Brazil wants to expand and diversify trade partnership with China, says president of Apex

7 March 2017

China is considered a priority market in the work plan of the Brazilian Trade and Investment Promotion Agency (Apex), said the chairman, Ambassador Roberto Jaguaribe.

In this context, exchange with the Pan Pearl River Delta can help to improve the relationship between Brazil and China, the diplomat said during a meeting with a delegation of about 50 representatives of the nine provinces of the region, as well as Macau and Hong Kong, who arrived on Monday in Brasilia.

Although China has been Brazil’s largest trading partner since 2009, and an important investor, there are still many challenges, said the diplomat, who pointed out, for example, the fact that Brazilian exports to China are concentrated on a small group of basic, low value-added products.

Brazilian investment in China remains very low, at around US$500 to 600 million, while Chinese investment in Brazil totals over US$15 billion so far.

“As leaders of trade and investment promotion agencies and as members of the Brazil and China governments it is our duty to seek creative solutions to help put the relationship between the two countries on a new, even higher level than this,” said Jaguaribe, adding that it is necessary to expand, diversify and improve the quality of bilateral trade.

As part of this strategy, Apex, which works in a similar way to the Macau Trade and Investment Promotion Institute (IPIM), created Unidade China, which began operating in January 2017.

The agency’s chief executive Augusto Castro, said that bilateral relations are still in their “infancy” and that the potential path for growth is exponential.

With the creation of the hub, the proposal, according to Castro, is to work towards increasing investments between the two countries in the coming years, and he noted the environment, infrastructure, technological and business innovation, agri-business, image and promotion of culture and e-commerce as priority areas.

In the agri-business sector a great bilateral alliance should be created to expand cooperation, said the head of Apex, noting that Brazil is the second largest supplier of products in this segment to China and the biggest meat supplier.

The proposal is to expand to other products, given that China, as an increasingly prosperous economy and an ever higher per capita income, will demand more food and drinks and “no country in the world is as well positioned to meet that demand as Brazil.”

In the technological and business innovation area, there is a cooperation programme for technology parks in China and Brazil, which may enable the production of goods with higher added value and higher technological content, which are points of interest for the two countries.

With regard to environmental issues -this region’s biggest focus of interest – the director recalled that Brazil has modern environmental legislation and cited the Brazilian Forest Code, which requires farmers to set aside between 20% and 80% of their property for native vegetation.

Brazil has seen great progress in reducing CO² emissions by 41% between 2005 and 2012, said Castro, recalling that the participation of renewable energy in Brazil’s energy structure is the highest in the world, or about 42%.

One of the areas in whichat Brazil saw major advances in the use of these energies is in transport, with the expanded use of ethanol produced from sugar cane.

The representative of the Sugar Cane Industry Association (UNICA), Alfred Szwarc – which brings together 136 private companies – recalled during.the meeting with the Chinese delegation that greenhouse gas emissions have been reduced quite significantly since 1975 due to the launch of the programme to incentive national ethanol production.

At the moment there are almost 370 production units and the area employs more than 1 million workers.

The use of ethanol – the main biofuel produced in Brazil, which also manufactures biodiesel – has contributed to this process of reducing harmful emissions by the country’s energy system.

Currently, sugar cane and its most important product, ethanol, accounts for over 16% of the national energy structure, surpassing hydroelectric power, which for many years was the main source of renewable energy.

According to Szwarc, Brazil is developing new technologies to produce a range of new products such as 2nd generation ethanol from the use of sugar cane waste, as well as bio-oil, a fuel currently manufactured on a small scale for the aviation industry.

Brazil currently has a fleet of 26 million flex-fuel vehicles – which can run on gasoline, ethanol or the two fuels simultaneously – and the gasoline contains 27% ethanol.

There are regions of China that area already using this mixture, at 10%, which shows, according to the representative of Unica, it is possible to move forward with this process.

The President of IPIM, Jackson Chang, who leads the mission to Brazil, said the delegation was interested in finding out about the development of green industries and fostering interaction with both the Brazilian government and corporations.

The Macau government is giving great importance to the promotion of green industries and since 2008 it has held the Forum and Macau International Environmental Cooperation Exhibition. Jackson Chang invited Brazilian companies and government agencies to take part in the event, due to be held later this month in Macau.

Among the proposals for cooperation, Zhong Ming, of the Secretariat of the Executive Joint Conference of the Pan Delta region, noted interest in a partnership on the legislative knowledge that Brazil has on environmental protection, particularly in relation to the Amazon rainforest, as well as cooperation in tourism, as well as trade and economics.

The delegation will also have meetings in Brasilia with representatives of the Operations and Management Centre of the Amazonian Protection System (Censipam) with the Ministry of Defence and the Ministries of Environment and Planning, Development and Management. (macauhub)