By Mario Osava
RIO DE JANEIRO, May 18 2004 (IPS)

Brazilian President Luiz Inacio Lula da Silva will visit China May 23-27, heading the biggest trade mission sent by Brazil in search of markets and investment.

It will be ”the trip of the year,” said the president, who last January travelled to India, another giant of the developing South with which Brazil’s leftist government is attempting to forge a deeper alliance to expand trade and the weight of the developing world in international decision-making.

Although Brazil has ambitious political objectives and wants China to support its aspiration to a permanent seat on the United Nations Security Council, next week’s visit will be solely focused on business.

More than 480 business representatives have signed up to accompany Lula. But on previous occasions, not all applicants have confirmed their travel plans. So far, the biggest business entourage accompanying the president abroad numbered 150.

China is the new El Dorado for Brazil’s exporters, whose sales to the world’s most populous country have soared in the past three years, from 1.09 billion dollars in 2000 to 4.53 billion in 2003.

Last year, exports grew 79.8 percent, making China the third-biggest market for Brazilian exports. This year, the Asian nation is expected to push Argentina out of second place, although the United States will remain the top market for Brazil.

Exporting mainly soy beans and iron ore, Brazil posted a surplus of 2.23 billion dollars in trade with China in 2003. Through President Lula’s visit, the Brazilian business community and government want to diversify exports and economic relations with China.

More than 250 food products, chemical, cellulose, construction and machinery companies have expressed a desire to take part in the trade mission, as have 30 businesses involved in tourism, a basically non-existent aspect of relations between the giants of Latin America and Asia.

Closer ties with China would offer ”fantastic” possibilities, but Brazil ”is arriving 15 years late, when the party is nearing its end,” Argemiro Procopio, professor of international relations at the University of Brasilia, said in an interview with IPS. Procopio took 15 students to China on a study trip last year.

Brazil has much to learn from the Chinese, and the best way to do that is by promoting joint ventures between companies from the two countries, said the professor. With very little leather of its own, due to a limited livestock industry, China has become the biggest exporter of footwear, Procopio pointed out.

Also made in China, a country with relatively few Christians, are millions of images and statuettes of Catholic saints, as well as Christmas tree ornaments that are sold all over the world, he noted.

To keep the Brazilian market from being flooded by cheap Chinese products, the best strategy would be to strike up partnerships with Chinese industries, to produce goods in either of the two countries, recommended Procopio.

Several large Brazilian companies are doing just that. One of them is the Companhia Vale do Rio Doce (CVRD) mining company, which has set up a joint venture, Baovale, with China’s Baosteel, to produce steel using iron ore from Brazil and coal from China.

One of Baovale’s projects is a steelworks plant under construction in the northern Brazilian town of Sao Luis.

The Empresa Brasileira de Aeronautica (EMBRAER), one of the world’s two major regional-plane producers, is also entering a business partnership with a local company in China to produce planes in that country.

Closer bilateral tries could give development in Brazil a major boost, given the fact that China has nearly 500 billion dollars in foreign reserves and is keen on investing in the construction of roads and ports in Brazil, Carlos Tavares de Oliveira, an adviser to the National Confederation of Trade, told IPS.

The author of ‘Despertar da China’ (The Awakening of China), a book on trade between the two countries, Tavares de Oliveira believes Brazil could greatly expand and diversify its exports to the Chinese market.

After soy beans will come the turn of coffee and cotton, as well as sugar, the consumption of which is growing fast in China, he said. Sales of industrial products like cars, spare parts and planes are also expected to rise.

But Brazil is in urgent need of investment in transportation infrastructure, a bottleneck standing in the way of expanding agricultural output and exports. Chinese investment could help make up for the shortfall in national capital, say the analysts.

Brazil could draw between five and 10 billion dollars in investment from China over the next few years, according to Luiz Castro Neves, who was designated as Brazil’s new ambassador in Beijing.

But to consolidate an alliance with China, it would be a good idea to bring the two countries’ international policies into line, said Procopio, who recommended that Brazil avoid, for instance, supporting Taiwan and Tibet’s claims to independence.

With regards to human rights, a focus of pressure from industrialised countries, a greater accent should be put on the economic and social ”rights of the majorities,” which are strongly defended in China, rather than merely the ”individual and civil rights of a privileged minority,” the professor added.

A report released by the Economic Commission for Latin America and the Caribbean (ECLAC) on May 12 noted that Latin America’s exports to China grew 72.1 percent between 2002 and 2003: from 6.32 to 10.87 billion dollars.

In that period, Argentina’s sales to China climbed 143.4 percent, Chile’s 58.5 percent, Peru’s 13.1 percent and Mexico’s 11.7 percent, according to the regional United Nations agency.

The Southern Common Market (Mercosur – made up of Argentina, Brazil, Paraguay and Uruguay) saw a 96.5 percent increase in exports to China.

* Gustavo González in Chile contributed additional reporting.

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