Chinese companies invest less in Brazil from January to September

7 November 2011

Sao Paulo, Brazil, 7 Nov – Chinese companies invested US$333 million in Brazil from January to September, a figure that was 25 percent lower than the US$444 million invested in 2010, according to figures from the Brazilian Central Bank cited by the Brazilian press.

From January to September Brazil received foreign direct investment (FDI) worth US$50.5 billion, a rise of 124 percent against the US$22.557 million posted in 2010.

Amongst the reasons pointed out by some analysts for the drop in the amount invested by China this year are the protectionist measures that have been adopted by the Brazilian government – such as tariffs on importing Chinese footwear, to protect local manufacturers – and the deepening of the European crisis, which has led to investors re-assessing their development plans.

“There has really been a reduction (in investments). Brazil has the feeling that some sectors are being invaded by the Chinese and have imposed barriers [increased taxes on foreign cars was the latest measure]. Because of this no investor feels safe and confident enough to bring so much money into hostile territory. So, in some cases, they review where and in what they decide to invest. But I can say that China continues to see Brazil as great opportunity,” said Tang Wei, the director general of the Brazil-China Chamber of Economic Development (CBCDE).

In 2011, Chinese companies invested in Brazil in the machinery, automotive, oil and, to a lesser extent, the mining sector, according to Tang Wei, of the Brazil-China Chamber.

But Tang Wei noted that the attention of the Chinese was also focused on the services sector as four of the main Chinese banks were studying, setting up projects in Brazil or waiting for legal authorisation to start operating.

Despite a drop in the level of investments against last year, the director general of the Brazil-China Chamber said that China was unlikely to end 2011 with a lower level of investments than in 2010. (macauhub)