From energy and logistics to consumer goods and tech, Chinese firms expand their footprint as economic and geopolitical ties deepen
08/04/2025
In the first half of 2025 alone, Brazil received $379 million in direct Chinese investment for equity stakes in local businesses, exceeding the country’s annual totals since 2018, according to Brazil’s central bank. These figures reflect capital inflows for the acquisition or expansion of company equity, excluding reinvested profits.
China ranked tenth among Brazil’s top sources of equity investment in the period—its highest position since the official records began in 2001. The U.S. led the ranking, but countries commonly used as Chinese investment vehicles, such as the Netherlands, Luxembourg, Panama, and the British Virgin Islands, also appeared ahead.
“Official numbers often understate the true volume of Chinese activity because the money rarely comes directly from China,” said Stephen O’Sullivan, a corporate and M&A lawyer at law firm Mattos Filho. “For instance, we worked on a transaction with a Chinese group, but the direct shareholder was based in the Netherlands.”
Mattos Filho recently advised a Chinese cement company in the acquisition of one of Brazil’s largest quarries and assisted the Chinese winner of a government oil auction in June. “We’ve never invested so heavily in the Chinese market, including visits to the country,” said Giovani Loss, a partner in the firm’s infrastructure and energy practice. “We see growing activity and are positioning ourselves to meet the demand.”
Infrastructure, logistics, and consumer markets attract Chinese capital
Chinese firms are now active across a broad range of sectors. Train manufacturer CRRC, for instance, plans to open a factory in Araraquara, São Paulo state, to fulfill contracts recently awarded by Brazilian public transport authorities. It signed a deal with São Paulo’s metro system to deliver 44 trains and, in partnership with the Comporte group, has secured public-private partnership (PPP) contracts in São Paulo and Minas Gerais.
Another major player is China Communications Construction Company (CCCC), seen as a likely bidder for the Santos-Guarujá tunnel auction scheduled for September. Sources say the group may participate through its Portuguese affiliate Mota Engil. Meanwhile, federal officials report that Chinese firms have expressed interest in railway concessions and port infrastructure, including the massive Tecon 10 terminal in Santos. One potential bidder is China Merchants Group.
Other ongoing Chinese investments include power transmission lines by State Grid—which secured a R$18 billion contract in late 2023—and a grain terminal at the port of Santos being developed by Chinese commodities trader Cofco.
A report published in July by the American Enterprise Institute (AEI) identified Brazil and Indonesia as the top destinations for Chinese investment in the first half of 2025. Derek Scissors, the report’s author, noted that Brazil has become a prime target for Chinese capital over the past two years.
Post-pandemic normalization and shifting investment patterns
“The pandemic disrupted Chinese investments globally. Even after China’s reopening in late 2022, 2023 remained uncertain. We consider 2024 a year of normalization,” said Fabiana D’Atri, an economist at Bradesco Asset Management (Bram) and director of economics at the Brazil-China Business Council (CEBC).
While the CEBC’s latest investment survey, covering data through 2023, hasn’t yet shown a surge in Chinese interest, Ms. D’Atri noted clear signs of growth based on press coverage, internal monitoring, and firsthand experience serving Chinese clients. According to Mr. Scissors, Brazil is the most attractive investment target among countries outside the wealthy world. While early investments focused on commodities like offshore energy, iron ore, and soybeans, recent trends show a large-scale shift toward energy infrastructure.
Now, Chinese firms are also targeting Brazil’s emerging middle class and its consumer markets. “Chinese companies are increasingly eyeing Brazilian consumers. Look at Shein, the flood of low-cost fashion, electric vehicles, televisions, air conditioners,” said O’Sullivan.
Ms. D’Atri noted that service-oriented sectors, less dependent on regulation, are drawing new investors. Meituan, a Chinese food delivery giant, has announced plans to enter the Brazilian market, and 99—owned by China’s Didi—is launching its delivery service in São Paulo. “While these investments may not be as large in volume as energy or infrastructure projects, they are more diffuse and demand complementary services,” she said.
The growing interest was also evident following President Lula’s May visit to China. Mixue, the world’s largest Chinese beverage chain, announced its intention to launch operations in Brazil. “This appears to mark a new wave of Chinese presence, expanding beyond energy and raw materials,” said Ms. D’Atri.
Brazil seen as reliable, but challenges remain
Ms. D’Atri highlighted that Brazil is not only a large consumer market but a “reliable partner” for China, thanks to strong bilateral trade. China has been Brazil’s top trading partner for over a decade. According to the federal export agency ApexBrasil, China accounted for 28% of Brazil’s exports in 2024. Between 2015 and 2025, China launched 163 greenfield investments in Brazil—projects built from scratch.
“The trade relationship supports and informs the investment relationship. Chinese investors now arrive with a much more detailed understanding of the Brazilian market,” said Ms. D’Atri. Bram recently launched two China-focused ETFs on Brazil’s stock exchange, and Ms. D’Atri expects that Chinese investors will soon be able to access Brazilian equities directly. “The complexity of the relationship is increasing,” she added.
Still, that sophistication comes with a dose of caution. Exchange rate volatility and high interest rates make Chinese investors more risk-averse compared to their experience at home, she said. “Brazil offers growth and opportunity, but financing operations here remains uncertain.”
Chinese investors are also calling for more infrastructure concessions and auctions. “This is one of Brazil’s homework items: building a larger project pipeline,” said Ms. D’Atri. The Shandong Hi-Speed Group is reportedly evaluating transportation initiatives, but São Paulo investment secretary Rafael Benini noted that such investments require time and adaptation. “Understanding Brazil’s rules—like environmental licensing and expropriation laws—is one of the biggest challenges. Taxation is also perceived as complex,” he said.
Mr. Benini still sees strong potential but acknowledges Chinese firms often take longer to make decisions. Some projects, such as the metro Line 6-Orange and the West-East Integration Railway (FIOL), ultimately moved forward without Chinese participation, contributing to a perception that Chinese investment signals are not always reliable.
Ms. D’Atri emphasized that investment decisions still rely heavily on Beijing’s guidance. “When the Chinese government promotes internationalization, the flow intensifies. Brazil’s voice is growing, but the money ultimately follows Beijing’s lead.”
Strategic alignment in a shifting geopolitical landscape
At present, both China and Brazil are well-positioned to strengthen their economic ties. Beyond trade and consumer appeal, Brazil holds the world’s second-largest reserves of rare earth elements—vital for green technology and clean energy. These resources have caught the attention of both China and the United States in recent trade negotiations.
Some experts believe Brazil could become a platform for Chinese firms to access restricted markets like the EU. “Chinese policy encourages companies to go global—but there aren’t many welcoming markets left,” said O’Sullivan. “Unlike the U.S., Germany, or Australia, Brazil is opening its doors. We need these investments.”
Rising tensions with the U.S. are also drawing Brazil and China closer, he argued. “As the U.S. becomes more hostile, China is looking to friendlier partners—and Brazil fits the bill. Once a few Chinese firms are established, others follow to support them. A full business ecosystem begins to form.”
Mr. Trump’s letter to Lula announcing a 50% tariff on Brazilian imports did not directly mention China, but analysts believe Brazil’s growing ties with Beijing were likely a factor. “Brazil’s engagement with China goes beyond economics,” said Deutsche Bank strategist Drausio Giacomelli and macro analyst Carlos Munoz-Carcamo. “Lula hosted this year’s BRICS summit and signaled possible entry into the Belt and Road Initiative.”
They also highlighted a recently formalized transcontinental railway linking the Atlantic and Pacific, backed by both nations.
Still, Mr. Scissors dismissed a causal link between the tariffs and China-Brazil relations. “It’s political arrogance, nothing more. Brazil and China are not interchangeable with the U.S. Any closer ties are politically understandable but economically irrelevant,” he said.
*By Anaïs Fernandes and Taís Hirata — São Paulo
Surce: Valor International