Chinese and other foreign investments in the Brazilian soybean complex

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A truck is loaded with soybeans near Rondonópolis (Photo: Lalo de Almeida for The New York Times)
PLAAS | May 2015

Chinese and other foreign investments in the Brazilian soybean complex

by Gustavo de LT Oliveira

The economic and political emergence of China and Brazil is arguably the most important process currently transforming the global food and agricultural regime, with vast yet unclear economic, ecological, and geopolitical repercussions for the 21st century. As Brazil and China become the world’s leading exporter and importer of soybeans respectively, their governments and agribusinesses have launched partnerships to wrest greater control over the flows and profits of the international soybean trade from North Atlantic-based transnational companies. While some promote these developments as “South-South cooperation” (Zou et al 2010; H. Oliveira 2010), many others condemn them as neocolonial “land grabs” that displace peasants, cause environmental degradation, and deindustrialize the Brazilian economy (Grain 2008; Jenkins and Barbosa 2012).

Once Chinese companies began expressing interests in making investments in Brazil, nationalist sentiments and domestic agribusiness interests prompted the Brazilian government to tighten restrictions on foreign investments in farmland since 2010 (Perrone 2013), but paradoxically the number of Brazil-China agroindustrial partnerships actually increased and Chinese agroindustrial FDI in Brazil has intensified since 2010 (CEBC 2012, 2013). Neither “global land grab” nor “South-South cooperation” discourses do justice to the complexity we witness since Chinese investments in the Brazilian soybean agribusiness have begun taking shape in recent years. Some Chinese agribusinesses have successfully invested in soybean production and processing in Brazil, while others have been redirected from similar projects to port and logistics infrastructure. Whether Chinese investors are welcomed into soybean production or redirected towards logistics, what is particularly striking is the manner in which these partnerships produce a new form of agribusiness globalization that does not proceed from de-regulation and undermining state sovereignty in the global South (Morgan 2000; Patel 2013), but through its very opposite: deepening regulation and state support for expanding investments that aim to challenge the hegemony of global North actors while contributing to, rather than disrupting, the process of capitalist accumulation, state formation, and the reproduction of a transnational agroindustrial elite in the global South. This radical transformation remains to be investigated.

There is very limited academic research that disaggregates homogeneities of Chinese investments abroad and situates them in relation to investments from the “old hubs” of global capital in the US, Europe and Japan (Armony and Strauss 2012; Smaller et al 2012). Recent studies on foreign investments in Brazilian agribusinesses reveal that Chinese companies still lag far behind investors from the “old hubs” of global capital (Wilkinson et al 2012), so the attention Chinese negotiations have received in Brazilian and international media (e.g. Barrionuevo 2011; Powell 2011; Decimo 2011) appears disproportionate. Moreover, there is evidence that the differences between Chinese and other foreign investors are far less significant than has been presumed (Goetz 2012; Hofman and Ho 2012). This Working Paper identifies current Chinese investments in Brazilian soybean agribusiness and related port, storage, and transportation infrastructure, and situates them in the context of all foreign investments in Brazilian soybean agribusiness and related infrastructure. Thereby it aims to reveal whether and how Chinese investments in Brazilian soybean agribusiness and related infrastructure differ from investments from the “old hubs” of global capital.

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