Technical Note - 2022 - Abril - Number 08- Dinte

Research for investment cooperation between Brazil and China

Author(s): Renato Baumann, Gilberto Libanio, Mário Joplin, Hugo Lasco, Scarlet Queen, Marcelo Nonnenberg, Zhou Mi, Xu Man, Tang Jie, Kou Chunhe and Li Wei. 

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China and Brazil are both important countries for two-ways investment. In the last two decades, companies from both countries tried to explore the opportunities of cooperation. Both governments have been trying to improve the investment environment. The Chinese Academy of International Trade and Economic Cooperation (Caitec) and Ipea agreed to cooperate with a joint research on the two-ways investment cooperation in 2021 to help the related stakeholders better understand this issue.

This report draws a general picture of the investment between China and Brazil. The Belt and Road Initiative (BRI) has been an important platform for the bilateral investment cooperation between the two countries, including in the policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bond. After its proposal in 2013, quite a lot of achievements show us the good effects of cooperation, which in turn attracts more interests of cooperation from other countries.

The coronavirus (covid-19) has changed the world with serious lockdown policies and slowdown of movement of people and cargo. China achieved positive gross domestic product (GDP) growth in 2020 and works hard to promote more resilient and high-quality development in the post-pandemic years. The wide deployment of new technology and encouraging policies for further opening-up have attracted foreign investors. Data from the Ministry of Commerce (Mofcom) of China shows the foreign investors’ non-financial investment in China reached US$ 91 billion from January to June 2021, an increase of 34%, compared to the same period in 2020. As for the outward investment, the BRI regions are attractive. During the first 6 months in 2021, Chinese non-financial direct investment reached US$ 9.6 billion, an increase of 18% compared with the same period of last year. These investments correspond to 17.8% of all outward investment, 2 percentage points higher than last year.

Brazil has for several decades been a major recipient of foreign direct investment (FDI), frequently listed among the top five destinations for FDI in the world. The Belt and Road Initiative and Brazil’s National Development Strategy and Investment Partners Plans will provide plenty of new opportunities for a more intense Brazil-China cooperation.

This report includes 7 chapters following this introduction. Chapter 1 reviews the global FDI flows, including the activities and related mechanisms’ process. Chapter 2 introduces the investment cooperation policies of China and Brazil, so as to let investors understand the environment they may face. Chapter 3 discusses the bilateral infrastructure investment cooperation. Chapter 4 highlights the trade and investment cooperation. Chapter 5 sketches the Belt and Road Initiative, including its frame, background, development and achievements. Chapter 6 discusses the post-pandemic investment cooperation and chapter 7 provides suggestions for further joint initiatives.