Brazil must pursue China capital: expert
Updated: 2015-05-11 04:15
By CHEN WEIHUA and BRUNA GAMA in Rio de Janeiro(China Daily Latin America)
Brazil needs to focus on Chinese investments now, with a peak of exports to China already having passed, according to a former Brazilian ambassador to China.
Clodoaldo Hugueney, who served as ambassador in Beijing from 2008 to 2013 and is now the president of the Brazil-China Business Council, told local daily newspaper Folha de Sao Paulo that the Brazilian economy will not have the same dynamism it had a few years ago, when commodity exports were on the rise and China's growth rate was higher.
As a result, Brazil should focus on attracting Chinese investment, he said. Hugueney believes that the Brazil-China relationship has been too focused on trade, and it is time for a change.
Brazil already has benefited from several Chinese companies that operate in the country. Chinese businesses are present in several fields, such as oil, energy and transportation. According to the former ambassador, the Chinese investments in Brazil are likely to rise.
"The Chinese will accelerate the investments in other countries, with incentives from their governments to buy companies abroad or start businesses," he said. "Brazil has benefited from that, but now the process will gain a new dimension, and not only in investments in natural resources. We have a huge deficit in infrastructure, which dampens agribusiness exports," he said.
In order to attract more investments, Brazil must modernize its business environment, simplifying the process to open a new business, Hugueney said. Opening a business in Brazil is widely regarded as difficult, because the process is bureaucratic and slow.
In addition, said Hugueney, Brazil should invest in areas in which the Chinese market is growing. Brazil's investments in China have now grown as China's investments in Brazil did, but Brazilian companies wanting to operate in the country can have positive results, he said.
"China's urbanization process is advancing," Hugueney told Folha de Sao Paulo. "That will make people eat more industrialized agriculture products, meat, fruit juice, which opens a great opportunity for the Brazilian agribusiness, not only for exports, but also for investments in restaurants and supermarkets."
Hugueney mentioned areas in which Brazil is strong and that can benefit from entering a market as big as China, such as steak houses, coffee production and banking automation.
"You must make China a priority in business, like Germany, the US, France and Korea did," he said.