Chinese enterprises positive about investment in BRICS countries

[InKunming--China]  Chinese enterprises have positive expectations over investment in BRICS countries.

"Investment in Brazil will reach 70% of our company's overall overseas investment, after the completion of the acquisition," Ge Junjie, chairman of Hunan Dakang Pasture Farming, said in Shanghai on Saturday at a seminar on overseas investment.

Ge, whose company is based in central Hunan Province, said that this June the company's strategic investor, Shanghai Pengxin Group, and its wholly-owned subsidiary abroad DKBA, had acquired a 53.99% stake in Belagricola, a company specializing in agricultural equipment sales in Brazil.

In 2016, the group bought a 57% stake in Fiagril, a Brazilian trading company.

Like Ge’s company, more Chinese companies are seeking investment opportunities in the BRICS countries.

Huang Qingfeng, president of Shanghai Zhenhua Heavy Industries, said that the company started investment in Brazil, India, Russia and South Africa in 1996, 2005, 2006 and 2008 respectively, seeking cooperation partners.

The company is now negotiating a fully-automated wharf project with Indian customers.

Earlier this year, Beijing Gas Group bought a 20% stake in a Rosneft subsidiary.

Chinese companies are now investing in more countries and diversified industries, according to Cline Zhang, branch manager of Citibank (China) Shanghai Branch.

Zhang said that Chinese companies are behaving in a more robust fashion, focusing on sustainable development and risk aversion.

The potential that BRICS members will expand investment to each other is large. Overall foreign investment by BRICS has reached 200 billion US dollars, accounting for 12% of total global investment, yet bilateral and mutual investment among BRICS accounted for only 6% of their overall investment.

According to Huang Qingfeng, a stable domestic economic policy is a major prerequisite to attract overseas investment.

Meanwhile, BRICS countries can improve their standard of service and guarantee for overseas investors.

"Using the Renminbi as a settlement currency, as well as providing more convenient tax and visa facilities, can prompt more Chinese companies to invest in BRICS," Huang said. "More financial and consulting services are needed to help lower risks."

hina Economic Information Service and PricewaterhouseCoopers China published a BRICS Investment Environment Report on Saturday, which provides information on macro-economics, the investment environment and the latest investment policies.

In future, the upgrading of domestic demand will be the main factor driving Chinese companies to invest in BRICS, according to industry insiders.

Ge Junjie said that the future integrated operation of Belagricola and Fiagril would enhance his company's global competitiveness and lower the risks of overseas operation.

"Agricultural products from Brazil, such as sugar, coffee and fruit juice are expected to enter Chinese market with better quality and lower prices in the future," Ge said.

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