Research On:"Foreign Direct Investment Development Between Brazil And China"

The world has been changing a lot especially in the last decade when the term "BRIC" was introduced to the world by the Goldman Sachs. In2001, Goldman Sachs published a report,"Building Better Global Economic BRIC" by Jim O'Neil, where it said that Brazil, Russia, India and China (BRIC) have such an economic potential that they could become the four dominant economies by the year2050, since they are the biggest and fastest growing emerging markets.From these reports the world started to pay more attention to the BRIC economies, particularly China, the fastest growing economy in the world today. Nowadays, economists around the world are very interested in the relationship between Brazil and China as it is already the number one Brazilian partner and vice versa.The growing economic relationship between the2countries is evident from the following imports and export growth, where Brazil mainly export cars, planes, soy and iron to China, and import electronics and telecommunication machines, coal, chemicals, engines and so on from China. Plus there are a lot of agreements between the two countries including but not limited to science, technology, sports, transport, sanitary and phytosanitary standards, visas, industrial cooperation, investment and trade, among other things.However, the ways of doing business are different as the rules, culture and costumes, finance and people, etc., which makes very hard for companies to enter the host country's market and for people to invest in it. Due to improper knowledge in the same field many Chinese and Brazilian companies have already failed to enter each other's'market, losing grand opportunities and a lot of money.These matters have been discussed many times, but it has no publications about how companies from different countries should and should not do in terms of market entry strategies based on different ways of doing business.This paper will be written from an investment and financial advisory point of view, showing and arguing a valuation project and both parties (Brazil and China) perception of the investment. It will be discussed what a Chinese company should and should not do to enter, invest and succeed in the Brazilian market and vice-versa, passing through the mistakes it could make; the culture difference; rules, and how to deal with their finance and investments. All these topics will be explained and argued through a case study for a better understanding.