The headlines scream China is replacing the US in Latin America, but the data tells a completely different story.

Here’s the truth ↓

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There’s a factory in northeastern Brazil, in the state of Bahia, which has made quite a few headlines in recent years.

The factory, currently owned and operated by Chinese automaker BYD, just rolled out its first fully electric car in May and is expected to be fully operational by the end of 2026.

Last December, it was temporarily shut down by Brazilian authorities after an investigation found ‘slave-like conditions’ for some workers.

Prior to all these developments, the factory raised eyebrows worldwide as it had previously been owned and operated by historical US car-making giant Ford.

To many analysts in both Brazil and Washington, what could be a better symbol of China replacing the United States in influence in Latin America?

Well far be it from us to disrupt a good story, but as always there’s noise and there’s cold numbers.

Despite the headlines and this Bahia factory, the US remains by far the top foreign investor in Latin America.

Since 2020, over a third of all inward foreign direct investment (FDI) has come from the States, roughly double that coming from in from the 27-country European Union.

In fact, two small EU countries – Luxembourg and the Netherlands, through which many European countries direct their investments due to financial incentives – invest more on average than China (and Hong Kong, which serves a similar role).

China is the top investor in Ecuador, it’s true, but the US is the largest investor in Colombia, Costa Rica, the Dominican Republic, Mexico, and Panama, while Spain is most prominent in Argentina and Bolivia.