Sino-Brazil Trade & Investment
Where is the Crisis?
Ricardo de Carvalho
Country Leader - Global Chinese Services Group
Partner, M&A Transaction Services
FECOMERCIO - April 23, 2009
China & Brazil World Trade Flow Overview
Trade balance in 2008
Global export rankings
Rank
Country
Global import rankings
US$ billion
Share %
Rank
Country
US$ billion
Share %
1 Germany
1 496
9,8
1 USA
2 112
13,9
2 China
1 429
9,3
2 Germany
1 221
8,0
3 USA
1 291
8,4
3 China
1 069
7,0
4 Japan
750
4,9
4 Japan
711
4,7
5 France
599
3,9
5 France
692
4,5
6 Italy
538
3,5
6 UK
637
4,2
7 Netherlands
533
3,5
7 Italy
544
3,6
8 Russia
469
3,1
8 Netherlands
476
3,1
9 UK
465
3,0
9 Canada
415
2,7
10 Canada
459
3,0
10 Spain
411
2,7
22 Brazil
198
1,3
23 Brazil
173
1,1
World
15 332
100,0
World
15 216
100,0
Source: Deloitte Brasil Research (according to Brazilian Ministry of Development - MDIC).
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Sino - Brazil Trade Development
Where is the Crisis?
China-Brazil Trade Flow ($billion)
Brazil is aiming to
make China its
Trade Flow
China Export to Brazil
China Import from Brazil
Trade Flow Growth%
60
largest trading
40
partner and wants
to triple its China
exports to US$30
20
0
Year 2004
Year 2005
Year 2006
Year 2007
Year 2008
billion in 2010.
This aim has
Year
Trade
Flow
Trade Flow
Growth%
China Export to
Brazil
China Import from
Brazil
nearly been
2004
12.4
55
3.7
8.7
2005
14.8
20
4.8
10
2006
20.3
37
7.4
12.9
2007
29.7
27
11.4
18.3
2008
48.5
63
18.8
29.7
achieved in 2008.
(Source: MOFCOM)
3
©2009 Deloitte LLP. All rights reserved.
Sino - Brazil Trade Balance
Brazilian players in 2008
• Exporters – 1,743 companies to China.
• Importers – 14,357 companies from China.
Brazilian exporters
Brazilian importers
Cia Vale do Rio Doce
Motorola
Petrobras
Nokia do Brasil
MBR, Minerações
Envision
Cargill Agricola
Gerdau
Lois Dreyfus
LG Electronics
Samarco Mineração
Samsung
Caraiba Metais
Dell Computadores
Cia Brasileira de Metalurgia
Cosipa
Bunge Alimentos
Usiminas
ADM do Brasil
Sony Brasil
Nacional Minerios
Semp Toshiba
Bianchini S.A.
Philips da Amazonia
Source: Deloitte Brazil Research (according to Brazilian Ministry of Development - MDIC).
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©2009 Deloitte LLP. All rights reserved.
Sino – Brazil Trade Balance
Chinese players
Main Chinese Importers of Brazilian Prod.
Share %
Baoshan Iron and Steel Co.
11,1
UNIPEC
10,4
Jinan Steel and Iron Co.
4,0
Jiangsu Shagang Inernational Trading
3,8
International Trading of Malanshan
3,7
Dahai Grain na Oil Industry Fangcheng
3,3
China Textiles Grain and Oil
3,1
East Sea Grain OilZhangiagang
3,1
Rui Giang Lian Group
2,9
China National Tobacco
2,6
Others
Total
52,0
100,0
Source: Brasil Comercial
5
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Sino-Brazil Trade
• China ranked 2nd among Brazil's largest trade partners & sources of imports.
2008 China Exports to Brazil – by Category
6
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Sino-Brazil Trade
•China Imports from Brazil – Main Products
7
©2009 Deloitte LLP. All rights reserved.
Investments
Brazilian Investment in China
− The Brazilian Direct Investment Abroad has increased as Brazilian Investment in China from 2001 to
2007. Meanwhile, the Brazilian Investment in China represents just a little fraction of Brazilian Direct
Investment Abroad, and there great opportunities for investments.
− Meanwhile, by the end of 2007, Brazilian investment in China hit US$250 million, most of it going to the
manufacturing, real estate and hydropower industries.
− On July 4, 2008, Brazil launched a China Agenda program aimed at boosting bilateral trade and to
encourage more Chinese investment in Brazil.
− Brazil Trade and Investment Promotion Agency (Apex-Brazil), plans to hold seminars across China to
create the environment for more trade between Brazil and China, especially to promote exports to
China and attract Chinese investors to Brazil.
Brazilian Direct Investment Abroad
US$ Billion
Brazilian Direct Investment in China
0,10
US$ million
114
95
86
104
77
0,08
0,08
79
69
0,04
50
54
55
0,03
0,03
0,03
15
14
15
2001
2002
2003
28
2004
Brazilian Direct Investment in China U$ million)
2001
2002
2003
2004
2005
2006
2007
2005
2006
2007
Ration of Brazilian Direct Investment in China/Abroad (%)
Source: Deloitte Brasil Research (according to Central Bank of Brazil - Bacen).
Source: Deloitte Brasil Research (according to Central Bank of Brazil - Bacen).
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©2009 Deloitte LLP. All rights reserved.
Investments
Chinese Investment in Brazil
− The Chinese Direct Investment Abroad has low participation among developing countries (eg. Brazil),
and the Chinese investment in Brazil in its total abroad investment as lower part as The Brazilian
Investment in China. Both country investments represent less than 1% in their total abroad investments.
− In 2007, China was the 36th largest country investor in Brazil. This indicator shows low participation of
Chinese companies in Brazil that could explained by other factors. Many Chinese investments come
from Hong Kong, Macao and "tax-havens”.
− The prominent sectors which will received by Chinese investments are: oil, gas, mining, ports,
alternative energies, automotive, financial institution, telecommunication, and electronic industry. These
Chinese investment strategy sectors, which the Brazil would be the potential target country.
− Based on Brazil-China Trade Balance information, some potential sectors in Brazil have been identified
for Chinese investments, such as: Metallurgic; Electronics; Logistic; Air and marine ports; Agribusiness;
Oil & Gas, Biofuel, among others.
Chinese Direct Investment Abroad
US$ billion
Chinese Direct Investment in Brazil
US$ Million
18
45
16
40
14
35
12
30
10
25
0,47
0,49
0,52
20
8
15
6
10
4
2
0,06
0,04
0
2001
0
2001
2002
2003
Source: Ministry of Commerce of the People's Republic of China - MOFCOM.
9
0,08
5
2004
2005
2006
2002
2003
2004
Chinese Direct Investment in Brazil U$ million)
2005
2006
2007
2008
Ration of Chinese Direct Investment in Brazil/Abroad (%)
Source: Deloitte Brasil Research (according to Central Bank of Brazil - Bacen).
©2009 Deloitte LLP. All rights reserved.
Investing in China –
Ten Essential Elements for M&A Success
Putting People First
Source: Deloitte Global Chinese Services Group – Ten Elements for M&A Success in China
10
©2009 Deloitte LLP. All rights reserved.
Investing in China –
Ten Essential Elements for M&A Success
Putting People First
11
Source: Deloitte Global Chinese Services Group – Ten Elements for M&A Success in China
©2009 Deloitte LLP. All rights reserved.
Investing in China –
Ten Essential Elements for M&A Success
Putting People First
Source: Deloitte Global Chinese Services Group – Ten Elements for M&A Success in China
12
©2009 Deloitte LLP. All rights reserved.
Investing in China
“When it is obvious that the goals cannot be
reached, don't adjust the goals,
adjust the action steps”
Confucius
13
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