Chinese Investments in Brazil Moving Ahead

 

Companies in China have diversified their investments in Brazil in recent months, in spite of political differences between the Governments of both countries.

One of the highlights, according to Brazilian newspaper O Globo, is Chinese construction company CCCC, which won the Salvador-Itaparica bridge concession, a project worth $ 7.7 billion brazilian reais (USD 1.38 billion), one of the largest chinese projects in Brazil.

“This is the first investment in land transport, an area that the Chinese have always looked at, but only now are starting to close deals,” said Tulio Cariello, director of content and research at the Brazil-China Business Council (CEBC).

Cariello says that there are also developments in agribusiness, not only in the purchase of Brazilian grain or protein, but also the acquisition of a swine cooperative, chemicals, partnerships for corn production, among other initiatives.

Shennong Drones, a company specialized in batteries and drones for agribusiness, launched a factory in Uberaba, Minas Gerais State, at the end of 2020, which is expected to initially generate investments of 10 million reais (USD 1.79 million) and 215 jobs.

Haitao Cheng, president of the company for Brazil, told ÉPOCA that the pandemic delayed plans somewhat, but that “even so, we continue to work, as we have a lot of hope in Brazil”.

Automobile maker Caoa Cherry jumped from 24th to 11th position in the auto market, between 2017 to 2020, while Xiaomi is already among the leaders in cell phones and Realme, just arrived in the country, wants to be among the main companies in the country in 5G devices.

“Brazil will be for us a strategic hub and a gateway to the Latin American market. We are coming up with a long-term strategy to become one of the most important players”, informed the company in a statement, adding that having a factory in the country is part of its long-term plans.

“Realme was founded in 2018 and, in less than three years, it has already become one of the five best-selling smartphone brands in 15 regions of the world, such as Russia, Thailand and India. We intend to apply this same strategy in Brazil and become one of the three largest smartphone brands in the country in five years”, it adds.

XCMG, a manufacturer of agricultural machinery, opened its financial institution in Brazil, its first outside China.

Likewise, IT companies such as TikTok, Kuaishou and Bytedance are expanding their share of the local market.

Spic Brasil, a subsidiary of the Chinese State Power Investment Corporation, announced that it was entering as a partner in the Porto do Açu thermoelectric complex, in São João da Barra, Rio de Janeiro, partnering with companies such as Prumo, Siemens and BP.

The deal is initially valued at 1.5 billion reais (USD 270 million), but may reach 5 billion reais (USD 900 million) with the planned expansions.

The lawyer Rogério Ribeiro, from Vallya Investimentos, who assisted the Chinese company, says that the approach started in 2016: “The path to attract Chinese companies is a long-term one”, he told O Globo.

Roberto Dumas, professor at Insper, believes that the diplomatic noise between the two countries creates some discomfort, but that the Chinese have a strategic vision in Brazil: “Direct links between local governments and business sectors with the Chinese were essential to maintain the strong connection”, Dumas said.

The forecast for Chinese investment in 2021, according to Thomas Law, president of the Brazil-China Cultural Institute (Ibrachina), is of growth.

“From 2021 onwards, we will have a recovery in the world economy and many Chinese companies will want to look better at Latin America. Trade relations are showing that they are running on their own and any diplomatic problems are already well resolved, with this release of vaccine supplies, with Huawei allowed to participate in 5G. All of this should further encourage investments”, Law added.

 

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