Brazil: Investment Treasure With Huge Market Potential

When Chinese enterprises have been fed up with the trade barriers set up by the European and American powers, is there any need for them to squeeze into the European and American markets?

In fact, at the end of the horizon, a country is gradually showing its huge market potential. This is Brazil, an investment treasure that is not too bright.

In fact, it is not just Brazil. In recent years, the whole Latin American economy has seen a thriving trend. With the recovery of state-owned enterprises and the increasingly stable politics, it is becoming the most active economic development sector in Asia besides Asia.

But how to occupy the market most efficiently?

As in China weiqi, if we want to seize the strategic position, we must be the first economic power in Latin America, Brazil.

China has always been proud of the world with its annual GDP rising by about 11%. However, the glory is not unique to China. Brazil's GDP index is growing at almost the same speed.

Behind the data, the strong momentum of Brazil's domestic economy is clear.

This has also attracted the attention of international investors. In recent years, investors from Spain, Australia, Japan and other countries have increased their investment in Brazil and enjoyed great returns. Among them, Spain has jumped to the top of Europe's investment quota in Brazil a few years ago, while some Japanese enterprises have set up factories in Brazil to earn their money in the light of the characteristics of Brazil's exports of resource products. How should China treat this new investment treasure?

Since 2000, according to the statistics of the Ministry of Commerce, the trade between China and Pakistan has increased by more than 30% per year. In the first 8 months of 2007, it reached about 14000000000 dollars, almost the sum of last year's total.

On the face of it, this is a cheering "report card". But if we study it more carefully, we will find that the major share in China Pakistan trade is large state-owned enterprises such as Baosteel, or "internationalization" experience like Lenovo and BenQ is more mature than that of pnational giants.

As a more flexible private enterprise, the "gold rush" in Brazil is somewhat different from the "gold rush". This is a pity, but the original exciting report card also seems to be lacking in some persuasiveness.

Therefore, it is time for the owners of private enterprises to consider the Brazil market carefully. After all, if they voluntarily give up a market with unlimited potential, it will provide an opportunity for their competitors to grow and expand.

365 lines, row and row, "gold rush", Brazil's abundant mineral resources, good economic trend and the government's tolerant attitude towards foreign investment, so that almost all industries in Brazil are glamorous. This country that looks like "treasure bowl" is truly showing the characteristics of the "treasure bowl". The 365 lines can be panned out. If we must choose the best, we can find the most profitable industry in Brazil.

Brazil has a vast territory and is the sixth largest country in the world, and it has more natural conditions. The land of the whole country is almost entirely arable land. In addition, Brazil has mild climate and huge domestic output. In the planting industry, the output of soybeans, rice, sugarcane and wheat is very rich. Among them, only one soybean product exports more than US $3 billion a year. In terms of animal husbandry, almost all parts of Brazil are covered with pastures, and the number of cattle and pig breeding and meat output ranks two or three in the world.

Agricultural production in Brazil is one of the most important industries in China. It accounts for about 35% of GDP in Brazil and accounts for more than 42% of Brazil's external exports, about 40 billion dollars a year.

Moreover, according to the analysis of the FAO and OECD, by 2014, meat production in Brazil will account for 33% of the world's total output and become the first meat exporter in the world. In the next 10 years, the output of Brazil's agricultural products will also increase by 44%.

Such data give investors more confidence. In their eyes, the agricultural product market is the preferred target of investing in Brazil. Now, with the growth of agricultural products prices all over the world, Brazil's agricultural products rely on strong output capacity, and the prices of meat and plantation products are still cheaper. This further attracts investors from all over the world to come to Brazil to seek cooperation opportunities.

However, there must be friction in cooperation. When we see that Brazil's agricultural products market has strong market competitiveness, some potential risk factors can not be ignored.

1, policy factors must be closely watched. Because Brazil has strong bargaining power in the international agricultural products market, it will inevitably lead to some "arrogance" in its dialogue with other countries. In the past few years, there have been serious differences between China and Brazil on the import of soybeans, and Brazil has almost completely cut off the export of soybeans to China, causing the risk of many Chinese importers being almost cut off.

Such a situation reminds Chinese enterprises that it is compulsory to cooperate with Brazil and pay attention to the policy trend of the two countries.

2, Brazil's unique domestic mode. In recent years, nearly 75% of Brazil's domestic exports of agricultural products are monopolized by several large enterprises, and in the rural areas and small towns of Brazil, there are all kinds of agricultural industry associations. They are in charge of the production and supply and sale of Brazil's agriculture, which will also make investors in a passive position in the dialogue with Brazil's producers of agricultural products.

Brazil textile industry is one of the most developed countries in South America. Its better investment environment and abundant resources have long been the target of Chinese textile enterprises sweeping across the world.

China's textile enterprises also have unique advantages when they enter Brazil.

Brazil is not a large number of countries that give China a market economy status. Such a move has, to a certain extent, cleared many obstacles for Chinese enterprises to invest in Brazil.

Besides, the development of agriculture in Brazil is very outstanding. The quality of domestic cotton is good, and the supply is adequate. However, it lacks competitiveness in chemical fiber products, and the chemical fiber industry in China has great advantages. Therefore, whether it is preparing export products to Brazil or investing in factories in Brazil, it has strong operability.

The most likely joy of accidents is that Brazil has a strong radiation capability and can use Brazil as a springboard to easily radiate products throughout Latin America.

At the same time, China's enterprises invest in Brazil can avoid European countries' trade barriers to China's products, "curve export" to European countries and regions.

The mineral resources in Brazil before 1974 were very scarce. Due to many factors such as technology and other factors, Brazil's huge domestic energy and mineral reserves were not effectively exploited and utilized. But since then, the Brazil government has started a series of mineral development plans, and a series of minerals such as iron and steel, Nonferrous Metals and energy have been seen again. Brazil has also jumped to become one of the world's largest exporters of mineral resources.

Mineral resources are the propellant for the long term development of the world economy and the commodities of the market. Brazil's great variety of mineral resources, which are amazing in output capacity, have attracted numerous international buyers, including Chinese enterprises.

China Baosteel, Minmetals Group and China Aluminum Group have signed iron ore and bauxite mining and alumina processing projects with investment of more than US $1 billion respectively with enterprises in Brazil.

Shanghai Baosteel Group Corporation, China's largest steel company, imports nearly 20 million tons of iron ore annually, most of which comes from Brazil's famous vale company, the world's largest iron ore producer.

Baosteel also joined a partnership with vale to set up a mineral company to ensure trade protection for iron ore supply.

The long-term trade and cooperation between Chinese enterprises and Brazil in the mining industry has laid a solid foundation for further deepening cooperation in the future. China Minmetals and Baosteel set up branches in Brazil for many years, accumulated experience in the cooperation with Brazil, and established stable market customers and collaborators.

At the same time, in recent years, the Brazil government has constantly revised the mining law to adjust the legal relationship between economic activities related to mineral resources exploration and development, constantly revised the foreign investment law, and formulated laws and regulations and preferential policies which are conducive to the entry of foreign capital into their own countries, thereby reducing the administrative intervention of the government and providing valuable investment opportunities for SMEs.

In 2005, during the visit of a trade minister in Brazil, the footwear industry once asked the Chinese government to reduce the export quota of Chinese shoes to Brazil, so as to avoid the situation that Brazil's domestic footwear industry was more bankrupt and bankrupt.

There is some "tolerance" in this regard, but in fact, the shoe industry in Brazil is actually caught in the "front blocking" of Asian shoes mainly made of Chinese shoes.

Shoemaking industry is an important export industry in Brazil, but in recent years, after the strong attack of Chinese shoes, Brazil's domestic shoe industry has fallen into a state of retreat.

In the 1~8 months of this year, Brazil imported 14 million 500 thousand pairs of shoes from China, accounting for 83.3% of the total imports of Brazil shoes in the same period, and the amount of shoes imported from China amounted to 89 million 800 thousand dollars, accounting for 68.5% of the total imports of Brazil shoes.

In the same period, Brazil exported 119 million pairs of shoes, 2.58% less than the same period last year, 17 million 400 thousand pairs of imported shoes, an increase of 43% compared with the same period last year, and the import value of 131 million US dollars, up 49.6% over the same period last year.

The data directly show the strong competitiveness of China's footwear industry in the face of Brazil counterparts. On the one hand, this shows that Chinese shoes have a broad market in Brazil, which is worth trying to enter. But on the other hand, China's shoe enterprises also need to alarm the alarm.

The strength of Chinese shoes has already caused panic among Brazil shoe enterprises. Recently, the Brazil Footwear Association appealed to Latin American counterparts to form a united front and move forward together in the struggle against Chinese shoes.

The Brazil government's action is faster. In September 28th of this year, the Brazil government announced that it would increase import tariffs on clothing, footwear and other products. The tariff on footwear would be raised from 20% to 35%.

The main purpose of the decision is to help domestic industries resist competition from China, he said.

Even facing the "iron walls" of competitors, Chinese shoes can easily find a breakthrough, which makes us feel proud. But the question is, can we continue to "go all the way" when strong "market forces" encounter restrictions imposed by administrative means?

Chinese shoe companies ready to enter the Brazil market need to think deeply and make preparations.

What is the ultimate way to make money for infrastructure in commercial battlefields?

It is an accurate grasp of future business opportunities.

In the 90s of last century, China's economic development made a number of pioneering international investors. Their success was due to their accurate anticipation of the healthy development of China's economy in the future.

Now, almost the same situation is replicated in Brazil, in a country where the economy is in a recovery period, and the demand for domestic consumption and the quality of life is increasing, and overseas investors want to get a better investment environment.

Huge market demand has led many investors to focus their attention on infrastructure construction in Brazil. Facts have proved that this is a good choice.

For our enterprises, it is also a historic opportunity.

Brazil's huge infrastructure needs provide a vast space for our powerful enterprises to invest in Brazil.

Moreover, investing in Brazil's infrastructure, especially investing in Brazil iron ore's direct access to the Pacific port's railway system and building related ports, will reduce the distance from Brazil to Asia by several thousand miles, ensuring the convenience of Importing Ore from Brazil and reducing the overall pport cost.

At present, China's enterprises have signed a memorandum of investment with Brazil's relevant parties for a total of 5 billion US dollars for Brazil's port and railway system construction projects.

However, some of the problems that have recently surfaced have made it possible for enterprises that intend to invest in infrastructure in Brazil to see the risk approaching.

The World Bank recently published research report that the risk of infrastructure investment in Brazil is two times higher than that in Chile and Mexico.

The main reason for the risk is that