By Fabio Teixeira RIO DE JANEIRO/SHANGHAI (Reuters) -Chinese workers at a construction site in Brazil for a factory owned by China's electric vehicle producer BYD are victims of human trafficking, Brazilian labor authorities said on Thursday in a growing controversy in BYD's biggest overseas market.

Brazilian labor authorities have accused BYD and Jinjiang Group of human trafficking at a construction site in Brazil. The situation underscores China's growing influence and the challenges foreign companies face in balancing local job needs and global expansion.

A contractor for Chinese electric vehicle giant BYD on Thursday denied claims that Chinese nationals were working in “slavery-like conditions” at a construction site for the carmaker’s factory in Brazil.

The 163 Chinese workers found in a construction site of a factory owned by Chinese electric vehicle producer BYD in Brazil's Bahia state were victims of international human trafficking, said local labor authorities.

Chinese workers at BYD's factory site in Brazil's Bahia were identified as human trafficking victims. The company and contractor Jinjiang Group are negotiating contract terminations for 163 workers. Allegations of slavery-like conditions create a potential diplomatic issue amid China's deepening investment in Brazil.