Brazil’s rapidly developing agricultural industry provides new opportunities for Chinese infrastructure companies, because Brazil finds it necessary to build more ports and railways to improve its product transportation system, China’s Ambassador to Brazil, Li Jinzhang, said last week.
Brazil’s agriculture industry has become an important pillar of the country’s economy after years of development, but its further growth is “limited because of the lack of enough railway lines and ports” to send the products to the international market in time.
“China has accumulated profound experience in infrastructure construction and has developed a mature team for design and construction with advanced machinery and equipment. Brazil has realized our advantages in this area and is willing to cooperate with Chinese companies,” Li said.
Brazil’s agricultural industry has maintained a 3.6 percent annual growth since 2007, much higher than other countries in Latin America, according to the Organization for Economic Cooperation and Development.
However, the country’s newly developed agriculture centers are mainly located in the central and western areas, far from the large ports, and it takes a long time to send these agricultural products to ports via highways.
“Brazil needs to build new ports and railways to meet the requirement of its agricultural development. Some Chinese companies, such as the Road & Bridge International Corp and China Harbour Engineering Co, are closely following these projects in Brazil’s northeast and its Amazon basin,” Li said.
He said that Brazil’s building industry is rather developed and that the two countries can deepen cooperation in the building of infrastructure by following the principle of “complementary advantages and mutual benefits”, especially as Brazil hosts the 2014 FIFA World Cup and the 2016 Summer Olympic Games.
Chinese companies have gained many large projects from Brazil. Earlier this year, China’s State Grid Brazil Holding SA and Brazil’s state-controlled Eletrobras won the bidding to build a 2,092-kilometer-long transmission line and converter stations for the Belo Monte dam.
This is China’s first overseas project applying ultra-high-voltage power transmission technology, which is developed by China with intellectual property rights. The project is regarded as a major breakthrough for China’s electricity industry.
In the meantime, some of China’s largest infrastructure companies, such as the Panzhihua Iron and Steel Group, have established branch offices in Brazil, and the China Railway Group and China Railway Construction Group are preparing to enter the market.
“There are more and more Chinese companies establishing their offices in Brazil,” Li said.
He said he thinks that Brazil’s infrastructure construction projects follow a market-oriented model, which offers fair and open opportunities for international companies to participate, including Chinese companies.
However, Li also said Chinese companies should fully understand Brazil’s policies of commerce, environment and labor protection before they enter the market.
“Brazil is indeed an investigation hot spot because it has profound natural resources and a friendly society. But we also need to realize that Brazil’s legal system is very complicated, and Chinese companies need to first have a brief understanding about it,” Li said.
Many Chinese companies have entered the Brazilian market in various industries such as infrastructure construction, oil, automobile, air conditioning and electricity.
Gree Electric Appliances Inc, Sany Heavy Industry Co and Jianghuai Automobile Co have even established local factories in Brazil and enlarged their market shares. Some high-tech companies such as Internet and electronic technology companies also view Brazil as a golden opportunity for their international development.
“Chinese companies can cooperate with each other and Brazilian companies to strengthen their competitiveness and avoid difficulties,” Li said.
Trade between China and Brazil reached 547 billion yuan ($90.3 billion) in 2013, making Brazil the ninth-largest trade partner of China, while China is Brazil’s largest trading partner.
However, Brazil also initiated more than 30 anti-dumping investigations against many kinds of Chinese products in the past year.
“We need to view this problem objectively, because the overall image of the China-Brazil trade is very positive and we enjoy a large trade amount. We should not lose our confidence in it,” Li said.
He said the Chinese and Brazilian governments are having a series of negotiations and communications over this problem and hope it can be solved as soon as possible.
He added that he thinks it is very normal to have some disputes while enlarging the bilateral trade between China and Brazil, and that the key point is to solve these problems through better communication and coordination