Chinese companies are looking to increase their investments in Latin America and expand beyond their focus on mining and resources—a development that experts say could be needed if China wants to avoid tensions in the region.

In Africa especially, China has been criticized for channeling much of its investment into natural-resource extraction, for importing Chinese labor on infrastructure construction projects and for swamping local markets with cheap goods.

The concern now is that a similar pattern could emerge in Latin America. "China gets what it wants but Latin America doesn't think the same," said Wu Guoping, assistant director of the Institute of Latin American Studies, Chinese Academy of Social Sciences, at a conference this week on Chinese investment in Latin America.

Warning that trade and investment between China and Latin America wasn't "complementary" and entailed risks, he added, "China has to look for a new strategy for Latin America."

Chinese foreign investment in Latin America surged to $10.54 billion in 2010, the most recent figure available, from $7.33 billion in 2009. That investment, plus increasingly active lending in the region, has given China greater sway in an area long considered a bulwark of U.S. influence.

Much of China's focus has been in resources. In 2010, state-owned China Petrochemical Corp., or Sinopec, purchased 40% of Repsol YPF SA's Brazilian unit for $7.1 billion in one of the largest Chinese oil acquisitions ever.

But China is looking for new markets to manufacture and sell more sophisticated products such as cars and power-generation equipment. It could also help avoid tensions such as those with African countries—a subject of discussion during a visit by African leaders to Beijing in July.

During a trip to Latin America in June, Chinese Premier Wen Jiabao proposed a $5 billion cooperation fund for infrastructure investment and a $10 billion credit line to support the construction and infrastructure industries in the region.

Liu Xia, an overseas investment official with the National Development and Reform Commission, China's top economic planning body, reiterated China's pledge to diversify investment to include infrastructure, manufacturing, agribusiness and forestry. "Pushing infrastructure investment will help improve the quality of our industries," Ms. Liu said, adding that the China-Latin America relationship would become even "more crucial" over time.

Enoque Flausino of S?o Paulo-based merger and acquisition company Serfinan, said Lenovo Group Ltd.'s (0992.HK) recent decision to purchase Brazilian consumer-electronics group CCE for $147 million in cash and stock was a cause for optimism. "We want to see it as a new sign of Chinese investment in broader sectors such as consumer goods," he said.

Mr. Flausino estimated there was around one deal a month on average involving Chinese investment in the region, ranging in value between $200 million and $300 million for each deal. Around 40% were in Brazil and most still involved natural resources.

Chinese car maker Foton Motor Co. (600166.SH) will invest $300 million to build an auto plant in the Brazilian state of Bahia, the state government said Tuesday.

XCMG Construction Machinery Co. Ltd. (000425.SZ) is setting up two factories in Brazil—a market where its annual sales reached $200 million last year—and says it is considering building more plants in other Latin American countries.

Weichai Power Co. (000338.SZ) is exploring opportunities, too, including possible commercial vehicle manufacturing in the region. Shanghai Electric Power (600021.SH) Generation Group wants to move from supplying power-generation equipment to constructing and possibly operating power plants in target markets including Ecuador, Chile, Colombia and Peru.

However, not everyone embraces investment by Chinese companies in the area. Brazilian manufacturers are especially concerned by the prospect of a more active China in the region, said June Teufel Dreyer, professor of political science at University of Miami.

"Chinese-made shoes are cutting into the shoe industry there and Chinese cars have the potential to bankrupt locally made ones," she said. "Still, it's a matter of whose ox is being gored. Many sellers of raw materials are very happy to have the Chinese market."