A Study Of Chinese Investment In Ecuador

China has a unique model of approaching and doing investment in countries all over the world and in recent years, China has had an enormous influence in the economies of Latin American countries including Ecuador. Sino-Ecuadorian relations date back to the1980s. However, investment flows from China have increased tremendously since the year2006. Although these relations have been commercial, there are future prospects for political, social and cultural exchanges between the two countries. Large amounts of China’s investments are concentrated on Ecuador’s major sectors such as energy and mining. However, there is evidence of small quantities’ of investments in the manufacturing, agriculture, trade and construction sectors. Chinese investments in Ecuador has been through loans-for-raw materials exchange coupled with capturing infrastructure building contracts to assist in the development of the economy. This is done through negotiations according to Ecuadorian government standards. This approach has had a positive impact and the Ecuadorian government expects to continue attracting more Chinese investment in the country.The objectives of this thesis were:Firstly, to offer a general overview of Chinese investment in Ecuador; secondly, to detail why and how the Chinese investment is approaching the Ecuadorian market; thirdly, the impact of the Chinese investment on the development of Ecuador and fourthly, to know the future of Chinese FDI in Ecuador.This research is divided in five different chapters. Chapter1gives a brief introduction on the background of the Chinese-Ecuadorian relations, the literature review and the purpose statement. The research objectives, research problems, methodology, thesis structure, and the point of innovation are also included in this chapter. Chapter2analyzes the overview of Chinese investment in Ecuador including the background of Chinese FDI and current situation including the volume, main sectors, how Chinese carry out investment in Ecuador, and the status of FDI Chinese investment in Ecuador in comparison with that of the United States investment. Chapter3includes the analysis of the data evaluating the impact of Chinese investment in Ecuador and opinion from the Ecuadorian government about Chinese investment. Chapter4includes the future expectations about Chinese investment in Ecuador giving the reasons why China has chosen to invest in Ecuador, Ecuador’s attitude towards Chinese FDI and the China’s potential for further investment in Ecuador. Chapter5gives the respective conclusions and recommendations.