New Brazilian govt set to warm up to China to tackle economic challenges: experts

By Wang Cong Source:Global Times Published: 2018/10/30 22:13:41

Bolsonaro set to warm up to China to tackle economic challenges: experts

Soybeans imported from Brazil are unloaded at Port of Nantong in East China's Jiangsu Province in August. Photo: VCG

China-Brazil economic and trade ties will improve over time as Brazil's President-elect Jair Bolsonaro will likely resort to pragmatism and seek economic cooperation with China despite his previous unfavorable comments about China and Chinese investment in his country, Chinese analysts and business representatives said on Tuesday.

 "Regardless of what Bolsonaro said during the campaign, he cannot ignore the importance of economic and trade cooperation with China for the Brazilian economy and he cannot find an ideal alternative to China's massive investment and huge market for Brazil's domestic development and for Brazilian exports," Xu Shicheng, a fellow at the Chinese Academy of Social Sciences' Institute of Latin American Studies, told the Global Times.

Bolsonaro's negative comments about China have prompted concerns about disruption of relations with Brazil's largest trading partner.

"The Chinese are not buying in Brazil. They are buying Brazil," Bolsonaro reportedly said in reference to Chinese investment in Brazil. He also took a trip to Taiwan in April, drawing complaints from the Chinese embassy in Brazil.

The Chinese Foreign Ministry on Monday congratulated Bolsonaro on his election win and said it stands ready to maintain the sound growth of the China-Brazil comprehensive strategic partnership.

However, bilateral relations might cool down initially once Bolsonaro takes office early next year, given his tough stance against China and closeness with US President Donald Trump, according to Guo Cunhai, an expert in Latin American studies at the Chinese Academy of Social Sciences.

"Especially within the initial period of his presidency, China-Brazil relations will be somewhat tense and somewhat cool. And I think there will be some restrictions on Chinese investments," Guo told the Global Times on Tuesday.

Chinese companies in Brazil remain cautiously optimistic as they prepare for possible changes under Bolsonaro.

Companies that operate in Brazil were also told to prepare for possible measures against Chinese business interests in the country, according to an employee at a Sao Paolo branch of a major Chinese financial institution.

While Bolsonaro might not put a ban on Chinese investments, he could "find trouble for Chinese companies such as in environmental regulations and other areas," the employee, who requested anonymity, told the Global Times on Tuesday.

He added that the Chinese businesses in Brazil do not expect a "major shift" in policy toward Chinese companies. "Generally, the [political] right is considered business-friendly."

Pragmatism required

Analysts noted that Bolsonaro will need to warm up to China as he tackles an array of challenges in the Brazilian economy, including stagnating growth, mounting debts and backward infrastructure.

"He will definitely become more pragmatic once he takes office and realize he cannot just cut ties with China. Where would he find such a huge market for Brazilian products? Where would he find such big investments that Brazil badly needs?" Xu said.

Almost 20 percent of Brazilian exports go to China and the share of Chinese investment in Brazil's capital inflow rose from 1 percent in 2015 to 10 percent in 2017, according to an IMF report in August.

Brazil has also benefited from the US-China trade war, as China has turned to Brazil for soybean imports. In the first eight months this year, Brazil's soybean exports to China rose 20 percent year-on-year to reach $25.72 billion, according to Reuters.

While Bolsonaro, given his right-leaning inward policies and outspokenness, has been compared to Trump, Guo said that "Brazil is not the US. Brazil is big but not as strong. And it faces serious social and economic challenges domestically."

Guo also noted that Bolsonaro will soon realize he cannot get what he needs from the US, so he will eventually return to close ties with China.

Newspaper headline: Brazil ties to remain strong


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