China and Brazil: Eye to Eye on Political Issues and Economic Cooperation

China Today: Brazil exported US $17.975 billion worth of agricultural products to China in 2012, which accounted for 18.7 percent of its total farm exports. President Dilma Roussef vowed to take major steps to diversify trade ties with China, beyond raw material exports. What measures have you taken in this regard?

Mr. Carneiro: It is no easy task. Brazil is highly competitive in iron ore and soy beans. Barring the robust sales of Embraer planes, our exports to China are limited to petroleum, soy beans, iron ore, sugar and cellulose, which make up 80 percent of our total exports.

There is a political will to change this structure but also a practical need to sharpen Brazilian products’ global competitive edge, which has been acknowledged at home. The Brazilian government is doing its part by improving infrastructure, reducing energy costs and lowering taxes. It also rolls out promotions in China for Brazilian products; for example, by sending business delegations here and inviting Chinese importers to Brazil. But we must recognize that beefing up competitiveness is our core task. The dip in our exports is partly attributed to a stronger Real, which leads to higher prices for our products. But the export figure is not bad. Brazil has no complaints about the trade balance with China, as we are the ones enjoying a surplus. What we look forward to is better quality bilateral trade.

China Today: Before you took up your post in Beijing, you had been Brazil’s ambassador to Colombia, where manufacturers have been worried about the influx of cheap Chinese commodities. The same misgivings also exist in your country, and Brazil has taken anti-dumping measures against some Chinese products. In this regard, what do you think producers in your country and other Latin American countries should do?

Mr. Carneiro: I think we should have a clear concept about anti-dumping. Some trade protection measures are legal under the framework of the World Trade Organization (WTO). Before we impose anti-dumping measures, we should first investigate whether or not the local industry has incurred losses caused by the supposedly-dumped import products. There is an expert panel on trade security within Brazil’s Ministry of Development, Industry and Foreign Commerce. Their staff conduct detailed and meticulous investigations. Anti-dumping measures not only target China, but also the U.S., Europe and countries in other regions. Indeed, most anti-dumping cases in our country are directed at China. In fact, other countries have lodged similar anti-dumping appeals against China. Even so, we’ve not received any complaints.

The competition brought about by Chinese products exists not only in Brazil, but also in the whole of Latin America, Europe, the U.S. and Canada. It’s not just related to China’s competitive labor costs, because the situation has changed. Chinese wages are climbing while some industries in China are also moving their operations to countries with lower labor costs. This is about economies of scale. Products manufactured in Switzerland and China have to be labeled with different prices. China could spawn cheaper ones.

We acknowledge the fact that in some fields our products can’t compete with Chinese goods. For example, more than half of our mechanical and electronic equipment is imported from China, while in other sectors our products occupy a secure niche.

China Today: Concerning technical cooperation, China and Brazil have cooperated to develop and launch three satellites, with preparation of a fourth under way. In what other technical fields is there any cooperation between the two sides?

Mr. Carneiro: With respect to science and technology, as of now the most fruitful way the two governments have cooperated is in satellite launching, which is conducted jointly by the two countries. I once indicated to related departments of the two sides that we should spot new cooperation fields that are as representative and promising as the satellite cooperation. To be frank, we’ve not found any yet. As for the focus on scientific research, China is different from Brazil. For example, Brazil has abundant experience in agricultural science and technology while China has more experience in industry, where we have a weak foundation. The two governments have worked on seeking new cooperation opportunities in science and technology, and our universities can also play important roles in this regard.

China Today: In China’s newly-released development plan, that of the green economy has been given priority. Do you think Brazil will cooperate with China in the field of biofuel?

Mr. Carneiro: This is a very good question. Roughly 80 percent of China’s energy comes from coal. Chinese people want to change this situation. In fact, the poor air quality in Beijing recently is a reflection of the country’s reliance on coal. Brazil is well experienced in bioethanol. I believe as China’s interest in this field increases, we’ll see big opportunities for cooperation.

A research center on climate change and new energy has been jointly established by the two countries between Tsinghua University and UFRJ (Universidade Federal do Rio de Janeiro). Bilateral cooperation on bio-energy has taken shape as the two universities compare notes on bio-diesels and wind energy. I think China hopes that Brazil can develop a new generation of biofuels that can be produced not only by plants used for ethanol production but by any cellulose material, which will be a major advancement. We know China’s agriculture is mainly set to meet domestic needs. China cannot afford to put aside vast tracts for sugarcane or cassava plantation, whereas Brazil has plenty of land for biofuel production.

China Today: Recently Brazil introduced a spate of artistic activities into China. Within one month, marketing activities on the Bossa Nova, Capoeira and Brazilian films have been carried out. In the cultural field, what challenges are you faced with as an ambassador?

Mr. Carneiro: We have a very clear-cut goal on the image we try to project in our diplomatic activities. We try to display multiple sides of Brazil other than the stereotypical ones about football, Samba and carnival. We want to let Chinese people see different aspects of the Brazilian culture. This does not mean that the past image is bad. We just want people to know more.

Even poverty is also part of our reality. We want the image that comes to Chinese people’s minds when they think of our country to be one of the Amazon River, beaches, sunlight and music. In short, an image of a happy country. Therefore, we promote Brazil’s music, films and dance as well as other features of the country.

I think it’s agreeable to carry out cultural activities as this could be the best way to communicate with Chinese people. We focus on young people and their huge potential, because older people tend to have a fixed mindset. In formal exchanges, like the communication between governments and state-owned enterprises, talks are usually formal, routine and restrained. However, in cultural activities, we can come across many different people; in a more relaxed atmosphere we can enjoy interpersonal exchanges.

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