The Economist - USA (2022-02-12)

26 The Americas TheEconomistFebruary12th 2022

In that year China invested $13bn in 12 pro­

jects.  The  cebcestimates  that  last  year  it

invested only around $4bn.

This  hints  at  a  wider  trend.  Although

the  presidents  of  Argentina  and  Ecuador

recently  went  to  Beijing  in  order  to  boost

economic  ties  with  China,  economic

agreements  between  China  and  Latin

America have waned in recent years. In an

address to the Community of Latin Ameri­

can and Caribbean States (celac), a region­

al organisation,in 2015, Xi Jinping, China’s

president,  pledged  $250bn  in  investment

in Latin America by 2025. But between 2015

and  2020  Chinese  firms  invested  only

$76bn in the region, according to research­

ers  at  Boston  University.  In  December,  at

another meeting with celac, Mr Xi did not

pledge any further investment. (Brazil did

not attend, as Mr Bolsonaro had pulled out

of celacin 2020.) 

Brazil,  in  particular,  makes  foreign  in­

vestment  hard.  The  country’s  rules  and

regulations  are  prodigious  and  ever­

changing. Its currency, the real, is volatile;

its labour laws are complicated and its tax

system  badly  needs  reform.  Corruption

and  uncertainty  over  economic  policy  do

not  help.  “If  a  Chinese  company  can  sur­

vive in Brazil, it can do so anywhere,” says

Qu  Yuhui,  a  Chinese  diplomat  who  was

based in Brazil until recently. 

Chinese  investors  focus  on  what  they

perceive  as  safe  bets.  Nearly  half  of  the

money  they  put  into  Brazil  before  2020

went into electricity generation, which has

the benefit of long­term contracts. Several

Chinese  power  firms  have  established

themselves  in  the  country.  Brazil benefits

from  Chinese  expertise:  both  countries

have ultra­high­voltage transmission lines

that stretch thousands of kilometres.  

The power industry, though, also gener­

ates  challenges.  Last  year  the  ceoof  State

Grid Brazil, a subsidiary of one of the big­

gest Chinese state­owned electricity firms,

described  the  difficulty  of  acquiring  land

for  a  huge  transmission  line  between  the

Belo Monte dam in Pará, in the north, and

the consumers of south­eastern Brazil. The

effort  involved  negotiating  individually

with  “3,337  property  owners”  and  obtain­

ing “204 inter­regional licences, including

[for]  rivers,  lines,  highways,  railways,  oil

ducts, small airports, etc”.

Brazil  ought  to  be  doing  more  to  lure

foreign  investment,  yet  its  efforts  tend  to

be sporadic, driven more by state­level pol­

iticians  than  by  the  federal  government.

The state of São Paulo, for example, set up a

trade office in Shanghai in 2019. João Doria,

the  governor  of  São  Paulo,  credits  it  with

helping him strike a deal with Sinovac for

covid  vaccines.  But  few  Brazilian  compa­

nies  have  set  up  offices  in  China,  or  even

ventured to visit, says Tatiana Lacerda Pra­

zeres,  a  trade  consultant  in  China,  and  a

former  foreign­trade  secretary  of  Brazil.

“There  is  a  perception  among  some  top

Brazilian  officials,  and  even  some  busi­

nesses,  that  China  is  more  dependent  on

Brazil than vice versa,” she says. 

China’s  large  appetite  for  Brazilian

commodities  reinforces  that  attitude.  But

the  view  from  China  is  quite  different.

Compared with other regions, Latin Amer­

ica has always been China’s “lowest priori­

ty”,intermsofdiplomacyandinvestment,

saysMargaretMyersoftheInter­American

Dialogue, an American think­tank. Asia

andAfricaremainmoreimportant.

Moreover, China’s appetites may be

changing.Itsdrivetowards“basicself­suf­

ficiency”ingrain,aslaidoutinitslatest

five­year­plan,includesanefforttoboost

soyabean production. Scepticism about

theplanabounds. Butevena smallde­

creaseinChinesepurchaseswouldhurt

Brazil,whichsends70%ofitssoyabeanex­

portstoChina.Ifdemandfornewhousing

inChinesecitieswereto drop,assome

predict,thatwoulddiminishdemandfor

Brazilianironoreandotherrawmaterials.

(Thougha slowdown inconstructionat

homemightalsopushChineseinfrastruc­

ture firms to seek opportunities abroad.)

Brazil’s presidential election in October

will help determine the future of the rela­

tionship. Lula is mulling a run. He tops Mr

Bolsonaro by a wide margin in most polls.

If he were to become president again, there

is  little  doubt  that  he  would  try  tomend

ties.  Wooing  Chinese  investors,  though,

may be harder the second time around.n

Intermittent interest

Flow of Chinese investment to Brazil, $bn

Source: China-Brazil Business Council *Estimate

2

15

12

9

6

3

0

20181614122010 21*

Mexico

A deadly profession

I

t was lunchtimeon January 31st when

Roberto Toledo, a 55­year­old video jour­

nalist,  opened  the  door.  He  was  shot  and

later died of his wounds. He was the fourth

member  of  the  press  to  be  murdered  in

Mexico in just one month. 

Mexico has long been a deadly place for

journalists.  Reporters  Without  Borders,  a

watchdog, reckons 47 have been killed over

the past five years, the same number as in

Afghanistan. More reporters are missing—

presumed  kidnapped—in  Mexico  than

anywhere  else  in  the  world.  Even  so,  the

events of recent weeks have shocked many.

The  increase  in  killings  is  partly  be­

cause of an overall rise in violence, reckons

Jan­Albert  Hootsen  of  the  Committee  to

Protect Journalists, an advocacy group. Ov­

er  the  past  five  years  more  than  30,000

people have been murdered annually, a fig­

MEXICO CITY

Four journalists have been killed in the space of a month