A retired army general, Brazilian Vice President Antonio Hamilton Martins Mourão recently made his first visit to China where he was received as by President Xi Jinping, an honor normally afforded to a head of state, and thus a sign of the importance attached to the relationship by Beijing. Vice President Mourão explains the underlying nature of the China-Brazil bilateral relationship today, and why infrastructure investment and agricultural products offer greater potential for further collaboration
Since 2009, China has been Brazil’s greatest trade partner. China also has significant diversified and dynamic investments in Brazil. What is your view on the current relationship between the two economies?
China is the engine of the global economy for many reasons. First, it has reached a high stage of development, with investments in technology and infrastructure, which made it a leader in the concert of nations. It is also the largest market in the world. I usually say that if half the 1.4 billion people in China spend $5 a day, it’s already a lot of money. In the late 1970s and early 1980s, the country went through a transformation after Deng Xiaoping’s policies. Let us remember that in 1980 China produced much less than we did and, today, they outgrew us by far. No doubt this is important. However, Brazil is here in South America, in the Western Hemisphere, and China is in the other side of the world. Even so, the presence of China, for instance, in the United States, has never been as striking as it is today – even considering that, in the 19th century, Chinese workers built American railroads. Brazil has never been expansionist; it did not participate in the expansion of colonial powers (that of the opium wars), in all those issues that caused China to lag behind for some time. Therefore, consequently, both countries have qualities that attract one another. Since 2009, a strategic partnership has been started and, in these ten years, trade flows between the two countries multiplied tenfold. In 2009, trade flows represented $10 billion dollars. Last year, it almost reached $100 billion.
In 2050, China will be the largest economy in the world, the size of the second and third economies together. How do Brazilians see China?
We have the Brazil-China Business Council (Conselho Empresarial Brazil China), which has been dedicated to building relations with the Chinese market. It is composed of both Brazilian and Chinese entrepreneurs. The Chinese settled in some parts of Brazil a long time ago, such as São Paulo, which has a very large Chinese community. But China is very far away and misunderstood. Plus, there’s also a perceived aggressiveness from the Chinese, which have been seeking markets for their products and securing food sources. But I should mention this: China’s greatest concern is social. They cannot go through any social turbulence, simply because of the sheer number of people they have there. To avoid that, they need to put food on their table and give them jobs and an income. This is why they need to prospect the global market aggressively. Especially given that the level of competition in the world today is enormous. Often people get this idea: “China is buying up Brazil. They come in and invest in steel mills, in hydropower plants, like in Belo Monte…” It’s much more of a matter of a perception that, at a given point, might have caused that noise in the relationship between Brazil and China. That’s why President Bolsonaro has given me the clear task of delivering a political message from our government to the Chinese government, making it clear that our desire is to maintain and strengthen our partnership.
What did the Chinese ask you about the situation in Brazil today during your recent trip there?
They weren’t at all concerned with the situation in Brazil. All the time, they wanted to show that they’re open and express their friendship with the country, highlighting the importance of Brazil. I was treated like a head of state there, that is, above my pay grade. President Xi Jinping received me and I sat with him – who, in the Chinese protocol, is the highest-ranking official –and he expressed their will to continue and strengthen our relations.
China wants Brazil to be a part of the One Belt, One Road Initiative: What do you expect from these proposals?
They mentioned the Belt and Road all the time, but our instructions were that we don’t want to be tied to the Belt and Road. We judged that there are already initiatives from both governments that are in line with what the Belt and Road is. China wants to invest in infrastructure in Brazil to make our exports easier and cheaper, which is great, but their companies will have to come into the country and submit to our legislation, our bidding laws. We cannot deliver them a closed package. This is not how things work in Brazil.
What advice would you give to Chinese investors?
I think there is a very large door open, because it is crystal clear that the government doesn’t have the resources right now to invest in infrastructure, energy, etc., which are more than necessary. I see the expertise the Chinese have in building railways, for instance. We have really opened our eyes here in Brazil to the fact that we need railroads to transport our production, so I think it’s a field in which they can come, participate and be successful.
Do you want to diversify exports?
We want to add value to our exports, but Chinese tax products with more added value. It’s that old story: if I sell them raw soybeans, the tax is very low; if I sell them soybean oil, the tax is higher. So we’ll have to discuss that and arrive to an agreement. There are small disagreements also about antidumping legislation. We had around 100 antidumping cases in previous years, but recently that number fell down to 13, so the issue was put forward there. Similarly, we mentioned the accreditation of our animal protein production plants, which have all been certified for the European Union, so they could also be certified for China. These operational discussions are relevant.
Do you think China also lacks knowledge about Brazil to do business here?
The large Chinese companies are already in Brazil: construction companies, Huawei, etc. They are already here; they are getting the hang of how things work here. The problem is that our business environment isn’t friendly. One of the most important tasks our government has is to unclamp our business environment. We have an excess of regulation and bureaucracy. We are not a very digital country. These things make it difficult for people from abroad: starting a business, starting a company, all the certifications you need to start a venture, environmental issues, indigenous communities, etc.
What is your final message for our readers about the future relations you would like Brazil to have with BRICS countries and China more specifically?
China’s priority is its food safety, and Brazil can be the world’s breadbasket. We have the conditions to produce high-quality food for the world. It’s one of our vocations. Therefore, the two countries could converge, improving our infrastructure. For instance, what we export today via the ports of Santos and Paranaguá has to go around the continent to reach the Panama Canal and then move toward China. We could take our production to the north. Our tropical agricultural frontier is today in Mato Grosso, Maranhão, Piauí, Tocantins, Bahia. I think we have to deepen this relationship that we have with China, and not only in commerce.