Chinese investments in Brazil plummeted in 2022 by 78% to $1.3 billion, the lowest since 2009, according to a report released by the Brazil-China Business Council (CEBC).
However, the number of projects financed by China in Brazil reached a record 32, a 14% annual increase.
Last year, half of the new Chinese projects in Brazil were in the electric sector, accounting for 45% of the total investment value.
The information technology sector came second (25% of the projects), followed by automotive (6%), infrastructure (6%), agriculture (6%), textiles (3%), and medical and dental materials (3%).
In 2022, Brazil dropped to ninth place among the destinations for Chinese investment, while in 2021, it was at the top of the list.
It was overtaken by another Latin American country, Argentina, which received about US$1.34 billion in investments in 2022.
The CEBC noted that the decline in investments does not necessarily reflect China’s disinterest in investing in Brazil.
The report’s authors pointed out that delays in obtaining government licenses held back the implementation of some capital-intensive projects, thereby limiting Chinese investments.
For example, a $2.1 billion investment announced by Honbridge Mining did not materialize because the environmental license was not obtained in time.
The study suggests that some sectors of the Brazilian economy remain promising for Chinese investors, such as infrastructure, information technology, electricity, electric vehicles, and batteries.
From 2007 to 2022, China invested a total of US$71.6 billion in 235 projects in Brazil, mostly in the electricity (35.7%), manufacturing (23.4%), and information technology (13.2%) sectors.