Brazil can leverage Huawei investment in race to 5G
China's telecom giant Huawei is considering building an $800 million plant in Brazil, the world's fourth-largest smartphone market. Huawei can help Brazil gain ground in the race to the forefront of 5G technologies, advancing the diversification of manufacturing in the Americas.
Brazil is confronted with a daunting challenge in restarting the process of industrialization, but Huawei's investment can be deemed as leverage to create momentum for Brazil's next round of economic growth. Huawei reportedly plans to produce 5G-enabled smartphones at its new plant in Brazil. Once 5G-related manufacturing becomes a reality in Brazil, the country's economy will gain new impetus.
Huawei's investment is likely to directly and indirectly add thousands of jobs in Brazil. Although the US has asked countries to ban Huawei outright, Brazil said in June that it would not exclude the company from its 5G network. US President Donald Trump can't block Latin American countries to shun Huawei. Huawei's plan to localize the production of 5G-enabled smartphones in Brazil will promote the development of the country's smartphone market and improve the core competitiveness of its manufacturing industry.
Huawei is at a critical stage in the expansion of its business in Latin America. Although the US has some clout in the region, some nations are trying to resist the pressure from Washington and provide fair treatment to Chinese companies. Those countries are seeking to reduce dependence on the US and diversify their trade and business partners. Huawei can seize this opportunity to step up investment in Latin America.
Huawei founder Ren Zhengfei said recently that the company simply wanted to make a little money in the past but now it aims to beat the US, according to media reports. The company is adjusting its global investment structure to avoid "death" and prepare for a counterattack. Huawei's plan for Brazil shows that the company attaches great importance to Latin America, which is one of the fastest-growing mobile markets in the world.
Brazil has the largest economy in Latin America. Huawei's efforts to localize production in Brazil will help avoid tariff and non-tariff barriers on Huawei's 5G-enabled smartphones and enhance its competitiveness in Latin America.