BYD investment in Brazil points to China’s wider LatAm plans

By Frank Jacobs - August 16, 2023

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Chinese EV manufacturer BYD is building an industrial complex in Brazil, a country where EV sales are virtually nonexistent. It’s a far-sighted investment in a continent full of potential, an indication of the economic rise of the BRICS – and possibly a sign of the economic decline of the West.?

BYD, the world’s largest manufacturer of EVs, will spend $600 million on a site in Bahia, a state in Brazil’s northwest, where it will build hybrid and full-electric cars, buses and trucks.?

Re-industrialising Brazil

The investment will create more than 5,000 jobs. More importantly, it’s a massive win for Brazil’s president Lula da Silva, who seeks Chinese help to re-industrialize Brazil, and re-organize the global power balance, both economically and politically.?

Both China and Brazil are members of the BRICS, an informal club of non-western economic powerhouses that also includes Russia, India and South Africa (hence the acronym).?

Russia’s invasion of Ukraine, and the Western sanctions on Russia that have followed it, have given a new impetus to the idea of the BRICS as the nucleus of an alternative economic world order – to be clear: an alternative to the ?Western-led economic world order.

Massive growth

Perhaps the Ukraine war merely accelerated what was happening anyway. Between 2000 and 2022, the share of global GDP represented by the G7 (US, UK, Canada, France, Germany, Italy and Japan, plus the EU) fell from 40% to around 30%. Meanwhile, BRICS increased their share from 18% in 2010 to 26% in 2021.?

Both evolutions are due to the massive economic growth of China, which represents 70% of the combined GDP of the BRICS.?

With that in mind, recent Chinese automotive investments in Brazil couldn’t have been more symbolic. They are literally filling the gap left by Western OEMs like Ford and Mercedes-Benz, both of which have exited Brazil in recent years.??Read more here...