Sep 02, 2022

Chinese Investments in Brazil Increase After Pandemic

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

According to the Brazil-China Business Council, China invested US$ 5.9 billion in Brazil during 2021, which is the most since 2017 and double the amount in 2021 during the peak of the Covid-19 pandemic. In 2021, China initiated 28 large projects in Brazil.

In recent years, much of the Chinese investments in Brazil have focused on electrical generation both hydroelectric and wind and information technology, but the focus has shifted somewhat in 2022 to petroleum and the auto sector. The Chinese company Great Wall finalized the purchase of a closed Mercedez-Benz production facility in early 2022, which is their first production facility in the Americas.

Of the 28 total projects in 2021, 13 involved the electrical generation sector, 10 involved the information technology sector, but in terms of total value, the biggest investments involved the petroleum sector which accounted for 85% of the total of US$ 5.9 billion. Petroleum projects surpassed electrical generation projects, both hydroelectric and wind, which had been the leading sectors for Chinese investments prior to the pandemic.

Going forward, the Chinese are emphasizing the quality of the projects instead of the quantity of the projects and China considers Brazil as the "center of gravity" for investments in South America.