Despite commodities, South Korea is also interested in Chile's energy sector. Korea Southern Power now operates in Chile's solar power generation business. It has also built a gas power plant in Chile in 2013 Korea Southern Power expands in overseas market. Retrieved on 28 April 2019 from URL: http://www.koreaherald.com/view.php?ud=20160630000117&ACE_SEARCH=1. It was the first South Korea's entrance to Chile's energy market. Construction is also among key industries for South Korean investment in Chile. Hyundai invested into Chacao Bridge construction in 2014.

South Korea's investment collaboration with Mexico is slightly declining since 2017 when D. Trump was elected as the US President. South Korea often enjoyed Mexico's location as a bridge to other countries including the USA. POSCO constructed a steel plant in Mexico in 2009. It has also built a steel service center in the USA to benefit from the location of the plant built in Mexico.

Kia has constructed its first Latin American plant in Mexico in 2015 with intention to expand into Central America and the USA Seo J.E. (2015). Kia Motors to produce compact K3 in Mexico. Retrieved on 24 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20150326000844&ACE_SEARCH=1. It was planned to sell 80% of Kia cars produced in Mexico to numerous other countries Kia Motors to use Mexico as bridge to Americas. Retrieved on 24 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20160908001022&ACE_SEARCH=1. To support Kia presence in Mexico, Mexico allowed Kia to sell 10% of the its plant's output in the local market free of duty Kia's plant in Mexico. Retrieved on 23 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20160912001014&ACE_SEARCH=1.

Korea Gas Corporation has invested in liquefied natural gas terminal located in Mexico in 2015. Samsung operates in Mexico but is intending to relocate its manufacturing to the USA Samsung mulls moving Mexico plant to US. Retrieved on 24 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20170309000688&ACE_SEARCH=1 in order to avoid extra taxation implemented by Trump when exporting to the USA.

Ecuadorian Minister of International Trade expressed his intention for strategic economic partnership with South Korea based on pragmatism. He attempts to highlight Ecuador investment attractiveness for both large conglomerates and small and medium sized enterprises. He intends to make Ecuador an investment hub for such fields as tourism, hospitalities, services and hotel industry Lee J. (2017). `Ecuador, land of virginal opportunities'. Retrieved on 28 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20171211000916&ACE_SEARCH=1.

Despite that, Ecuadorian Minister of International Trade suggests South Korea to invest into Ecuador's largest petroleum refinery Lee. J. (2017). `Ecuador, land of virginal opportunities'. Retrieved on 30 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20171211000916&ACE_SEARCH=1. Cooperation in petrochemicals, food processing, energy and mining sectors seems also attractive for both sides. Crude oil and aluminum provide the major interest for South Korea.

Energy is also an Ecuadorian sector with high potential. The Ecuadorian government delivered a $7 billion for the country's energy transformation in 2015. It should contribute to energy production change and enable to source over 90% of electricity from hydropower. The country is looking for investments in wind power and solar energy. Furthermore, South Korea invested $9.3 million in joint electrical substations construction project LSIS signs W10b construction deal with Ecuador. Retrieved on 30 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20160802000559&ACE_SEARCH=1.

There are numerous projects South Korean companies invest in Bolivia. Most projects are connected to agriculture, mining, construction. For example, Samsung invested in a petrochemical fertilizer plant construction in Cochabamba, Hyundai participated in the Banegas Bridge construction, LG and Posco study the opportunities from investing in Bolivia's lithium, gas and other mineral and natural resources Lee J. (2017). Bolivia marks independence, investment opportunities. Retrieved on 1 May 2019 from URL:http://www.koreaherald.com/view.php?ud=20170807000821&ACE_SEARCH=1. Furthermore, South Korean companies invest in residential construction, knowledge-sharing programs, etc.

As South Korea-Colombia FTA is in effect for two years since 2016, the major effect was perceived in trading relations in context of elimination of trade tariffs. Nevertheless, there are negotiations on Bogota subway construction project and Bogota International Airport upgrade and new terminal construction project Lee J. (2017). `Colombian economy ripe for investment after peace deal'. Retrieved on 30 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20170529000871&ACE_SEARCH=1. Furthermore, South Korean LG has already invested $5.3 million into bus transportation system LG CNS leads in modernizing Colombia's transport system. Retrieved on 30 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20151103001151&ACE_SEARCH=1.

SK and LG has stablished its distribution center in Colombia. Hyundai invested in construction of water treatment plant on the river, LG CNS has invested into three governmental IT-projects as well. Furthermore, South Korean game developer Netmarble has acquired the Colombian company specialized in game development. In addition to that, some South Korean companies invest in Colombia's agriculture including coffee, fruits export and sugar extraction Lee. J. (2018). Colombia-Korea commerce shows steady growth with free trade agreement. Retrieved on 30 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20180731000281&ACE_SEARCH=1.

Uruguay energy sector also seems attractive for South Korea. Hyundai has invested into thermal power station construction project in Uruguay in 2012. It was its first entrance into Uruguay Hyundai E&C makes progress in Latin America. Retrieved on 1 May 2019 from URL:http://www.koreaherald.com/view.php?ud=20150527000649&ACE_SEARCH=1. Actually, there is little collaboration between countries.

Paraguay is one of the poorest countries of Latin America and do little collaboration out of Latin America. For that reason, it is aimed at world economy integration. Though it has small investment attractiveness, it attempts to address this issue and seeks for investment into construction sector Paraguay eyes Korean investment. Retrieved on 1 May 2019 from URL:http://www.koreaherald.com/view.php?ud=20140921000285&ACE_SEARCH=1. Paraguay is landlocked between Argentina and Brazil, and it can be turn into advantage as a gateway to large Brazilian and Argentinian economies. South Korean THN company has already assessed strategic location of Paraguay and invested into manufacturing plant of automobile parts to export into Brazil and Argentina. Ilsung Construction has also invested into highway construction.

Hyundai has entered Venezuelan market in 2012. Later it got an opportunity to expand significantly in Venezuela by refinery expansion and facility upgrade project in 2014 Hyundai E&C wins $3.47b Venezuelan refinery order. Retrieved on 1 May 2019 from URL:http://www.koreaherald.com/view.php?ud=20140630000980&ACE_SEARCH=1. Hyundai major goal was to expand into new emerging markets in advance. South Korean GS also invested in building natural-gas processing plant there in 2015 GS E&C wins $2.62b Venezuela plant deal. Retrieved on 29 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20150116000593&ACE_SEARCH=1. Nevertheless, nowadays investment collaboration between South Korea and Venezuela is declining significantly in context of recent political and economic instability in Venezuela. In January 2019 Korea Trade-Investment Promotion Agency has decided to withdraw its office from Venezuela since March KOTRA withdraws Venezuela office amid turmoil. Retrieved on 21 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20190130000119&ACE_SEARCH=1. There was also a decline in bilateral trade by 84.2% in 2018 Ibid..

South Korea did not establish diplomatic relations with Cuba. There are no significant joint economic projects revealed. Nevertheless, South Korea attempts to promote relations with Cuba despite opposite political vision. South Korea's Trade Promotion Agency organized a Cuba Week in May 2017 to discuss possible cooperation in energy, medicine and finance sectors Kotra hosts Cuba Week to promote economic ties with island nation. Retrieved on 3 May 2019 from URL:http://www.koreaherald.com/view.php?ud=20170515000888&ACE_SEARCH=1.

To conclude, South Korea invest actively into Latin America. It should be mentioned that South Korea's investors are presented not only by large enterprises but also by small and medium business emerged in investment into Latin America after the Asian crisis. Most investments are directed into mining, construction, energy, transportation and logistics, agriculture.

Chapter 3

3.1 Competition with neighboring Asian countries

There is a strong competition for influence in Latin America between China and Japan. For example, in 2014 leaders of both countries has visited Latin America approximately at the same time, the route was similar as well. Nevertheless, the countries have different strategies the Republic of Korea should consider.

China's economic policy towards Latin America has experienced three main stages. The first stage has started in 1990s by increasing trade volume. Than in the beginning of 1990s trade volume was insignificant, while in 2000s China became the second largest trading partner for most of Latin American countries. At the same time, Latin American countries together became fourth China's largest trading partner.

Finally, since 2007 China has changed its way of promotion into Latin America by investment. Those time China invested mostly into Brazil, Venezuela and Ecuador. Later since 2013 China has started to expand by infrastructural projects in all countries of Latin America. Actually, investment rate at internal projects in China has decreased while investments all over the world has increased significantly.

In 2015 China has expressed its intention to invest $250 billion into Latin America during the next decade Rajagopalan M. (2015). China's Xi woos Latin America with $250 billion investments. Retrieved on 15 April 2019 from URL:https://www.reuters.com/article/us-china-latam-idUSKBN0KH06Q20150108. It might be perceived as a way to boost its influence in a new region with the USA domination.

In February 2018 in Chile China's leader announced that the whole Latin America is to be joined Belt and Road Initiative. It should promote free trade between the regions and eliminate protectionism. China is mostly interested in development of transportation system in Latin America to provide the route to China and actively invest in such projects.

The graph below shows trade volume with China's major trading partners. It is seen that trade volume with most countries increases from year to year. Despite the general trends, trend volume with Venezuela decreases because of instable local conditions.

Source: Annual International Trade Statistic. Retrieved on 2 May 2019 from URL:data.trendeconomy.ru/dataviewer/trade/statistics

Though the major China's trading partner is Brazil, the major China's export destination is Mexico. Mexico is an attractive export destination with a large and demanding middle class. Nevertheless, Mexico is also perceived as an intermediary country for further expansion into other countries. Therefore, such export increase is an outcome of the country's strategic location of a gateway to Americas. Furthermore, a strong decline in export to Venezuela is revealed because of worsening local conditions.

Source: Annual International Trade Statistic. Retrieved on 2 May 2019 from URL:data.trendeconomy.ru/dataviewer/trade/statistics

If turn to statistics of China's import, it is shown that the major source of import is Brazil. The import volume from the has increased significantly in 2017. The second largest partner is Chile which is rich in natural resources.

Source: Annual International Trade Statistic. Retrieved on 2 May 2019 from URL:data.trendeconomy.ru/dataviewer/trade/statistics

China intends to be involved into numerous transportation projects in Latin America. Railway between Amapala on the Pacific coast and Castilla in Honduras, rail links within Brazil, the San Martнn freight train line. In Argentina, railway between the Dominican Republic and Haiti, interoceanic canal in Nicaragua are among them Kuo L. (2014). Why China wants to build a railway across South America. Retrieved on 14 April 2019 from URL:https://qz.com/236220/why-china-wants-to-build-a-railway-across-south-america/. New transportation alternatives are needed for China in the region because the among of transported goods through Panama Canal has tripled since 2010 Ibid..

In 2019 the Community of Latin American and Caribbean States gathered in Beijing. The community includes just Latin American countries without the USA and Canada in comparison to the Organization of American states including the USA and Canada. During the meeting it was said that mutual trade volume between China and Latin American countries will achieve $500 billion in 10 years Rajagopalan M. (2015). China's Xi woos Latin America with $250 billion investments. Retrieved on 15 April 2019 from URL:https://www.reuters.com/article/us-china-latam-idUSKBN0KH06Q20150108. China is a largest trade partner for Brazil, Argentina, Chile and Peru now While Trump eyes Latin America with malign neglect, China sees opportunity. Retrieved on 26 April 2019 from URL:https://www.theguardian.com/world/2018/feb/08/latin-america-china-us-trump.

China-Latin America summits is an annual event taking place since 2007. The summit is focused on intensification of collaboration by trade and investment between the regions. The participants are to discuss the ways of cooperation with mutual benefits in the field of business, investment policies, international trade.

Central America is also involved into relations with China within Latin American framework. It means that the region is also a place of interest for China. In 2019 China-Latin America summit is expected to take place in Central American Panama Panama will host the China-Latin America and Caribbean Business Summit in 2019. Retrieved on 22 April 2019 from URL:https://www.panamatoday.com/economy/panama-will-host-china-latin-america-and-caribbean-business-summit-2019-7308.

Actually, Panama-China's diplomatic relationships were just established in 2017 after broke off with Taiwan. Nevertheless, both countries already have strong economic ties via trade and investment. Actually it was a trigger for extremely fast acceleration in relations development.

China is the first supplier of Panama's Colon Free Trade Zone. It is considered as world's second largest free trade zone Colon Free Zone and other Free Zones. Retrieved on 24 April 2019 from URL:https://www.businesspanama.com/invest-in-panama/colon-free-zone-and-other-free-zones/34/b/. China also is the second largest user of interoceanic canal in Panama after the USA. In June 2018 China has presented a project of the fourth bridge over Panama's canal Chinese companies present economic project to build bridge over Panama Canal. Retrieved on 22 April 2019 from URL:https://www.panamatoday.com/economy/chinese-companies-present-economic-project-build-bridge-over-panama-canal-7217. Chinese embassy made an emphasis on strategic value of the project. That might be a political step in sharing expansion into the region in the context of rivalry with the USA Panama the new flashpoint in China's growing presence in Latin America. Retrieved on 25 April 2019 from URL:https://www.theguardian.com/world/2018/nov/28/panama-china-us-latin-america-canal.

Panama admits its wish for cooperation with China and being proud of its strategic location perceives itself as a gateway to both Central and South America for China Panama: Strategic Gateway for China into Latin America. Retrieved on 22 April 2019 from URL:https://www.businesspanama.com/invest-in-panama/panama-strategic-gateway-for-china-into-latin-america/54/b/. Recently in 2018 Air China has launched direct flights from Beijing to Panama. Two main Chinese Development banks are providing financing in Panama. Now China and Panama are in the advanced process of negotiation about Free Trade Agreement.

Relations between China and Central America increase the pace. Recently in the middle of 2018 the Dominican Republic broke off diplomatic relations with Taiwan and established relations with China. Since that time, due to Export and Investment Center of Dominican Republic, export of commodities from Dominican Republic has already increased Dominican Republic warms to China. Retrieved on 22 April 2019 from URL:https://dialogochino.net/23203-dominican-republic-warms-to-china/. It is also expected that Chinese investment into Dominican Republic will reach US$10 billion soon. Dominican Republic's interest in such collaboration is to develop export to such a huge market, while China is interested in energy, infrastructure and tourism.

China and Costa Rica established diplomatic relations in 2007. Its collaboration is mostly focused on infrastructure projects and collaboration on environment. Costa Rica make a huge emphasis on its ecological advances and progressive environmental policy and China is interested in that field because of its ecological problems. Costa Rica beliefs that collaboration might mutually benefit for China's green policy development Costa Rica endorses China's mega infrastructure initiative. Retrieved on 23 April 2019 from URL:https://dialogochino.net/11597-costa-rica-endorses-chinas-mega-infrastructure-initiative/.

China and El Salvador established diplomatic relations in August 2018 after El Salvador turn from Taiwan to China. Since that time, the countries has already agreed on 13 joint projects in infrastructure and education. China pledged US$150 million to El Salvador in order to develop the projects China pledges $150 million aid to El Salvador as relationship deepens. Retrieved on 23 April 2019 from URL:https://www.reuters.com/article/us-elsalvador-china/china-to-give-150-million-in-aid-to-el-salvador-as-relationship-deepens-idUSKCN1ND0IT.

The series of recent China recognition in US neighboring Central America led to the reaction of the USA. The US State Department called in the heads of diplomatic missions in Dominican Republic, Panama and El Salvador Dominican Republic warms to China. Retrieved on 22 April 2019 from URL:https://dialogochino.net/23203-dominican-republic-warms-to-china/. There is also controversial discussion on whether the USA eliminate incentives on US market access for the countries mentioned above. It seems that establishing relations with China is seen as a threat for the USA.

Furthermore, China's HKND company announced construction of a Nicaraguan Canal which is expected to be an alternative to Panama Canal in 2013 Nicaragua canal: in a sleepy Pacific port, something stirs. Retrieved on 23 April 2019 from URL:https://www.theguardian.com/world/2016/nov/24/nicaragua-canal-interoceanic-preparations. It is expected to be an extremely beneficial strategic project and confirm China's presence in Central America combined with control over logistics through Americas. Nevertheless, the project was actually cancelled in 2017 Is the Nicaraguan mega-canal failure good news for indigenous communities? Retrieved on 23 April 2019 from URL:https://www.opendemocracy.net/en/democraciaabierta/is-nicaraguan-mega-canal-failure-good-news-for-indigenous-communi/. It might be connected with occurrences of several Central American countries including Panama recognized China instead of Taiwan. It meant that China's positions in Central America became stronger prevailing over the US-Taiwan role there. As Panama shifted towards China, there was no need any more for the Canal construction in Nicaragua.

As for Colombia, it has the unique location with access to both Pacific and Atlantic oceans. Recently, it was focused on ties with North America and Europe provided through the Atlantics, but now it is turning towards opportunities from Asia Pacific China eyes expansion of Colombia's Buenaventura port. Retrieved on 23 April 2019 from URL:https://dialogochino.net/9940-china-eyes-expansion-of-colombias-buenaventura-port/.

Recently Colombia has established Economic Activities Center in Buenaventura, which is expected to stimulate economic relations with partners from Asia Pacific. Though the industry ad infrastructure is still underdeveloped in the city, China has showed its intention to invest $16 million into the project Ibid.. Such collaboration seems beneficial for both countries because Colombia might improve its employment rate and get developed infrastructure, while China gets low shipping costs for transportation around Latin America and gets new opportunity to launch business in strategically well located Colombia.

Besides that, China planned to invest into building rail link through Colombia as an alternative to Panama Canal in 2011. The railway would serve as a transport link for commodities needed to China's import. Nevertheless, the project is still under consideration.

Argentina admits China as its strategic partner and is looking for opportunities provided by China's Belt and Road initiative. The government provides extra opportunities for Argentina's businessmen in order to encourage them to export production to China Far from being a threat to Argentina, China is an opportunity. Retrieved on 23 April 2019 from URL:https://dialogochino.net/23486-far-from-being-a-threat-to-argentina-china-is-an-opportunity/. The reason for that is imbalance in trade balance between the countries. Huge affords are being made to improve trade balance in order to establish further economic relationship with China. China's large participation in settlement of Argentina's solar plant in Cauchari in 2019 is also an example of China's interest in energy sector, including renewable energy opportunity China builds Latin America's largest solar plant. Retrieved on 23 April 2019 from URL:https://dialogochino.net/23529-china-builds-latin-americas-largest-solar-plant/. The project I expected to be the largest solar plant in the world.

Now China is the second export partner for Argentina, but 98% of exported goods are commodities Far from being a threat to Argentina, China is an opportunity. Retrieved on 25 April 2019 from URL:https://dialogochino.net/23486-far-from-being-a-threat-to-argentina-china-is-an-opportunity/. Argentina is looking for opportunities to support its small and medium sized companies providing value-added goods by starting exporting its production to China. As for China, it is mostly interested in Argentina's energy and infrastructure sectors, Vaca Muerta oil field is an example. Free Trade Agreement establishment is not a priority for both countries. Argentine International Investment and Trade Agency is established. During the last decade import from China has increased four times.

Nevertheless, during the meeting of China's and Argentina's leaders in 2018, the countries agreed on huge number of agricultural products' export from Argentina. Furthermore, China granted $1 billion for small and medium companies residing in Argentina With new allies, Argentina reassesses its relationship with China. Retrieved on 25 April 2019 from URL:https://dialogochino.net/12583-with-new-allies-argentina-reassesses-its-relationship-with-china/. To add, both countries agreed on increasing tourism exchanges. Consequently, China succeeded in fulfilling all major needs of Argentina and made it loyal towards China's initiative.

Uruguay is looking forward to developing relations with China for a long time. It made attempts to sign Free Trade Agreement with China within Mercosur alliance, but other members did not support the idea. The main reason for such wish for collaboration is intention to export food products to China on better conditions because rival in the industry exporting to China obtain special preferential terms.

China's relations with Mexico seems unusual in comparison to other large Latin American countries. The countries focused not on Mexico's commodities as it usually happens in Latin America, but on Mexico's manufacturing and domestic market. Though recently Mexico allowed foreign investment into its energy sector, China still do not change its focus Latin American workforce swells by two million thanks to China. Retrieved on 25 April from URL:https://dialogochino.net/21768-latin-american-workforce-swells-by-two-million-thanks-to-china/.

China develops economic relations not only with large countries but with small countries as well. China develops relations with Guyana, which has great location close to Brazil which is the largest China's trading partner in Latin America. China perceives Guyana as a great transportation hub which allows easier access to Northern part of Brazil. China intends to provide the capital needed for trading hub construction China extends its reach into Guyana. Retrieved on 28 April from URL:https://dialogochino.net/21413-china-extends-its-reach-into-guyana/. Furthermore, Guyana is one of the world's top oil producers per capita.

China is the largest trading partner for Brazil since 2009. Its turnover with China prevails over the USA. China is also the largest investor of Brazil, which invested $20.9 billion in 2018 Brazil elects Bolsonaro, champion of anti-China rhetoric. Retrieved on 25 April from URL:https://dialogochino.net/12181-brazil-elects-bolsonaro-champion-of-anti-china-rhetoric/. The major investment destinations are energy, agriculture and infrastructure. There is inequality in trade relations: it is complementary - China needs commodities which Brazil is ready to provide. Nevertheless, recently conditions have changed: recently elected new leftist president Jair Messias Bolsonaro shaped anti-China policy. Now he attempts to secure national assets, prevent Brazil from China's expansion and commodities extraction. In context of dissatisfaction with China's policy towards Brazil and its intentions to threaten Brazil's sovereignty, Jair Messias Bolsonaro has already visited Taiwan and now trying to develop relation with the USA.

Besides capital flows, China's investment has a positive impact on employment rate. It also provides an opportunity to make local labor force more skillful. The only country hurt by China's projects in context of employment rate is Mexico. However, 88% of newly created jobs generated by China's projects are located in Brazil, Venezuela, Argentina, Bolivia, Ecuador, Trinidad and Tobago Latin American workforce swells by two million thanks to China. Retrieved on 25 April from URL:https://dialogochino.net/21768-latin-american-workforce-swells-by-two-million-thanks-to-china/.

Nevertheless, China's economic expansion into Latin America might be stopped by a political factor. Out of 22 states that recognize Taiwan, many of them are in Latin America and the Caribbean Rajagopalan M. (2015). China's Xi woos Latin America with $250 billion investments. Retrieved on 15 April 2019 from URL:https://www.reuters.com/article/us-china-latam-idUSKBN0KH06Q20150108. Nevertheless, now political condition changes in Latin America.

China's role in Latin America seems growth and substituting the USA. The rate of the USA policy approval by Latin Americans has decreased from 49% to 24% in 2016 and 2017 respectively. Furthermore, positive impression of Donald Trump policy shares only 16% of Latin America's population New “One Belt One Road” project reach Latin America. Retrieved on 12 April 2019 from URL:https://www.vestifinance.ru/articles/98034.

To conclude, China possess the major share of Latin American market. In addition to that, it collects more political support in context many Central American countries recently recognized China instead of Taiwan. Nevertheless, after new Brazilian president came in the beginning of 2019, Brazil has implemented anti-Chinese policy. Consequently, position of China in Latin America is changing.

Japan is a major trading partner for Mexico, Brazil, Chile and Argentina Japan-Latin America and the Caribbean Economic Relations. Retrieved on 20 April 2019 from URL:https://www.mofa.go.jp/region/latin/latin_e/economic.html. It has deep ties with Latin America since migration of Meiji period. Though most relations of Latin America with most Asian countries became significant only after 2000s, Japan has strong ties with Latin America for several decades.

Source: Annual International Trade Statistic. Retrieved on 2 May 2019 from URL:data.trendeconomy.ru/dataviewer/trade/statistics

There are large Japanese communities in Brazil, Peru, Paraguay. Sao Paulo is the place of the largest Japanese population outside of Japan. Such Japanese communities favor Japanese-Latin American relations. Latin America is an important partner for Japan as it provides raw materials, agricultural products and acts as a market for Japanese manufactured goods.

Japan started to invest largely into Latin America in early 1970s starting with mining projects in Brazil and Chile Myers M. and Kuwayama M. (2016) A new phase in Japan-Latin America and the Caribbean relations. Retrieved on 10 April 2019 from URL:https://www.thedialogue.org/wp-content/uploads/2016/02/Dialogue-Japan-LAC-Relations-WEB.pdf. Most investments were directed into automobile, shipbuilding, steel textile. In 1980s investment volume has decreased because of the crisis in Latin America, so the investment flow experience insignificant growth in 1990s because on the contrary Japan faced crisis. Nevertheless, during 1980s and 90s Latin America was a priority region for Japanese economy and foreign policy. The most significant surge in investment happened in 2005.

Japan used to expand its influence in Latin America by trading, investment and financial aid. Japan started its financial aid worldwide in the end of 1950s by Japan International Cooperation Agency. Since 1980s Japan became the major financial aid donor and in the middle of 1990s financially assisted 140 countries Tuman J.P., Emmert C.F., Sterken R.E. (2001). Explaining Japanese Aid Policy in Latin America: A Test of Competing Theories // Political Research Quarterly Vol. 54, No. 1. P. 87. Retrieved on 9 May 2019 from URL:https://www.jstor.org/stable/449209?seq=1#page_scan_tab_contents. It contributed to improving Japan's image on global scale and to expanding its political and economic interests in various regions. Actually, Japan has the most durable economic relations with Latin America in comparison to other Asian states. According to data published in 2012, Latin America was the second region receiving Japanese financing: 19% of all financing was directed there prevailing over North America, Europe, Asia and Middle East respectively Japanese Finance in Latin America. Retrieved on 22 April 2019 From URL:https://www.thedialogue.org/blogs/2014/11/japanese-finance-in-latin-america/.

In the middle of 2000s Japan became the major donor for Latin America Ibid.. The country contributed most was Brazil. The aid type varies significantly depending on receiving country.

Central America are significantly influenced by Japan's financial aid. Japan is the major provider of financial aid in Antigua and Barbuda, Costa Rica, Dominican Republic, Grenada, Panama Ibid..

Since 1980s Japan removed its focus from Latin America because of domestic conditions and crisis in Latin America. Overall Japan's trade volume with Latin America reached 7% of overall trade volume of Latin America Japan and Latin America and the Caribbean: Building a Sustainable Trans-Pacific Partnership.. In the middle 2010s it declined till 3% share. As for the Latin America's share of Japan's trade volume, it is less than 5%.

Anyway, the pace of trade growth became quite high since the middle of 2010s. The bilateral trade grows index comprised 13% which is higher than bilateral trade growth pace of Latin America with European Union and the USA with figures of 12% and 9% respectively. Nevertheless, it is lower than bilateral trade growth rate of Latin America and China which reached 32% in 2014 Ibid..

The interest finally strongly revived in 2014 when Japan's leader visited Mexico, Chile, Brazil, Trinidad and Tobago and Colombia. The visits were committed right after China's leader did state visit to Latin America. In 2014 Japan-Latin America's trade volume reached $64 billion, comparing to $54 billion in case of Korea and $254 billion in case of China Japan, Latin America boost economic ties as growth slows on both sides of Pacific. Retrieved on 5 May 2019 from URL: http://www.ticotimes.net/2016/03/05/japan-latin-america-boost-economic-ties-as-growth-slows-on-both-sides-of-pacific. Mexico, Brazil and Chile are the main receivers of Japanese import from Latin America.

Source: Annual International Trade Statistic. Retrieved on 2 May 2019 from URL:data.trendeconomy.ru/dataviewer/trade/statistics

Japan usually import copper, iron, meat, coffee, fish, aluminum, pulp and oil from Latin America. At the same time, Japan usually export technologically advanced goods, which do not have competition with locally produced Latin American goods. It means that, in comparison to other rivals, Japanese export do not hurt local production and is complementary for Latin American market.

Japan is more vulnerable to natural resources supply. It has strong lack of agricultural land, forest area and renewable fresh water in comparison to Latin American countries and even China if count per capita. Nevertheless, it has more resources than South Korea.

Source: Annual International Trade Statistic. Retrieved on 2 May 2019 from URL:data.trendeconomy.ru/dataviewer/trade/statistics

Export composition from Latin America to Japan and China is very similar. The majority of export consists of commodities. The only significant difference in export to Japan and China is that Japan imports from Latin America more agricultural products in comparison to China, while China imports more fuel. The main exporters to Japan among Latin American countries are Brazil and Chile, Mexico and Peru are more than three times less significant, share of other countries is even less significant.

Import from Latin America to Japan is more diversified. Top ten import products from Japan to Latin America only represent 30% of the overall import Japan and Latin America and the Caribbean: Building a Sustainable Trans-Pacific Partnership.. Mexico acts as a manufacturing center form Japan. For that reason, Mexico receives 45% of Japan's export to Latin America and investment. Consequently, because of specific composition of import and export, most of Latin American countries have negative trade balance with Japan.

Japan is still one of the most important source of foreign direct investment in Latin America. It is perceived not only as capital flows but also a source of technology, labor force skills development, employment opportunity.

Japan prefer to collaborate in a form of Economic Partnership Agreements instead of widespread Free Trade Agreements. EPA covers wider range of collaboration agreements than FTA. Mexico has already signed EPAs with Mexico, Chile, Peru. Signing EPA with Colombia is under negotiation. That fact seems interesting because Japan has signed or about to sign EPAs with the same Latin American countries as South Korea did or about to do.

Important way of economic presence is large trading Japanese companies residing in Latin America. It participates in products' export to other countries, but is not counted as bilateral trade. It is used as a way of export for Japan to other countries. For example, in automobile field Japanese companies thus comprise a quarter of Mexican automobile export. This type of Mexico's economic presence seems beneficial for Latin American residents because it provides additional jobs.

Japan has deeper ties with Latin America which were established long ago. Large Japanese community lives in Latin America that supports Japanese presence. Japan shapes its economic policy more wisely. It emphasis its willing to import not only commodities but also agriculture and textile. In addition to that, Japan has a positive image of financial aid donor. Furthermore, it seems as an attractive partner because it exports high quality electronics and automobiles. Finally, it may also provide new technology and establish better management system when develop projects in Latin America. Latin American residents may improve its skills and manufacturing system by Japan's share of knowledge.

To conclude, rivalry seems high in Latin America. Both China and Japan has already invested $210 billion there Spanning the Economic Gap Between Asia and Latin America. Retrieved on 26 April 2019 from URL:https://thediplomat.com/2017/03/spanning-the-economic-gap-between-asia-and-latin-america/. China comprises approximately a half of trade volume between Latin America and Asia Pacific Economic relations between Latin America and the Republic of Korea: advances and opportunities. Santiago, ECLAC, 2015, p.24.

URL: https://repositorio.cepal.org/bitstream/handle/11362/37919/S1500286_en.pdf?sequence=1&isAllowed=y . South Korea comprises only 7% of Asia Pacific's export to Latin America and about 11% of its import respectively Lexutina Y.V. (2016). Latin America and the Republic of Korea: Trade and economic aspects of collaboration in 1948-2015. P. 42. Japan diversify its investment to Latin America significantly since 1990s so that locals may benefit from it.

Latin America's major export destinations are China, Japan and South Korea comprising 46.4%, 16.4% and 8.9% respectively. Latin America's share in China's, Japan's and South Korea's export is 46.3%, 15.5%, 12.8% respectfully Bartesaghi I. (2014). Latin America and Asia Pacific Realities. Defining the agenda, p. 18. Retrieved on 5 April 2019 from URL:http://www.observatorioasiapacifico.com/data/OBSERVATORIO.Images/ Publication/temp/20141126042324ISISLatinAmericaandAsiaPacificRealities.Definingtheagenda.pdf. Consequently, South Korea is likely to face strong competition from China and Japan.

3.2 Risks and threats caused by local conditions in Latin American countries

Latin America didn`t stand aside of global changes in world economy. Among many risks that is common for Latin America are:

· Political;

· Social;

· Economic.

Latin American countries policy is based on UN principles (rule of law, cooperation in solving global problems), they actively participate in world processes. At the same time, they develop interregional relations trying to create a new political and economic world center.

Nevertheless, one of the biggest risks in Latin America is high criminalization in society that often overweight state institutions. Most crimes are related to drugs that have already crossed the borders of Latin American region. Nowadays the major drug cultivators are considered to be Colombia, Peru, Bolivia, Ecuador, the major drug distributors are Mexico and Colombia. Recently, Cuba and Venezuela joined global traffic as a drug couriers Drug trafficking: The growing Latin American business. Retrieved on 10 May 2019 from URL:https://latinamericanpost.com/20104-drug-trafficking--the-growing-latin-american-business.

Colombia is the starting point of the most powerful South America's drug trafficking cartel called “Clan del Golfo” operating in alliance with “Sinaloa Cartel”. It supposed to be one of the most significant deliverers of drugs to the USA. It is also the major drug source in Europe, delivering drug traffic through Peru and Bolivia Mexico, Central America and the Caribbean. Retrieved on 10 May 2019 from URL: https://www.unodc.org/unodc/en/drug-trafficking/mexico-central-america-and-the-caribbean.html. Recently, Venezuela has also gain a higher role in Latin America's drug trafficking.

Uruguay became the first country in the world comprehensively legalized marihuana in 2013. The aim of the legislation law was to reduce revenue of drug cartel operating in the country and to reduce other drugs consumption.

The further risk is low level of labor force education which leads to worse performance. Low quality of life is result of bad educational system that leads to deficit of high-quality specialists and low labor productivity. If we examine total enrollment in tertiary education, regardless of age, just following on from secondary school leaving, we will reveal the following findings. Chie has the highest rate in Latin America of 83.682% which is very similar to the USA index of 88.81% International Institute for Applied Systems Analysis: Population Breakdown by Highest Level of Education. Retrieved on 10 May 2019 from URL: https://ourworldindata.org/tertiary-education. Nevertheless, it is less than South Korea's 95.35% index.

Further goes Argentina (79.99%), Colombia (50.1%), Costa Rica (50.01%), Cuba (49.4%) and Brazil (46.45%). Guatemala (18.33%), Honduras (21.2%), Jamaica (27.83%) and El Salvador (29.17%) are among outsiders. Generally, the figures are not so high.

Nevertheless, an increase of share of population fulfilled secondary and tertiary education is expected. For example, according to prediction of the International Institute for Applied Systems Analysis, population achieved secondary education level in Guatemala will increase from 3.06 million people to 4.98 million people in 2015 and 2025 respectively; number of people achieved tertiary education level there will also increase from 69265 in 2015 to 118165 in 2025 Ibid. .

Despite high economic potential of this region, Latin America countries faced problems in exporting their goods as they don`t have so much comparative advantage on international markets. Moreover, they didn`t manage to diversify their export both in geography of export markets and list of products export. More than 50% of Latin America export are mineral resources that make countries dependent on market fluctuations and developing countries` growth rates. For example, recently the USA imposed sanctions on Venezuela's oil industry that almost ruined country's economy Venezuela Economic Outlook. Retrieved on 24 April 2019 from URL:https://www.focus-economics.com/countries/venezuela.

At the same time countries have lack of budget surplus, decrease of FDI and increase of international funding rates. For example, Latin America has negative trade balance with South Korea. Furthermore, in 2018 Argentina had 47% Argentina ends 2018 with second highest inflation in Latin America. Retrieved on 10 May 2019 from URL:https://www.france24.com/en/20190115-argentina-ends-2018-with-second-highest-inflation-latin-america of inflation rate that was result of governmental termination of subsidizing internal prices. It is the second worse inflation index in Latin America after Venezuela. That led to stop of international long-term funding because investors didn`t want their money to be devaluated.

Venezuela also seems unattractive for foreign investments and export. There is a huge uncertainty about the country. During several years Venezuela experience an acute socioeconomic crisis which leads to currency devaluation. Recent political events also increased social tensions and worsened economic indexes. It decreased the share of solvent population, increased inflation rate, etc. For example, inflation index since January 2019 till April 2019 comprised 665%, while annual inflation rate counted from April 2018 till April 2019 reached 1.3 million % National Assembly of Venezuela declared inflation increase. Retrieved on 9 May 2019 from URL: https://tass.ru/ekonomika/6417685. Economic activities decrease, the country usually suffers from recurring electricity blackouts.

In recent years, Ecuador is also facing problems with bringing international investments. Among main reasons for that are: high dependency on oil prices, high credit risk and bad anti-monopoly legislation. Only Argentina and Venezuela have higher credit risk than Ecuador. Moreover, recently Ecuador government has increased tax for currency withdrawal from 2% to 5%, that made international investors to leave the market.

Corruption is also one of the main factors decreasing the region's economic attractiveness. Uruguay is the country least influenced by corruption in Latin America and ranked 23 in world index of transparency. Chile possess 27th position in the ranking Corruption Perceptions Index 2018. Retrieved on 10 May 2019 from URL:https://www.transparency.org/countryhttps://www.transparency.org/cpi2018. Venezuela is country of the highest corruption level in Latin America being ranked 168 out of 180 and sandwiched between Iraq and Burundi. Nicaragua, Guatemala and Mexico are also ranked low possessing 152, 144 and 138 positions respectfully Ibid..

The table below presents aggregated information on some Latin American countries` risks.

Thus, identification of Latin America risks and problems is important for working out right strategy for cooperation between Republic of Korea and Latin America.

Actually, Latin American countries attempts to increase its investment attractiveness for foreign direct investments solving its structural issues. For example, in order to improve Argentina's competitiveness and enhance economic collaboration, Argentina's leader administration introduces more economic reforms in 2018. It is aimed at international investors attraction and improve living standards to increase middle class and make Argentina's market more demanding for foreign investors. In addition to that, it plans to handle the issue of poverty reduction and looks for opportunities to create new jobs. Argentina also intends to export its beef, fruits and seafood to South Korean market Post-reform Argentine economy ripe for foreign investments, trade. Retrieved on 10 May 2019 from URL:http://www.koreaherald.com/view.php?ud=20180528000635&ACE_SEARCH=1.