Chinese Investment Soars in Brazil; Mainly Related to Oil
October 26th, 2010Via: AFP:
Chinese investment in Brazil is expected to reach 30 billion dollars this year, according to observers — a sum aimed at securing access to the Latin American nation’s oil and other resources.
The inflow has been sudden, and dramatic.
“Up to the end of last year, the amount of Chinese investment in Brazil was tiny, less than 400 million dollars. Over the first half of 2010, it’s gone over 20 billion dollars — and it should hit 30 billion dollars this year,” Charles Tang, head of the Brazil-China Chamber of Commerce and Industry in Sao Paulo, told AFP.
Two-thirds of the total coming into Brazil this year will be invested in the oil sector, to which China has privileged access after extending a 10-billion-dollar credit line to Brazil’s state-owned Petrobras, and after China’s Sinopec bought the Brazilian subsidiary of Spain’s Repsol for seven billion dollars.
“China is investing everywhere in the world to ensure it gets the strategic resources it needs. And Brazil, obviously, is important,” Tang said.
In return, Brazil gets “capital for its growth and job-creation,” he explained.
“China needs the mineral resources, oil and land that Brazil has in abundance,” Tang added before predicting that the relationship between the two BRIC economies “has only just begun.”
In 2009, China became Brazil’s top trading partner, overtaking the United States. Bilateral exchanges topped 36 billion dollars last year.
This year, they will amount to even more, based on Brazilian central bank figures showing trade reached 35 billion dollars in just the first eight months of this year.
