China’s equipment and manufacturing industry opened a two-day exhibition in Rio de Janeiro on May 20 during Premier Li Keqiang’s visit, highlighting the potential for Chinese manufacturers in Latin America’s largest economy.
About 30 leading Chinese companies are taking part, including manufacturers of communications equipment and information technologies, petroleum and petrochemical equipment, engineering machinery equipment and automobiles.
National Development and Reform Commission official Gu Dawei said on May 20, “China will strengthen cooperation with Latin American countries in the equipment and manufacturing industry — an expansion from the traditional areas such as energy, mining, agriculture and infrastructure.”
The government will provide more financial support for companies to go global and increase cooperation on industrial capacity, such as providing concessional loans and encouraging the issuance of offshore RMB bonds.
China has also set up an investment company under the China Investment Corp to handle direct overseas equity investments, said Gu, head of the commission’s Department of Foreign Capital and Overseas Investment.
Operations have started and the company will manage a fund on a “relatively large scale”, which is likely to surpass the $40 billion Silk Road Fund, he said.
China’s railway locomotive and rolling stock products have attracted considerable attention at the Rio exhibition. The country’s leading trainmakers, China CNR Corp and CSR Corp, both see Latin America as a fast-growing market.
The Changchun Railway Vehicles factory, a subsidy of CNR, has won a contract to supply subway trains to Brazil for the Olympic Games in Rio next year. The trains will be equipped with the latest air conditioning units, allowing them to operate in temperatures as high as 56 C.
Deliveries are scheduled to be completed this year, and the first trains have completed testing and been sent to Rio.
The company said the trains will operate shuttle services at speeds of up to 100 kilometers per hour on a line between the Olympic Village and the Copacabana Games center. CNR also delivered subway trains used during the World Cup soccer tournament in Brazil last year.
CSR has exported diesel locomotives and freight trains to Brazil and other South American countries, including Colombia, Argentina and Venezuela. CNR and CSR are still under a merger process that is expected to create the world’s biggest trainmaker by sales.
Meanwhile, Chery Automobile’s factory in Brazil will start operating by the end of this year, and new-energy buses produced by China’s BYD Co have also entered the market, according to Xinhua News Agency.
BYD will open its first factory in Brazil this year. It will produce batteries and solar panels and assemble electric buses with imported parts.
Zhou Mi, a researcher at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, said companies have raced ahead in exploring the Latin American market.
It has become increasingly important that China do more to reach intergovernmental agreements on setting up systems to realize investment and to provide more information to companies, he said.
These systems could help Chinese companies to lower investment risks, and companies would be more willing to set long-term goals and take greater responsibility, such as making projects more environmentally friendly, Zhou said.
China has signed free trade agreements with Peru and Chile. A feasibility study is being conducted on a free trade agreement between China and Colombia.
Wanyan Wenhao contributed to this story.