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Chinese investment in Brazil plunges 78% in 2022, hits lowest since 2009

Published Aug 29, 2023 07:20AM ET Updated Aug 29, 2023 11:42AM ET
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By Bernardo Caram

BRASILIA (Reuters) - Chinese investments in Brazil tanked 78% in 2022 compared with the previous year, hitting their lowest in 13 years as funds committed to resource projects plummeted, the Brazil-China Business Council (CEBC) said on Tuesday.

China, Brazil's largest trading partner, funneled $1.3 billion in direct investments into the country last year, the lowest level since 2009, according to a CEBC study. The performance contrasts with overall foreign direct investment (FDI) in Brazil in 2022, which skyrocketed by 95% to $90.6 billion, highest in a decade.

Last year, just 28% of announced Chinese projects worth $4.7 billion went ahead, the CEBC said. That compares poorly with 2021, when pledged investments of $5.9 billion were fully realized, bolstered by two oil projects worth nearly $5 billion.

That 2021 result established an unfavorable yardstick for comparison, said CEBC research head Tulio Cariello.

Some of the projects could have been held up by license approvals, Cariello said, "which may eventually postpone execution."

Chinese mining firm Honbridge, for example, announced investments worth $2.1 billion that failed to proceed due to a pending environmental license.

While China-sourced funds channeled to Brazil witnessed a sharp decline, Chinese investments globally saw a modest uptick of 2.8% over the past year, growing to $116.8 billion.

Other factors affecting Chinese investments include the Ukraine conflict and the U.S.-China rivalry in Asia-Pacific, which prompted Beijing to prioritize "Belt and Road Initiative" investments that exclude Brazil, said Hsia Hua Sheng, an economist from the Sao Paulo Business Administration School of the Getulio Vargas Foundation (FGV-EAESP).

Leftist President Luiz Inacio Lula da Silva, who traveled to China in April, has been endeavoring to bolster ties with Beijing, but recent economic indicators from the Asian powerhouse have sparked concern that it might be losing its ability to sustain robust growth.

Chinese investment in Brazil plunges 78% in 2022, hits lowest since 2009
 

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Comments (1)
Ac Tektrader
Ac Tektrader Aug 29, 2023 2:50PM ET
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shows the world what kind of confidence China has in its currency union, BRICS, when it comes to its members....
Marcos Lemos
Marcos Lemos Aug 29, 2023 2:50PM ET
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I am showing to all company s this new digital currency is not Union Money Digital? Brazil continue to have the $Real? Pix the same Zelle in USA? And the next Digital in the market information? It’s not money to investment in Stocks Market autside Brazil? This new currency name is DREX. Going to be for big trade inside only does Brazilians Bank s? Because its not regulations out the Country? Going to be in the Brazil s market in 2024. China, Russian, Indian and South Africa? Don’t have anything to do about this new digital currency. Brazil is together only on the Bank BRICS, with all sinners in 2015 with Ex President Dilma. And today she is the President of BRICS. Power laid in Brazil and all world today. USA needs to make one beautiful reception with Dilma and Lula in USA to be more union to talk with directions we will be on the future business trades and how much taxes become fair to all Countries and with no resection’s and more trust? With the BRICS.
 
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