Chinese investment in Brazil totalled US$1.3 billion in 2022, a 78 percent drop from the previous year and its lowest level since 2009, according to a report issued by the China-Brazil Business Council on Tuesday.
The amount of capital invested by the Asian giant in the biggest Latin American economy is far from the US$5.9 billion spent in 2021, as compared by the business entity, taking into account confirmed projects in its analysis.
Thus, Brazil, ahead of the “rankings” of countries with the most investments from China in 2021, “fell eight positions” last year, according to the report.
Among Latin American countries, it was only behind Argentina, which received US$1.34 billion.
However, the business council claimed that this information “does not reflect a lack of interest by China to invest in the country."
The plunge “is explained by the nature of confirmed projects and the lack of large enterprises in the energy, mining, infrastructure or oil areas, which usually demand more capital”, said Tulio Cariello, director of contents and research of the Brazil-China Business Council.
On the other hand, the number of completed projects was 32 in 2022, breaking records since 2007 and a 14 percent increase as against the previous year.
Another factor which accounts for the decline in the capital flow, according to Cariello, is that large enterprises announced last year “remain on paper for a long time, generally due to the required environmental licences”.
That is the case of a US$2.1 billion investment announced by Honbridge, a firm based in Hong Kong which focuses on mining.
As for the destination of funds, South-Eastern Brazil was the top pick: the state of São Paulo attracted 45 percent of capitals, followed not very closely by Minas Gerais (21 percent).
The drop in investments from China in Brazil took place in a context of significant growth of foreign investment in the country, which climbed by 95% in 2022 from 2021, to US$90.6 billion, according to Central Bank data quoted by the business council.