Brazil focuses its attention on Chinese forum
Folha de S. Paulo 16/09/10
The largest destination of Chinese investments and its main trading partner in Latin America, Brazil ended up in the spotlight of the open forum yesterday in Beijing to discuss business opportunities between the Asian giant and the region. Chinese purchases in the region jumped from US$ 5 billion in 2000 to US$ 58 billion (nearly R$ 99 billion) last year. In panels that discussed issues such as exploration of natural resources, the commodities trading and investments in Latin America, Brazil was the main "case study".One of the consensus of the meeting is that while China's presence is more visible than ever in Latin America, it is still highly concentrated in purchase and in commodity projects. "More than a half of the investments in Latin America goes to Brazil", said Gerardo Mato, from HSBC. "But almost all the investment in Latin America is the sum of only three or four undertakings".
Zhang Liping, chairman of Credit Suisse in China, took a similar line when he spoke of Chinese acquisitions in Latin America, which registered a record of US$ 10 billion this year. He recalled that the volume was limited in the buying of half of the Argentine oil company Bridas (US$ 3.1 billion), 40% of the oil field Peregrino in the Campos Basin (US$ 3.07 billion) and power utilities throughout Brazil (US. $ 1.73 billion). In the case of acquisitions in Brazil, there was the exception that the transactions are not the country, since the sale of Peregrino was made by the Norway Statoil and the dealerships were in control of Spanish companies.
But the predominant tone of optimism for the future, and phrases like "huge potential" and "tremendous opportunities" were heard repeatedly throughout the day. Signs of more investment, especially in Brazil, were mentioned. A survey of Rodrigo Maciel, from Strategus consultancy, shows that 150 Chinese companies interested in investing in the country, in sectors as diverse as equipment for the oil industry, automakers, steel and wind turbine.
Maciel, who did the survey by LLX order, one of the companies of Eike Batista, says at least 20% of these companies have set up representation in the country. "It's much easier to sell Brazil today", says the consultant, since 2001 working in China. One of the problems pointed out to explain the incipient presence of China is the lack of mechanisms, according to Chang Yunbo, CEO of CCCC, one of the largest Chinese construction companies. The number of participants of the 2nd China Latin America Investor Forum (LA-CIF), which ends today, has reached nearly 500 people who paid up to US$ 4,000 to enroll themselves. Among the sponsors of the event were the Inter-American Development Bank (IDB), Credit Suisse, HSBC, BNP Paribas and BTG Pactual.