors. One of the most significant projects is the 500 kV transmission ring closure project undertaken by China Machinery Engineering Corporation (CMEC). The total investment in this project is approximately $178 million, with a construction period of 42 months. The project covers five northern provinces of Uruguay and includes the construction of new 500 kV substations, the expansion of existing substations, and about 355 km of single-circuit transmission lines. This project forms a critical part of Uruguay's national grid backbone, improving the reliability of Uruguay's power grid and enhancing the stability of its power system. It also promotes interconnection with neighboring countries' power systems. Furthermore, this project will meet the power transmission needs of several major investment projects in northern Uruguay, including wind power projects and UPM's second pulp mill.
Uruguay has also officially joined the Belt and Road Initiative, further deepening cooperation with China in various sectors. The two countries have signed a series of cooperation agreements covering infrastructure construction, agriculture, and trade. Through these projects, China has not only supported Uruguay's economic development but also strengthened economic ties between the two nations. By implementing these large-scale projects, Chinese investments in Uruguay have further driven local economic development and provided a solid platform for Chinese companies to expand into the Latin American market. These projects highlight China's technological and investment capabilities in the infrastructure and energy sectors, laying a strong foundation for long-term cooperation between the two countries.
However, the continuation and communication of these projects may change depending on the election of the new president. Álvaro Delgado, the current Cabinet Secretary of President Luis Lacalle Pou, has extensive administrative experience. As the right-wing candidate, he advocates for free-market economic policies, emphasizes trade liberalization, and plans to sign free trade agreements with countries like China. He also supports reducing public sector employment and is committed to lowering inflation. Delgado's campaign platform includes strengthening cooperation with international partners, combating organized crime and drug trafficking, and promoting domestic infrastructure development. These policies are very favorable for Chinese companies, as free trade agreements and market economy policies will provide more opportunities and convenience for Chinese businesses entering the Uruguayan market. Lowering inflation and improving infrastructure will also enhance the business environment and profitability for Chinese companies in the region.
On the other hand, Yamandú Orsi is the candidate for the Broad Front, a left-wing coalition. He previously served as mayor of Canelones and is a core member of the Broad Front. Orsi advocates for social justice and focuses on improving education, healthcare, and social welfare to reduce poverty and inequality. His policy platform leans towards social democracy, emphasizing the role of government in economic and social affairs. His campaign includes investing in public health and education systems, expanding social welfare coverage, and implementing progressive tax policies to achieve economic redistribution. Additionally, he emphasizes grassroots democracy and citizen participation to push political reforms. For Chinese companies, Orsi’s policies might increase tax burdens in the short term, but by improving social welfare and infrastructure, they could create a more stable business environment and improve the quality of the workforce, providing a stronger foundation for long-term business development in Uruguay.
These two candidates represent opposite ends of Uruguay’s political spectrum—one advocating for the continuation of the current government's free-market and tough security policies, and the other emphasizing social justice and government intervention. Whichever candidate wins will have different impacts on Chinese companies' investments and operations in Uruguay. Right-wing policies may be more favorable for market access and business operations, while left-wing policies may bring more social stability and long-term development opportunities. Chinese companies must flexibly adjust their investment and operational strategies in Uruguay according to the election results to maximize their business interests in the region.
Venezuela
Venezuela's Political and Economic Overview
Venezuela's 2024 presidential election is scheduled for July 28. Incumbent President Nicolás Maduro is running for a third term, while Edmundo González Urrutia is the main opposition candidate. This election will have a significant impact on Chinese companies' investments and operations in Venezuela.
Venezuelan Refinery. Source: ZeroHedge
Nicolás Maduro has served as President of Venezuela since 2013, succeeding the late President Hugo Chávez. He represents the ruling United Socialist Party of Venezuela (PSUV). Maduro's policies continue Chávez’s "21st-century socialism," emphasizing state control of the economy and broad social welfare distribution. His government has implemented extensive nationalization policies, focusing on social programs and welfare spending, but these have also led to severe economic problems and hyperinflation. Maduro is committed to maintaining the existing socialist system, emphasizing the state's dominant role in the economy and continuing social welfare projects. For Chinese companies, Maduro’s policies provide continuity for large-scale infrastructure and energy projects, such as the oil field developments and energy projects in Venezuela involving China National Petroleum Corporation (CNPC) and other Chinese firms. However, the economic instability and political risks under Maduro’s government pose high operational risks for Chinese companies, particularly regarding foreign exchange controls and capital repatriation.
Edmundo González Urrutia is the candidate of the opposition alliance "Democratic Unitary Platform," a former diplomat and scholar. He advocates for market-oriented economic reforms, reducing government intervention, and encouraging the development of the private sector. González emphasizes the restoration of the rule of law and democratic institutions, calling for international support for Venezuela’s democratic transition. His campaign platform includes restoring the market economy, attracting foreign investment, rebuilding judicial independence and press freedom, improving human rights, and working to end the country's long-standing political and economic crisis. For Chinese companies, González's policies may bring a more stable and transparent business environment, reduce the risks of foreign exchange controls and nationalization, and support long-term business growth. However, in the short term, companies may face challenges adapting to policy changes and the restructuring of Venezuela's economic system.
China’s investments in Venezuela are mainly concentrated in the energy and infrastructure sectors, especially in oil and gas projects. In recent years, China has become Venezuela’s largest creditor and a key economic partner through a series of large-scale loans and direct investment projects. First, China National Petroleum Corporation (CNPC) has made significant investments in the Orinoco Heavy Oil Belt, one of the world's richest heavy oil regions. CNPC cooperates with Venezuela’s state-owned oil company PDVSA on oil exploration and production in the region. This cooperation includes multiple long-term oil exploration and production contracts. Additionally, China has provided over $60 billion in funding support through oil-for-loans agreements, helping Venezuela with much-needed capital for infrastructure projects and economic development in exchange for future oil supplies. These agreements have made China Venezuela's largest creditor. China and Venezuela have also signed the "Investment Promotion and Protection Agreement," aimed at expanding bilateral investment and trade cooperation in education, agriculture, and other key sectors. Through this agreement, both sides hope to establish a more stable investment environment and further strengthen economic cooperation through the development of Special Economic Zones (SEZs).
These projects and agreements demonstrate China’s deep involvement and broad influence in Venezuela. Despite these large investments and partnerships, Chinese investments in Venezuela still face numerous challenges, including political instability, economic crises, and high foreign debt risks. The two candidates in the upcoming election represent vastly different political and economic routes. Maduro’s policies lean toward state control and social welfare, supporting large national projects but posing high risks to the economy. In contrast, González advocates for market-oriented reforms and democratic transition, which could lead to a more stable investment environment but may require companies to adapt to short-term policy changes. Chinese companies in Venezuela must flexibly adjust their investment strategies according to the election results to adapt to the new political and economic environment and achieve their business goals.
Haiti
Haiti’s 2024 elections are planned under the leadership of the new government, although the exact date has not yet been determined. The newly established Transitional Presidential Council and government are working to address security issues and create conditions for the election, though it is expected to take place in 2026, with this year being a year of planning for the elections. The main candidates include Ann Valérie Timothée Milfort from the Haitian Tèt Kale Party (PHTK, right-wing) and Maryse Narcisse from Fanmi Lavalas (FL, left-wing).
Ann Valérie Timothée Milfort is the candidate for the Haitian Tèt Kale Party, which has played an influential role in Haiti's political scene. Milfort advocates for free-market economic policies, emphasizing attracting foreign investment and promoting economic growth. Her policies include reducing government intervention, promoting private enterprise development, and boosting national competitiveness through economic reforms. Milfort plans to attract foreign investment by cutting taxes and simplifying regulations, improving infrastructure, and emphasizing the rule of law and national security to promote long-term stability and economic development. For Chinese companies, Milfort's policies may provide a more open and investment-friendly environment, especially in infrastructure and energy development sectors. Reducing government intervention and offering tax incentives will make Chinese companies' operations more efficient and profitable in Haiti. However, Haiti's security and political stability remain key risks for companies to consider.
Another main candidate, Maryse Narcisse, represents Fanmi Lavalas, a left-wing political party founded by the late former President Jean-Bertrand Aristide. Narcisse advocates for social democratic policies, favoring a stronger role for the government in economic and social affairs. She emphasizes social justice and welfare policies aimed at reducing poverty and inequality. Narcisse plans to strengthen investments in public health and education systems, expand social welfare coverage, and achieve economic redistribution through increased government spending and progressive tax policies. She also emphasizes grassroots democracy and citizen participation to drive political reform. For Chinese companies, Narcisse's policies might bring higher taxes and regulatory burdens, especially in the short term, but they could also create a more stable business environment by improving social welfare and infrastructure. In the long run, an improved social environment and higher workforce quality may positively impact the companies' operations.
Haiti's economy is mainly agriculture-based. Source: WFP Haiti
China’s investment projects in Haiti primarily focus on infrastructure development. One significant project is the $3 billion investment agreement between China and Haiti, aimed at developing Haiti's infrastructure. This investment will cover power plants, sewage treatment facilities, water systems, railways, affordable housing, and market construction. These projects are expected to have a significant impact on Haiti’s social and economic development. The initial phase of the plan will focus on the capital Port-au-Prince, with an investment of about $4.711 billion for developing clean water and drainage systems, road infrastructure, sanitation projects, and communication infrastructure. Therefore, the final choice between these two candidates will greatly affect future developments. However, considering Haiti is still in a period of turmoil, Chinese companies looking to expand into the country should proceed with caution.
From the political spectrum of the candidates, Milfort represents right-wing policies focused on market liberalization and economic growth, while Narcisse represents left-wing policies emphasizing social justice and government intervention. Milfort’s policies may favor rapid market entry and short-term profitability for Chinese companies, whereas Narcisse's policies could create a more stable and equitable business environment in the long term. Chinese companies will need to adjust their investment and operational strategies in Haiti based on the election results to adapt to the new political and economic environment and maximize their business interests.
Summary
Among the seven Latin American countries in 2024, left-wing governments include Mexico's newly elected President Claudia Sheinbaum, who promotes policies in economic growth, energy transition, social welfare, and infrastructure development; and Venezuela's Nicolás Maduro, who is running for re-election and continues to push left-wing policies centered around state control and social welfare.
Right-wing governments include Dominican Republic President Luis Abinader, who has been re-elected and promotes market-oriented economic policies, which are expected to improve the business environment and attract more foreign investment.
Additionally, Uruguay and Haiti will hold elections in 2024, with right-wing candidate Álvaro Delgado and left-wing candidate Yamandú Orsi competing in Uruguay, and right-wing candidate Ann Valérie Timothée Milfort and left-wing candidate Maryse Narcisse competing in Haiti. The policy directions in these countries will be determined by the election results.
Amid events such as the investment challenges faced by Ganfeng Lithium and Tianqi Lithium in Latin America, it is clear that these seven Latin American countries, with a total annual trade value of $13.7 billion with China, hold key resources crucial to China. This highlights how managing and mitigating risks has become a major issue that Chinese companies cannot ignore. Over the coming years, the prospects and opportunities for Chinese companies in Latin America will be deeply influenced by the political environments and policies in these countries. The risks for Chinese companies going global include geopolitical risks, compliance risks, fraud risks, and overseas security risks. Hoping for purely business dealings without involving local politics is becoming increasingly impossible.
Thus, we summarize the following five suggestions for companies going abroad:
Establish Geopolitical Teams and Overseas Intelligence Systems: Stay updated on local political dynamics and policy changes to anticipate risks and opportunities.
Don't Put All Eggs in One Basket: Diversify investments to avoid concentrating on a single market or project, reducing overall risk.
Incorporate Professional Strategic Consulting Firms, Legal Services, and Market Research Organizations: Leverage professional services to enhance strategic planning and risk management capabilities.
Prioritize Community and Civil Engagement Abroad: Strengthen ties with local communities and civil organizations to build a positive corporate image and increase social responsibility.
Enhance Compliance, Confidentiality, and Security Training: Improve employees' awareness of compliance and safety measures to ensure legal, compliant, and secure business operations.
When formulating internationalization strategies, Chinese companies must comprehensively assess and address these political risks, adjusting strategies flexibly to suit the policy environments and market dynamics of different countries. In sectors such as infrastructure, energy, mining, and high-tech, Chinese companies should seize opportunities created by national economic policies to promote long-term stable development.