NEW YORK : Securities firm China International Capital Corp (CICC) has identified potential opportunities in Brazil for cross-border deals and is considering opening an office in the country, according to Lindsay Lin, Head of Americas for CICC. She made the statement during an interview at the Reuters NEXT conference in New York.
China is Brazil’s largest trading partner, however Chinese investments in Brazil dropped by 78 per cent in 2022, according to the Brazil-China Business Council (CEBC). Lin believes that more Chinese capital will be invested in Latin America, particularly Brazil, and CICC may choose to open an office in the country.
CICC’s New York office, opened in 2007, provides services for corporate finance and equities, as well as research. Clients are particularly interested in insights on China’s economy, which CICC forecasts will grow by 5.3 per cent in 2023. The International Monetary Fund, however, has estimated that China’s GDP will remain at 4.6 per cent in 2024.
Troubles in China’s highly indebted property sector, such as Country Garden and China Evergrande, have raised fears of a financial crisis. Lin commented that investors should never believe a company is too big to fail, but the risk is under control as the Chinese government is monitoring the situation.
The value of global announced M&A deals in the first three quarters of 2023 was 27 per cent lower than the previous year, according to LSEG. Deals involving a U.S. acquirer and a Chinese company fell by 20 per cent, LSEG data shows. Lin commented that this year has been “very quiet” in terms of M&A.
U.S.-China relations have also become more strained, with U.S. President Biden signing an executive order that prohibits some new U.S. investments in China in sensitive technologies. Lin believes that business people should be left to decide on investments and that politics should not be involved in daily business.
IPOs of Chinese companies in the U.S. have also dropped from the highs of 2021. Chinese firms have raised about $400 million via U.S listings so far this year, according to LSEG data. Lin remains positive for 2024, hoping that relations and business activities will improve.