In-Depth Research Report on Cognitive Gaps in the Latin American Market and the Conversion of Going-Global Dividends for Chinese Enterprises

I have now collected sufficient information, let me conduct a systematic in-depth analysis for you.

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Chinese enterprises have a significant ‘time dislocation’ in their perception of the Latin American market, and this cognitive gap stems from the superposition of multiple factors. Sun Xinyue, Founder of Jingwei Consulting, pointed out that domestic perceptions of Latin America often remain in historical stages, and are significantly disconnected from the current social governance and industrial transformation status of the region[1]. For example, Medellin, Colombia has successfully transformed into a digital nomad city, but domestic perceptions still remain stuck in its past negative image.

This cognitive time lag is reflected in the following dimensions:

Cognitive Dimension	Common Domestic Perception	Actual Situation in Latin America
Market Risk	Frequent coups, excessively high risk	Improved political stability, relatively sound legal system
Industrial Level	Backward, primitive	Some sectors are on par with or even ahead of China’s internet development
Market Opportunities	Either full of gold or fraught with crisis	Structurally diverse and multi-layered, requiring in-depth understanding to grasp
Competitive Landscape	Blue ocean market	Actually highly competitive, with high localization barriers

Data from the Ministry of Commerce shows that Chinese investment in Latin America reached US$15.56 billion in 2024, a year-on-year increase of 15.4%, accounting for 8.1% of total outward direct investment flows. Latin America has become China’s second largest investment region after ASEAN[2]. This data indicates that enterprises that truly understand Latin America are already actively deploying, and the cognitive gap is becoming a source of dividends for early movers.

Sun Xinyue summarized the characteristics of the Latin American market with the concise 12-character phrase:

[1]. This judgment contains profound strategic implications:

• “Not fast-growing but with large space”
  : The economic growth rate in Latin America is relatively moderate (the IMF predicts 2.4% growth in 2025), but the market volume is substantial — the total population of Latin America and the Caribbean exceeds 660 million, with a working population of approximately 320 million, of which Brazil and Mexico account for 52% of the region’s total population[2]. More importantly, this is an underdeveloped market, with e-commerce penetration rate only 12%-15%, far lower than China’s over 45%[3].

• “Not a hot spot but with a long window period”
  : The Latin American market is not a hot spot for going global like Southeast Asia, but this precisely means that the competitive landscape has not yet solidified. The International Monetary Fund predicts that, relying on its geographical advantage adjacent to North America, coupled with the transformation demand in emerging fields such as new energy and intelligent manufacturing, the Latin American market will provide Chinese enterprises with a strategic window period lasting 5-10 years.

2025 is defined by the industry as the “First Year of Latin American Localization”[3]. This judgment marks a fundamental shift in the logic of Chinese enterprises’ going global:

: Focus on product export, entering the market by relying on price advantages and channel cooperation.
: Establish local production bases, supply chain systems and service networks to achieve true “local production for local sales”.

The deep-seated driver of this transformation is that Latin American countries are constructing a high-barrier market environment of “exchanging market for investment” through complex tax and trade policies. The Brazilian government officially implemented a new automotive industry policy centered on the “Mobility and Innovation Program (MOVER Program)” in 2025, which ties tax incentives to full-life-cycle carbon emissions, local R&D investment and production depth. The import tariff on new energy vehicles is scheduled to rise back to 35% in 2027[4].

Based on in-depth research on the Latin American market, Sun Xinyue summarized three types of cognitive gaps that can be converted into dividends[1]:

• Information updates in the Latin American market are slow, and the competitive landscape in many segmented sectors has not been fully studied
• Enterprises that take the lead in conducting systematic market research can discover neglected segmented opportunities
• Cases: Segmented markets such as engineering machinery, aerial work machinery, and agricultural machinery

• Mature models from China in e-commerce, mobile payment, local life services and other fields can be replicated and upgraded in Latin America
• However, adjustments are needed based on local consumption habits, legal environment and payment infrastructure
• Cases: TikTok’s social e-commerce model in Brazil, Meituan Keeta’s entry into the Brazilian market[3]

• Chinese enterprises have advantages in supply chain integration, cost control and rapid iteration capabilities
• Combine these advantages with the characteristics of the Latin American market through local production
• Cases: BYD completed a whole vehicle factory in Brazil in 15 months, Great Wall Motor’s local R&D

Zoomlion is a typical representative of China’s engineering machinery industry going global, and its layout in Latin America demonstrates systematic strategic thinking. According to its 2024 annual report, the company’s overseas revenue increased by over 30% year-on-year to RMB 23.38 billion, accounting for 51.41% of total operating revenue, up from 38.04% in 2023, achieving a historic breakthrough of overseas revenue accounting for over half of total revenue for the first time[5].

:
Zoomlion has completed its strategic layout of building 11 overseas production bases in 8 countries around the world, with important nodes in Latin America including:

• Brazil Base
  : Covers product lines such as concrete machinery and construction hoisting machinery
• Mexico Base
  : Fully put into operation, serving the North American and Latin American markets

This layout enables the company to form a production system covering 8 categories and 32 series, with products widely sold in more than 170 countries and regions[6].

Zoomlion’s core competitiveness in going global lies in its “end-to-end, digitalized, localized” overseas business system[5]:

Model Elements	Specific Practices	Competitive Advantages
End-to-End Direct Sales	Directly face end customers, do not rely on agents	Provide better services, increase profit margins
Digital Empowerment	Improve operational efficiency relying on big data platforms	Accurately identify customer needs, optimize supply chain
Global Aviation Hubs	More than 30 first-level business aviation hubs worldwide	Respond quickly to market demands
Localized Teams	More than 4,400 localized overseas employees worldwide	Gain in-depth understanding of the local market

Zoomlion’s development trajectory shows that true going global is not simple product export, but systematic output of industrial capabilities. Through overseas factory construction, the company has achieved:

• Avoid tariff barriers (especially in high-tariff markets such as Mexico and Brazil)
• Shorten delivery cycles, improve customer service response speed
• Establish local brand recognition, enhance market trust

As a key beneficiary enterprise of the “Belt and Road” Initiative, Zoomlion has industrial parks or production bases in countries along the route such as Italy, Germany, Mexico, Brazil, Turkey and India, realizing the implementation of its overseas development strategy from “going out” to “integrating in” through localized operations[6].

The company has built a global service network through more than 30 first-level business aviation hubs and over 390 secondary and tertiary network outlets. With more than 210 global spare parts warehouses, it ensures the timeliness and reliability of services.

The Industrial and Commercial Bank of China’s (ICBC) layout in Latin America is a microcosm of the internationalization of China’s financial industry. According to ICBC’s 2025 semi-annual report, its main institutions in Latin America are as follows[7][8]:

Institution Name	Location	Total Assets (USD million)	Pre-Tax Profit (USD million)
ICBC Mexico	Mexico	552.20	68.85
ICBC Brazil	Brazil	306.20	32.70
ICBC Peru	Peru	631.93	156.91
ICBC Argentina	Argentina	7,791.49	1,483.15

From a regional distribution perspective, ICBC’s total assets in the Americas reached USD 45,022 million as of June 30, 2025, with pre-tax profit of USD 212 million[7]. This layout covers the major economies in Latin America, forming a relatively complete business network.

ICBC’s core competitive advantage in Latin America lies in its strong cross-border financial service capabilities:

: The international settlement volume of domestic branches in the first half of the year reached USD 1.6 trillion, a year-on-year increase of 18.5%
: As of the end of June, the balance of international trade finance of domestic branches reached USD 31 billion, an increase of 35.4% from the end of last year
: The settlement volume of cross-border e-commerce new business form in the first half of the year reached RMB 285.6 billion, a year-on-year increase of 9%

:
ICBC has innovatively launched two major product systems, “Cross-Border E-Commerce Connect” and “Cross-Border Warehouse Connect”, providing systematic financial solutions for new foreign trade business forms[7].

The core logic of ICBC’s layout in Latin America is “following customers” — as Chinese enterprises “go global”, it establishes branches in key markets to provide cross-border financial services for Chinese-funded enterprises. At the same time, it achieves business localization by serving local customers.

ICBC strictly follows local regulatory requirements in the Latin American market, realizing compliant operations by obtaining local banking licenses. This “licenses first” strategy lays a solid foundation for subsequent business expansion.

ICBC has established a sound integrated linkage marketing mechanism for domestic and overseas, local and foreign currencies, which can provide customers with global integrated financial service solutions. This capability is particularly important for serving “Belt and Road” projects and multinational enterprise groups.

Dimension	Key Points	Zoomlion’s Practice	ICBC’s Practice
Time Perspective	Latin American market requires a 3-5 year cultivation period	Sustained investment for over a decade	Layout for over 20 years
Window Period	Grasp the window of policy dividends	Build factories in Mexico and Brazil	Follow the pace of Chinese enterprises going global
Positioning	From “going out” to “integrating in”	11 overseas bases	Local legal person institutions

:

• Adjust product configurations according to local market demands (Zoomlion develops adaptive products for the Latin American market)
• Adapt to local regulatory requirements (ICBC complies with financial regulatory standards of various Latin American countries)

:

• Zoomlion: More than 4,400 localized overseas employees worldwide[6]
• ICBC: Hire local professionals to integrate into the local financial market

:

• BYD introduced local suppliers in Brazil, with three factories creating approximately 20,000 local jobs[9]
• Great Wall Motor built a supporting industrial park in Brazil, forming an integrated ecosystem of R&D, manufacturing and supply chain[10]

A PwC survey shows that the main challenges faced by Chinese enterprises in Latin America include[2]:

Risk Category	Percentage of Enterprise Perceptions	Response Strategies
Insufficient understanding of local laws and regulations	71%	Engage local legal advisors, establish compliance systems
Lack of international talents	46%	Train and introduce localized talents
Geopolitical risks	38%	Diversify market layout to avoid over-concentration
Policy instability	46%	Maintain communication with local governments, participate in industry associations
Foreign exchange control	46%	Reasonable capital pool management, multi-currency allocation

Country	Core Opportunities	Percentage of Enterprises with Investment Intent	Policy Dividends
Chile	Mining, new energy, trade hub	76%	Perfect free trade agreement network
Argentina	Agriculture, consumer market potential	73%	Economic reform opportunities under the new government
Mexico	Manufacturing base, nearshoring	72%	Supply chain restructuring under the USMCA framework
Brazil	Comprehensive market, e-commerce blue ocean	High	MOVER Program promoting new energy transformation

:
The “Belt and Road” cooperation plan signed between China and Colombia in 2025 lists the new energy vehicle industry chain as a key cooperation category[2]. Enterprises such as BYD and Great Wall Motor have established production bases in Brazil, forming a complete industry chain layout from whole vehicles to batteries[9][10].

:
A PwC survey shows that the construction industry is one of the core industries for Chinese enterprises to invest in Latin America[2]. Enterprises such as Zoomlion and Sany Heavy Industry are deeply cultivating the Latin American infrastructure market by leveraging the opportunities of the “Belt and Road” Initiative.

:
The e-commerce market in Latin America is expected to grow by 12.2% in 2025, 1.5 times the global average[3]. Platforms such as TikTok and Meituan Keeta are accelerating their entry into this market.

:
China-Latin America cooperation is expanding from traditional infrastructure to emerging fields such as green finance and digital economy[2]. Chinese financial institutions are playing an increasingly important role in green bonds and renewable energy project financing in Latin America.

:

1. Policy Window
   : Many Latin American countries are adjusting industrial policies to attract foreign investment into the manufacturing sector
2. Market Window
   : E-commerce penetration rate is still low, with huge room for consumption upgrading
3. Competition Window
   : Industry landscape has not yet solidified, with obvious first-mover advantages
4. Technology Window
   : Strong demand for new energy and digital transformation, Chinese technological advantages can be converted into market advantages

:

• For manufacturing enterprises
  : Accelerate localized production capacity layout, upgrade from KD assembly to full-process factories
• For technology enterprises
  : Seize the opportunity of penetration rate growth in social e-commerce and local life services
• For financial institutions
  : Follow customer demands, provide comprehensive financial services such as cross-border settlement, financing and risk management
• For service enterprises
  : Pay attention to professional service opportunities brought by improved compliance requirements

The cognitive gaps in the Latin American market are indeed being converted into going-global dividends for Chinese enterprises, but this conversion requires support from systematic capabilities:

1. Cognitive upgrading is the prerequisite
   : Enterprises need to deeply understand the institutional logic, social operation methods and market characteristics of Latin America, rather than simply applying domestic experience

2. In-depth localization is the key
   : Upgrade from product export to industrial rooting, achieve in-depth localization in dimensions such as production and manufacturing, supply chain, talent team and compliance governance

3. Long-termism is the guarantee
   : The characteristic of the Latin American market being “not fast-growing but with large space” requires enterprises to have strategic patience of 3-5 years or even longer

4. Window period awareness is the opportunity
   : Currently, it is a strategic opportunity period with the overlap of four windows: policy, market, competition and technology, and early-mover enterprises are expected to gain significant competitive advantages

Looking forward, the strategic position of the Latin American market in the globalization layout of Chinese enterprises will continue to rise. With the deepened implementation of the Regional Comprehensive Economic Partnership (RCEP) and the continuous deepening of China-Latin America economic and trade cooperation, Chinese enterprises are expected to achieve a leap from “participants” to “leaders” in the Latin American market.

Experiences of early-mover enterprises such as Zoomlion and ICBC show that successful going global requires a balance between strategic resolve, operational capabilities and risk control. For Chinese enterprises that are considering or have already entered the Latin American market, learning from these experiences and carrying out localized innovation combined with their own characteristics will be the key to seizing this strategic opportunity.

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[1] 36Kr - “Going Global Value Lowland: Real Opportunities I Saw on the Frontline in Latin America” (https://m.36kr.com/p/3628862062347528)
[2] PwC - “Building Momentum for Growth: Survey of Chinese Enterprises’ Investment in Latin America” (https://www.pwccn.com/zh/issues-based/investment-research-chinese-enterprises-latin-america-nov2025.pdf)
[3] The Paper - “First Year of Latin American Localization: A New Chapter for Chinese Enterprises | 2025 Going Global Review” (https://m.thepaper.cn/newsDetail_forward_32327016)
[4] Sina Finance - “Entering Latin America: From ‘Trade’ to ‘Rooting’ | China’s Automotive Going Global 2025 Part 4” (https://finance.sina.com.cn/stock/relnews/hk/2026-01-04/doc-inhfcphr2920360.shtml)
[5] Sina Finance - “Overseas Revenue Accounts for Over Half of Total Revenue, Zoomlion Accelerates Layout of Future Industries” (https://finance.sina.com.cn/roll/2025-03-25/doc-inequyfh0355916.shtml)
[6] Zoomlion Heavy Industry Science & Technology Co., Ltd. - “2024 Annual Report” (https://pdf.dfcfw.com/pdf/H2_AN202503241646953735_1.pdf)
[7] Industrial and Commercial Bank of China - “2025 Semi-Annual Report” (https://v.icbc.com.cn/userfiles/resources/icbcltd/download/2025/Announce20250829_13.pdf)
[8] Industrial and Commercial Bank of China - “Interim Report” (https://v.icbc.com.cn/userfiles/resources/icbcltd/download/2025/Announce20250924_3.pdf)
[9] BYD Official Website - “First Vehicle Rolls Off the Line at BYD’s Brazil Factory, Opening a New Chapter in Latin America’s New Energy Industry” (https://www.byd.com/cn/news/2025/detail595)
[10] CM Roro - “Progress of Automakers’ Overseas Factory Construction” (http://www.cmroro.com/news/shownews.php?id=648)