Bright future for Brazil-China economic ties

Major economies reap benefits of complementary trade, cooperation

China and Brazil - two champions of economic globalization - will create jobs, two-way trade and investment opportunities in the next stage of their partnership boosted by the development of political ties and the Belt and Road Initiative, said officials and experts.

"Despite both the Chinese and Brazilian economies having been hit by declining global demand for goods and services over the past two years, the degree of interdependence between the two remains stable in bilateral cross-industry trade," said Yu Jianlong, secretary-general of the Beijing-based China Chamber of International Commerce.

Trade between China and Brazil totaled $73.42 billion in the first eight months of this year, a jump of 3.1 percent year-on-year. Brazil remained China's largest trade partner in Latin America, data from the General Administration of Customs show.

China exports mainly construction machinery, manufacturing equipment, electronics, textiles, garments and household appliances to Brazil. In addition to agricultural and mining products, Brazil's shipments to China include passenger aircraft, timber, steel, cotton and organic chemicals.

"China will continue to export consumer goods in exchange for Brazil's commodities such as soybean, beef, coffee and iron ore," said Wang Jian, a professor at the Beijing-based University of International Business and Economics.

He added that most of their imports are complementary so there is not direct competition.

Even though the trade of commodities and goods lie at the heart of bilateral business ties, Brazil's surging demand for modern services and need to upgrade its infrastructure such as smart city projects, power plants and container terminals have brought more opportunities for both Chinese project contractors and manufacturers, said Bai Ming, a senior researcher at Beijing-based Chinese Academy of International Trade and Economic Cooperation.

In addition to importing large sums of raw materials from Brazil, he said Chinese companies have also invested heavily in infrastructure. This includes hydropower facilities, construction machinery and automobile production in Brazil over the past decade.

BYD, one of China's major electric vehicle makers, has started building a cableway project in Salvador, Brazil. The network can provide the suburban population a fast and comfortable mode of transport that opens space for the development of the city.

The 20-kilometer-long seaside route will be partially built above the sea to connect Salvador's central business district to Saint John Island. It will have a capacity of 150,000 passengers per day. Connected to the city subway, it will provide seamless transport for the city of 2.9 million people, according to the Shenzhen-headquartered company.

The project will be the first of its kind for BYD in Latin America and will become part of the city's light vehicle transport system. It is scheduled to be fully operational by 2021, said Stella Li, BYD's senior vice-president.

"Backed by rich natural resources, Brazil is keen to upgrade service trade and related sectors such as logistics, tourism, shipping, healthcare, education and finance," said Chen Dongqi, an economist at the National Development and Reform Commission's Academy of Macroeconomic Research.

Eager to enhance their economic ties, China and Brazil signed a memorandum of understanding to diversify service trade in 2017. The aim was to upgrade their commerce structure from commodities exchanges. It has generated good results and diversified economic cooperation, according to the Ministry of Commerce.

The MOU, or the Two-Year Action Plan, is designed to encourage the two countries to improve service trade in eight areas including engineering, architecture, e-commerce, banking automation and tourism.

Brazil is the first developing and the first Latin American country to establish a strategic partnership with China. It is also the first Latin American country to have a bilateral trade volume of more than $100 billion with China, according to the Chinese Ministry of Foreign Affairs.

China supports Brazil in holding the 11th meeting of the leaders of the BRICS in November. It will jointly convey solidarity and cooperation among the BRICS countries and contribute to the vision of a second "golden decade" of BRICS cooperation, according to the ministry.