Chinese investment in Brazil fell 78 percent to US$1.3 billion in 2022, its lowest value since 2009, according to Brazil-China Business Council (CEBC) data cited by Reuters.
Brazil fell from the number one destination for Chinese investment in 2021, to number nine in 2022, placing it behind fellow South American country Argentina, which received about US$1.34 billion. The report authors caution, however, that this change “does not necessarily reflect China’s disinterest in Brazil”.
They instead point to delays in obtaining government licenses, which in turn delayed the implementation of some capital-intensive projects and reduced the total volume of investments.
Between 2007 and 2022, China invested US$71.6 billion in Brazil to finance a total of 235 projects, which are predominantly in the electricity, manufacturing, and IT sectors. The study identified electricity and IT, along with infrastructure, vehicles and electric batteries, as sectors that continue to be promising for Chinese investors.
Half of new investments in 2022 were in electricity, which captured 45.5 percent of total investments. IT came in second with 25 percent, followed by motor vehicles, infrastructure and agriculture at 6 percent each. Textiles and materials for medical or dental use accounted for 3 percent each.
China financed 32 projects in Brazil last year, a record high that represents a 14 percent increase over the previous year. As CEBC reported, it was the loss of capital-intensive projects like the US$2.1 billion investment by Honbridge mining company – held up for the lack of an environmental licence – that undercut what could have been a banner year.