One of Brazil’s most high-profile Chinese investors has become embroiled in a scandal that threatens to upend its presence in the country. Chinese electric vehicle (EV) manufacturer BYD was building a factory in Brazil’s northeast state of Bahia—which would be BYD’s biggest EV plant outside Asia, with a production capacity of 150,000 vehicles per year—when government authorities ordered a halt to construction over serious labor-rights violations. As Kalyeena Makortoff at The Guardian reported, authorities found that over a hundred workers were being held in “slavery-like conditions”:
The workers, who were hired by a contractor called Jinjiang Construction Brazil, were said to be unable to leave without permission, and more than 100 had their passports withheld. The workers were hired in China and brought to Brazil.
[…] Authorities from the public labour prosecutor’s office had been investigating the site since November. “We found that the work of … these 163 workers, was carried out in slavery-like conditions,” the local labour prosecutor’s office said during a news conference on Monday.
“Minimum safety conditions were not being met in the work environment,” authorities added.
[…] The investigation found that workers were forced to sleep on beds without any mattresses, and more than 600 workers had been sharing eight portable toilets which were in a “deplorable state”, lacking toilet paper and water.
A lack of kitchen space also meant food was being stored near bathrooms and in unsanitary conditions, and prepared meals were found left open on the floor, exposed to dirt and without being refrigerated. Most workers were forced to eat their meals in their beds.
“The conditions found in the lodgings revealed an alarming picture of precariousness and degradation,” the prosecutors said. [Source]
Brazil is BYD’s biggest overseas market and a key part of the Chinese auto industry’s strategy to avoid Western EV tariffs by moving production out of China. BYD’s $480-million EV manufacturing plant planned in Brazil was recently touted by Brazilian state media when President Luiz Inácio Lula da Silva welcomed Stella Li, Vice Executive President of BYD and BYD CEO for the Americas, at the presidential office in early December. Chinese state media has also published glowing articles about BYD’s presence in Brazil.
In October, BYD Brazil sent employees to China for an exchange program meant to “absorb the knowledge from Chinese experts and bring it back to Brazil.” BYD’s contractor, Jinjiang Construction, has worked on BYD construction sites in numerous cities across China and has sought to hire various positions in Hungary and Turkey. However, Reuters reported that Jinjiang Construction has had a troubling worker-safety record:
From 2018 to 2022, Jinjiang was ordered by Chinese courts to compensate workers in five disputes involving work accidents and injuries, according to Tianyancha.
It was fined in three cases in 2023 and 2024 for violating worker safety regulations, according to the database.
A penalty record also showed that in May 2022, a worker at a construction site of BYD’s in Hefei was killed in a falling accident. Jinjiang, the chief contractor of the project, was fined 310,000 yuan alongside two sub-contractors by the local authorities in 2023 for failing to implement safety measures. [Source]
Amid this latest controversy in Brazil, BYD announced that it “has decided to immediately terminate its contract with the contractor for a portion of the construction work.” But as the Financial Times reported, BYD’s head of public relations Li Yunfei stated that “certain foreign forces” had smeared Chinese brands and slandered China to “undermine the China-Brazil friendship,” and Li shared a Weibo post by Jinjiang Construction arguing that the Brazilian government’s claims of labor-rights violations were false. Last week, the Brazilian government stopped issuing temporary work visas for BYD.
Brazil’s relationship with China now faces greater uncertainty. Lula hosted Xi Jinping in November during the G20 summit in Rio de Janeiro, after remotely attending the BRICS+ summit in October. Commentators have questioned the coherence of the increasingly diverse group of countries and the extent to which its members were willing to coalesce around China’s global vision. One of the major headlines to emerge during this period was the Brazilian government’s decision against formally joining the Belt and Road Initiative (BRI), which some observers interpreted as a rejection of stronger ties with China. Writing in The Diplomat on Monday, however, Aparna Divya and Salman Ali explained the potential rationales for Brazil’s calculated approach to the BRI:
Brazil’s cautious approach to joining the BRI reflects the nuanced balance between strategic pragmatism and economic gains that defines its foreign policy. In Latin America, intergovernmental rhetoric about a rising Global South often meets the hard realities of economic bargaining. Brazil exemplifies this careful calculation of maximizing economic gains while maintaining autonomy. The stance is influenced by factors like its relationship with China, its trade balance with China, its regional role alongside India, and the potential trade conflict between the United States and China.
Brazil’s agreement on project-based collaboration under the BRI, without formal membership, demonstrates its pursuit of strategic autonomy in a multipolar world. Instead of committing to the BRI as other Latin American nations have, Brazil will align Chinese investments with domestic priorities, especially those enhancing Brazil’s agricultural and industrial competitiveness. By leveraging this cautious engagement, Brazil retains control over the terms of its partnership with China, seeking not only economic benefits but also a greater balance of power in its international relations.
[…] This can be seen as a long-term strategy to maximize Brasilia’s negotiating power. Endorsing the BRI without securing concessions would weaken Brazil’s leverage. Instead, a reserved stance allows Brazil to press for terms that strengthen its economic standing and trade independence without creating unsustainable dependencies. [Source]
