Media Highlights

Tango in the Dark

5 July 2011

As far as deals go, this one was high voltage. In December last year, the State Grid Corporation of China paid US$1.8 billion for 3,200 kilometres of power transmission lines in Brazil. It was a big step for the largest electricity utility company in the world and a big deal for the many lawyers involved.

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One feature that has not changed much, however, is the direction of trade and investment. As a general rule, Chinese investors buy raw materials and assets in the continent while Latin America generally purchases finished goods from China. Few Latin American companies invest in China, or even sell their products in the Chinese market.

“We definitely do not have the same amount of investment from Brazil to China as the other way around,” according to Martim Machado and Roberto Vianna do R Barros, partners at Campos Mello Advogados.

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Since 2000, bilateral trade between China and Brazil has multiplied 20 times to hit US$56.2 billion in 2010. Brazil enjoyed a trade surplus of about US$5 billion last year, say Martim Machado and Roberto Vianna do R Barros, partners at
Campos Mello Advogados. China is now Brazil’s largest commercial partner and its largest foreign investor.

In April last year, Brazil and China signed a joint action plan to cover the period between 2010 to 2014.

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Original: Tango in the Dark (PDF)

Source: China Business Law Journal