China to conquer Brazil
In the midst of trade frictions with the United States, China is seeking to close in on Brazil and other BRICS countries (Russia, India and South Africa), the 10
China is currently Brazil’s leading trade partner. Between 2003 and 2018, Chinese businesses invested $54 billion in Brazil, via approximately one hundred projects (Brazilian Ministry of Planning). In 2017 alone, Chinese investments totalled almost $11 billion. During Q1 2018, exports to China represented 26% of all Brazilian exports, compared to only 2% in 2000 (Brazilian Ministry of Development Industry and Foreign Trade). This is a welcome influx of capital for this country whose economy has been weakened by an historic recession in 2015/2016 and public debt that has grown significantly over recent years.
Trade has also diversified enormously. Prior to 2010, investments in Brazil were primarily intended to supply China with food and energy. Over the past few years however, they have focused more on the telecommunications sectors, the automotive industry, renewable energies and even financial services.
Several Chinese banks have already set up subsidiaries in Brazil, including ICBC, China Construction Bank (CCB) and the Bank of Communications (BoCom). This could see China’s investments increase further and allow it to secure its own financing.