China Plans $1B Port Investment in Brazil

During a visit by Chinese President Xi Jinping to Brasilia this week, China is expected to announce a $1 billion investment in the port of Sao Luis by state-owned China Communications Construction Company (CCCC). President Xi is in Brazil for the annual BRICS summit, a gathering of the leaders of Brazil, Russia, India, China and South Africa. 

In 2018, CCCC began work on a new greenfield port at Sao Luis, the capital of the state of Maranhão on Brazil's northeastern coast. The four-year-long construction project has a projected cost of about $250 million; two Brazilian partner companies, WPR and Lyon Capital, own a combined 49 percent minority stake in the venture.

The new port's primary objective is to increase the region's capacity for shipping Brazilian soybeans to overseas markets. China is the largest customer for Brazilian soy exports, and it is also Brazil's largest trading partner overall.

The expected announcement marks a change in direction for the Brazilian government. President Jair Bolsonaro campaigned on a nationalist, anti-China platform, questioning Chinese intentions and Beijing's growing economic power in Brazil. He repeatedly warned that "the Chinese are not buying in Brazil, they are buying Brazil.”

However, his rhetoric has changed since the election, and on Thursday his top economic official signaled that Brazil wants to strengthen - not scrutinize - its trade ties with China. 

"We are talking to China about the possibility of creating the free trade area with China as well while talking about joining the OECD," Brazilian Economy Minister Paulo Guedes told Folha de S. Paolo. "I don't care if . . . we balance [trade], increasing exports by 50 percent and imports doubling or even tripling. What we want is even more integration."