In 2021, Chinese companies invested US$5.9 billion in Brazil. According to the Brazil-China Business Council, the figure is the highest recorded since 2017 and 208% higher than that recorded in 2020, when global businesses and Chinese investments in particular were affected by the consequences of the covid-19 pandemic.
The data are part of a study that the council released today (31). The document indicates that, even in a context of global instability, Chinese companies implemented 28 large business projects in Brazilian territory, resuming the pace of growth that started in 2016 and interrupted in 2019.
According to the coordinator of the study, the director of Content and Research of the council, Tulio Carrielo, with the resumption of interest from Chinese entrepreneurs, companies that were already operating in Brazil expanded their presence and new actors arrived in the country. An example of this second case is the vehicle manufacturer Great Wall, which bought the Mercedez-Benz plant in Iracemápolis at the beginning of the second half of 2021 and made its presentation official in January this year.
“The company’s internationalization strategy, including for North America, involves Brazil, the first country to produce [os veículos da Great Wall] in the Americas. We are the gateway to the entire continent, as the company intends to learn here how to do business with other continental countries”, stated the company’s government relations director, Pedro Betancourt, assuring that the company’s business plan foresees a long term relationship.
According to Tulio Carrielo, even if positive when analyzed in perspective, Chinese investments, in 2021, returned to the levels recorded in the period immediately before the pandemic. In 2018, for example, there were 31 major Chinese projects implemented in the country. In 2017, 28. In addition, with the gradual resumption of economic activity after some countries vaccinated a significant part of their populations, not only Chinese investments, but foreign contributions in general increased in Brazil.
The study indicates that the increase in Chinese investments in Brazil was “superior” to the expansion of Chinese investments in other countries.
“The trend is that there will be no new major peaks in future investments, that there will be stability for at least some time, as it seems to me that [os investidores chineses] now they are prioritizing the quality of the projects, to the detriment of quantity”, said Carrielo, citing Brazil as the “center of gravity” of Chinese investments in South America.
Also according to the study by the Brazil-China Business Council, the electricity sector attracted 13 of the 28 projects installed in the country throughout 2021, that is, 46% of the total. Another highlight was the information technology sector, with 10 projects – almost the same number (12) of sectoral projects implemented between 2007 and 2020.
In terms of value, the oil sector absorbed 85% of the US$ 5.9 billion that Chinese companies allocated to Brazil in 2021, surpassing the previous dominance of the electricity sector.
“We are reaping the rewards of a relationship that spanned many years,” said economist Tatiana Rosito, who is a member of the board. For the economist, despite the uncertainties and instabilities, Chinese companies are making long-term bets on Brazil. The opinion is confirmed by José Renato Domingues, corporate vice president of energy CTG Brasil, in the country since 2013.
“In these nine years, we have acquired assets and companies to operate plants and wind farms. The main attractions that the company sees is the opportunity for growth. And one of the aspects we observe is the respect for contracts and intellectual property”, commented Domingues. Second, since the beginning, when it took on the challenge of building and operating in its home country, the largest hydroelectric plant in the world, the Three Gorges, CTG has been looking to Brazil.
“To this day, whenever we receive our Chinese colleagues, we take them to visit the Itaipu Hydroelectric Power Plant, which inspired the Three Gorges project and continues to inspire the Chinese.”