China plans to further invest in the Brazilian infrastructure sector

Brazil is experiencing the third wave of investments from China, now aimed at infrastructure and energy, according to experts. The focus of Chinese resources changed from raw material by the end of the 90s and early 20th century to the industry since 2005, and now reaches two strategic sectors of the Brazilian economy. With extensive experience in infrastructure investments – which have driven the Chinese growth forward in recent years -, the Asian country is now seeking opportunities in this field in Brazil.

– There is a kind of Chinese investment evolution in Brazil. We have been looking at a third phase already, while the others have not been exhausted yet. It started in the energy industry, with State Grid, and now there is much interest in railways. The Chinese are waiting for the auctions – declared the chief in Commercial Promotion and Investments sector of the Brazilian Embassy in China, Guilherme Billi.

Those who currently go to the Embassy in Beijing are mainly interested in railways, energy and in the automobile industry, he says. In the visit to Xi Jinping, a memorandum of understanding in this field was signed. In August, China Railway Eryuan Engineering Group Co (CREEC) was qualified to develop a technical feasibility study for the section between Sapezal (Mato Grosso) and Porto Velho (Rondônia) of Transoceânica railway, whose project is to link Brazil to the Pacific.

– Chinese companies have been going to Brazil to be aware of the laws, but they are waiting for the bids and auctions to take place. All major railway groups in China want to operate in Brazil, from the supply of cars and locomotives to the construction and administration of railways, declares Billi.
This industry is a win-win situation, explains the Diplomat: there is gain due to investment in the fields and also advantages of helping building a cheaper and effective logistics in Brazil for the flow of products to China.

It is so important to notice the potential of these Chinese investments in infrastructure that the Confederação Nacional do Transporte (National Confederation of Transport – CNT) has set up an office in China one year ago. The idea is to help look for these investors and, at the same time, explain the opportunities in the country and the operation of the Brazilian market, in addition to work as a link between Brazilian and Chinese companies.
– Brazil needs almost US$ 1 trillion in infrastructure and urban projects investments. Chinese companies are interested and looking forward to these opportunities, declares José Mario Antunes, businessman in charge of the office in Beijing.

Billi and Antunes do not see a weaker growth of Brazilian economy as an obstacle to the arrival of the yuans. The head of the Commercial Promotion and Investments industry of the Brazilian Embassy in China says this has not been a concern for those looking for the representation of Brazil in Beijing:

– The Chinese know Brazilian economy potential in the long-term and keep that in mind to invest.

This opinion is shared by the CEO of the Sociedade Brasileira de Estudos de Empresas Transnacionais e da Globalização Econômica (Transnational Companies and Economic Globalization Brazilian Society  – SOBEET) Luís Afonso Lima, who is also an economist at Mapfre Investimentos. He says that the low growth may influence on the short term, but the Chinese investment tends to grow in the country.

– Investments as of 2011, for example, can be made until 2018. China is a relatively new investor in Brazil and these contributions tend to grow. The country has accumulated many reservations and there is an excess of saving, declares the CEO of SOBEET.