The Chinese did not even need to buy any land for their plant – the state government of Bahia gave it to them. As a fiscal incentive, the mayor of Barreiras negotiated with a local landowner and business to donate 100 hectares of land for construction of the plant.
As a condition, the Chongqing Grain Group must build its plant within three years. Although a launch ceremony for the project was held in June, construction has not yet begun.
That’s because the Chinese are waiting for environmental permits before they can begin building. Approval is not guaranteed, as demonstrated by the case of Vale and Baosteel, forced to cancel construction of a steel mill in 2009. Chongqing Grain Group almost certainly faces delays as the land donated by the mayor contains a nature reserve.
And if environmental laws were not restricting enough, an appearance by the largest social movement in Latin America may scare the Chinese away. Across the road from the intended site of the soy plant, members of the Brazil’s landless rural workers’ movement, the MST, have pitched their tents, intent on squatting until the government expropriates the land and redistributes it to them.
The case of Chongqing Grain Group shows that rather than fearing a Chinese invasion Brazil should concentrate on lowering barriers to Chinese business. In the meantime, should the new measure pass – enforcing a selective welcoming of FDI that specifically excludes China- Chinese companies will likely take their proposed investments elsewhere.