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Chinese Investment in Brazil

By December 7, 2017 No Comments

The Brazilian market is known for it’s heavy protectionism and restrictive legislation toward foreign investors, however recently the government has made a number of steps to repair the troubled economy. South America is characterized by several negative connotations and although progressive Brazil is not exempt from this, Corruption and political instability has lead the country into its worst recession since the formation of the reporting body. This current situation has lead to revisions in national policy and concessions with regard to foreign investment, which will come as great news for companies looking to break into the market.

Currently Brazil’s large consumer market and resources, including access to other latin american markets, are under the watch of large economies with vested interest in any opportunities that may avail themselves. The country has a number of trade partners, namely Russia and China, whom are unfavourable in some markets due to their business practises ; This however is not just cause to overlook the Billions of dollars of investment and potential investment in key sectors of the economy. Brazil’s policies have so far grown the national economy by means of strategic partnerships and trade deals which kept the country in control of key assets and protected its citizens. The view by some that further opening markets may lead to severe consequences and other factors may be at play in the build up to next year’s elections.

The reality is that the world as a whole is under heavy economic strain and developing economies can do little to nothing to grow their local markets internally. As economics goes, where there is demand there must be supply and vice versa; China’s large capital investments in Brazilian infrastructure and proposed investments could turn the economy around positively. The current administration is looking to privatize a number of the countries at risk assets after negative returns bought on my corruption and mismanagement by former executives. It is important to consider that investments by current Chinese investors indicate a long-term plan, and the large Chinese population is just as likely to require supply of the vast agricultural resources Brazil has to offer. There are enough opportunities on both sides to minimize any exploitation and increase market share for all parties involved.

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