Brazil and China can’t seem to agree on what either country is getting out of their economic ties. Take this most recent example: China Construction Bank, a huge state-owned lender, just sunk around $716 million into a 72 percent stake in Brazil’s Banco Industrial e Comercial, a nearly 19 percent premium on BicBanco’s current share price. Some might argue that the move positions CCB to profit from Chinese investment in Brazil. But to hear the head of another Chinese bank tell it, that might be a naive move.
Brazilians, however, generally hold a different view. Local businesses complain that Chinese companies drag their feet on deals and are excruciatingly patient negotiators, reports Reuters—or simply never round up the funding. Many of the projects China has made good on involve Brazil’s coveted commodities. Starting in 2010, big state-owned enterprises (SOEs) like Sinopec and Sinochem have amassed plum natural resource projects.
Some of the outrage probably stems from the fact that Chinese investment hasn’t resulted in deeper trade ties that boost Brazilian manufacturing, as Brazilians had hoped.
Despite the bellyaching on both sides, Chinese investment in Brazil looks set to continue. China’s state-owned enterprise may be losing interest, but nimbler private Chinese companies are still seizing opportunities. Search engine Baidu recently launched in Brazil, months after Lenovo bought a Brazilian electronics company for $146.5 million. And more Chinese car brands sell in Brazil than do American or Japanese brands.