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Economy & Business - August 2021

ECONOMIC HIGHLIGHTS

BRAZIL | Foreign investment. The Conselho Empresarial Brasil China, an independent bilateral institution, published a report on 5 August looking at Chinese investment in Brazil over the last 14 years. The report found that China invested US$66.1bn in 176 different projects in Brazil between 2007 and 2020 – almost half of this in the electricity sector. A further US$44.5bn were pledged to 64 projects which are yet to be executed. Over that period, Brazil was the recipient of 47% of China’s confirmed investments in South America. However, the coronavirus (Covid-19) pandemic has affected these investment flows. While Chinese investments in Brazil surged 117% in 2019 compared with 2018, to US$7.3bn (going against a global trend of falling Chinese investment abroad), they then fell 74% to US$1.9bn in 2020. This was the lowest figure since 2014, while the number of projects which received investment from China fell to eight, down 68% on 2019. This drop in investment reflects a global trend. A report by the United Nations Economic Commission for Latin America and the Caribbean (Eclac), also released on 5 August, found that foreign direct investment (FDI) flows to Brazil fell 35.4% in 2020 compared with 2019. On Brazil’s investment relationship with China, Eclac notes that no acquisitions by big Chinese firms in basic services took place last year, unlike in 2019, but that this “does not imply that [China’s] interest in Brazil has diminished”.

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