In May, the first Chinamax nudged its way into Guanabara Bay in the state of Rio de Janeiro. Chinamax is a new class of bulk carrier, 362 metres long and able to carry 400,000 tonnes of iron ore from Brazil to China – twice as much as most vessels currently plying the route. Vale, a Brazilian mining behemoth, has ordered a fleet of Chinamaxes. The company clearly expects that China’s demand for Brazil’s natural resources will flow, not ebb, for many years to come.

CBLJ 1106This month, China Business Law Journal publishes its second major article on China-Latin America trade and investment. We first tackled the topic in April last year. Since then, trade and investment across the south Pacific has continued to grow. China’s bilateral trade with Brazil alone rose 53% in 2010 to US$56 billion. The PRC is Brazil’s largest trading partner. Also in 2010, says Sobeet, a Sao Paulo think-tank, China accounted for around US$17 billion of foreign direct investment into Brazil – almost 36% of the total.

Latin America offers much opportunity for Chinese companies. As our coverage reveals (Tango in the dark), China is climbing the value chain, and natural resources are no longer the only game in town. A Chinese delegation to Brazil, led by trade minister Chen Deming in May, suggested that Chinese car maker Geely might build a plant in the country. Shenzhen-based telecoms equipment manufacturer ZTE is to build an industrial park close to Sao Paulo which will employ 2,000 people, including 200 in research and development.

For Chinese lawyers, trade and investment with Latin America remain a new frontier. A growing number of international law firms have offices in both Latin America and China.

But as trade and investment relationships develop, tensions are bound to arise. Our research found much flowing from China to Latin America, but little going the other way. Vale competes with Chinese groups for access to iron and copper reserves in Africa. Politicians from Argentina to Venezuela worry that an influx of Chinese products will devastate their countries’ industry.

Arguably, despite growing economic links, China and Latin America know little of each other’s cultures, customs and laws. With our other coverage this month focusing on the legal practice in China’s capital markets, China Business Law Journal hopes to continue to be a source of valuable information for Chinese investors crossing the Pacific, and investors coming from overseas to China.