In Brazil, Hu Jintao aims for bigger piece of Latin America trade
A meeting between Brazil's President Luiz Inácio Lula da Silva and China's President Hu Jintao is expected to strengthen the two nations' growing economic ties. China already trumps the US as Brazil's top trading partner.
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Between 1995 and 2000, Brazil’s exports to China were stable at around $1 billion per year. They rose quickly in 2001 and shot up by about 60 percent a year until 2003. Although the rate has slowed, Brazilian exports to China continued to rise through the economic downturn.Skip to next paragraph
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“There is one reasonable advantage we have in dealing with China," says Paulo Ferracioli, a coordinator at the recently inaugurated BRIC Centre for Study and Research in Rio de Janeiro. "They need commodities and we need manufactured goods. They produce what we need and we given them what they need. There is no doubt that our exports to China have been very important during the crisis in which Brazil coped very well.”
The Brazilian government is clearly eager for more. “In spite of the extraordinary growth in Brazil/China commerce, it must be recognized that a lot can still be done considering that Brazil represents just 1 percent of China’s global purchases,” Brazil’s Ministry of Foreign Trade wrote in a report recently.
And many see a new phase on the horizon. The Chinese are now selling aircraft to Venezuela and Ecuador, and investing $10 billion in Brazil's state-controlled Petrobras to guarantee an oil supply. Maciel says China Bank has opened a branch in Brazil and that the Commercial Bank of China is looking to do the same.
Missed opportunity for the US?
Some have worried about China’s political intent. Evan Ellis, a national security professor at the National Defense University, says it's a mistake for the US to be overly suspicious of China's regional economic expansion but that it's likely expanding trade ties will lead to greater Chinese political influence in a region where the US long held sway.
China's rising economic clout will give it "influence over governments to pressure them in certain ways to push the global economic agenda, in ways that might not be beneficial to the US," said Mr. Ellis. There could be the "temptation to become involved politically to defend their economic interests in the region."
Most analysts, however, see pure pragmatism at play. Whatever the motivations, it underscores a missed economic benefit for the US, argues Eric Farnsworth, vice president of the Council of the Americas.
“The [Chinese] see Latin America broadly as very large potential trade partners,” Mr. Farnsworth said. “The US has become much more inward-looking economically. … People in the region understand that, and say, ‘we in Latin America have to expand our links with the rest of world.’"