Lula in China looking for investments

The Brazilian President visits Beijing on Monday and Tuesday to attract investment, in the midst of the trade war that began with the tariffs imposed by the President of the United States, Donald Trump, whose main target is China.

On this visit, which follows the one he made to Moscow, where he attended the Victory Day celebrations over Nazism on Friday and met with Vladimir Putin, Lula da Silva will meet with Chinese President Xi Jinping and participate in the fourth meeting of the China-CELAC Forum (Community of Latin American and Caribbean States).

China has been Brazil's largest trading partner since 2009 and the government sent a delegation of ministers in advance to prepare for Lula da Silva's visit, whose announced objective is to attract investment from the Asian giant in infrastructure projects, in addition to creating alternatives in global trade.

Leonardo Trevisan, professor of economics and international relations at the Pontifical Catholic University (PUC-SP) and the Higher School of Advertising and Marketing (ESPM), stressed that the visit is taking place at a delicate time and that China is a fundamental partner for Brazil, but recalled that businesspeople and the Brazilian government are also working to maintain close ties with the Americans.

“Brazil has never had a concentration in a single country in its entire economic history. Today, China owns 35% of Brazilian exports and 80% of our main product, which is soybeans, and practically 70% of petroleum derivatives (…). China occupies a very relevant space in the Brazilian economic scenario”, he recalled.

“However, even with this space, for several reasons, including a cultural identity with the American reality, today there is also a formal request from Brazilian business leaders to get closer to the productive structures, to the North American production chains,” added Trevisan.

When asked whether China would be a more reliable partner for Brazil on the global stage than the United States, an assessment made by the Brazilian government's special international advisor, Celso Amorim, the specialist reinforced that in the relationship with the Chinese the idea prevails “friends, friends, business aside”.

“Friendship with China is a situation, it is a reality, but business is separate. China is today the biggest buyer of Brazilian exports,” he said.

“But, taking into account what we have, our history, all our experience, everything we have with American culture, perhaps it is a little difficult for us to say that we are suddenly going to make a turn in that direction,” he added.

Trevisan pointed out that Brazil has not joined the New Silk Road, an international infrastructure project launched by Beijing more than a decade ago, and noted that, although smaller, Brazilian exports to the United States have greater added value.

“While we sell commodities to China, to the United States we sell products that have added value, products that generate jobs here, products that consume technology, products that somehow make Brazil more up-to-date in global production chains,” he explained.

In a recent move, China has increased its purchases of Brazilian soybeans due to tariffs imposed on the United States, another major soybean exporter. The replacement of American soybeans with Brazilian soybeans has been cited by U.S. producer associations, who fear that they will irreversibly lose the Chinese market.

Asked whether this hinders Brazil's position in negotiations on the 25% tariffs on steel and aluminum imposed by the United States, Trevisan assessed that it does not.

“The United States understands that we are selling soy, but our industry has made it very clear that it intends to continue like this, even with quotas, very close to the American industry,” he repeated.

“The United States will probably understand that these are temporary deals and that China has offered to buy. Another thing is well-built economic ties over decades with production chains,” he concluded.