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Brazil should be more open to foreign investments, says new Chinese ambassador in Brazil, Chen Duqing. According to him, the country should also seek to raise productivity and make its products known throughout the world. In an interview with Agência Senado, a day before Wu Bangguo, president of the Committee of the Permanent Council of Chinese Popular Assembly arrived in Brazil, Duqing stated that there are opportunities and challenges in the globalization process. “In many aspects, China is more open than Brazil, that could be more flexible in some decisions, to introduce more foreign capital”, he said. Duqing defended a wider economic cooperation between the two countries. However, he warned that, if some Brazilian economic sectors don’t upgrade, not only Chinese products will reach the country, but also products from countries such as Indonesia and Vietnam.

Agência Senado – The visit of the president of the Committee of the Permanent Council of Chinese Popular Assembly is taking place two years after bilateral visits made by the presidents of the two countries. Would you say Brazil and China have a deeper political relationship nowadays?

Chen Duqing – Political relationship between these countries has been kept in a high level. China, as a strategic partner, believes it is important to keep political interchange in a high level. Vice-president José Alencar has already been to China this year. Now, the visit of China’s Popular Assembly President will carry on with this relationship. According to China’s hierarchy, Mr. Wu Bangguo is the second in command. Thus, we may notice the very political meaning of this visit.

Agência Senado – President Lula has favored a “strategic relationship” with China and so called South-South partnership. On the other hand, Brazilian opposition believes Brazil is moving away from other important markets. When it comes to bilateral relationship, opposition sometimes says Brazil gives China more importance than it gives to Brazil. What do you think of that?

Chen Duqing – This is perhaps a unilateral point of view, which does not comprise the situation as a whole. The globalization process has many opportunities and challenges. Brazil and China could work together so that this global tendency may favor developing countries. It’s a shame developed countries have been responsible for making the rules up to now. Yet, South-North and South-South cooperation are issues we must be careful with. Globalization brings challenges, we shall not think of one side only. We must admit North countries economies are stronger than ours, but we shall manage to keep a good relationship, one that doesn’t go against our interests.

Agência Senado – Is the great amount of foreign investments in China a result of its flexibility with foreign capital?

Chen Duqing – Your question has two sides. First, China has been flexible in accepting foreign capital to increase our economic growth. Foreign investors are also bound to find places where they can have more productivity and profits. This is a market’s rule. Nonetheless, China is more open than Brazil. Brazil could be more flexible and more open to a certain extent, so that more foreign capital would be invested in the country. There is a curious detail. Many foreign companies installed in Brazil declare themselves as national companies. But these investors don’t want others to invest in Brazil. Those who are already here should not be favored by the process. Competition must be accepted.

Agência Senado – You mean Chinese companies?

Chen Duqing – Not only Chinese companies, but also from other countries. Infra-structure in Brazil, for instance, is something businessmen want to invest in. But conditions are not clear, thus they feel a bit inhibited.

Agência Senado – During the visit of President Hu Jintao to Brazil, China promised it would make investments in infrastructure, in exchange of the recognition of China as a market economy. But two years later there is nothing concrete. How are discussions over these investments?

Chen Duqing – My Brazilian friends and some businessmen say there’s a “bottleneck” which limits economic growth. At the moment China has great conditions to support Brazil. Interest shown during the visit of our President has not faded. The problem is that making great investments is not as simple as buying a plane ticket, leaving the next day. There are many issues to solve, as viability studies, environmental impact studies and land dispossession. I’ve been mentioning the case of a steel factory in São Luís, Maranhão. It was supposed to be built by Vale do Rio Doce and Chinese company Baosteel. Though a lot of work has been done, the project is paralyzed. A top executive from Vale do Rio Doce has told me the problem is not on the Chinese side, yet it’s a problem with the Brazilian state. Baosteel has also started working with National Steel Company (CSN) in a project at Itaguaí (Rio de Janeiro), which shows Chinese are doing their best.

Agência Senado – Bilateral cooperation in science and technological field has had good results, as Brazil and China launched a binational satellite. China has made great investments in this area, with scientists’ formation and creating many technologic facilities. In your opinion, what’s the potential of cooperation in this field?

Chen Duqing – Now it’s necessary to stimulate scientists of both countries, so that they would gather and find new areas for cooperation. The satellite is a success, something which had never happened in two developing countries before. Embraer planes also regard high technology. In computers’ field, Brazil has got really advanced areas. I’ve visited a company in Brasília (Brazil’s capital) which is trying to enter Chinese market, and I frankly told them they should make their product known. When we talk about computers, we think of Japan, the United States and Europe, we don’t think of Brazil.

Agência Senado – In economic terms, China is becoming the second nation in the world, and perhaps, it may be the first in the future. In many cases it represents an opportunity to Brazilian business people, in other cases it is seen as a risk. Are there more opportunities or risks?

Chen Duqing – A businessman has recently told me that, in trading with China, Brazil is favored twice. First, as China buys many Brazilian primary products, the price of such products are on the rise. Also, as China exports products with competitive prices, it helps holding inflation. Some sectors feel threatened by China. But this is competition. If those sectors don’t raise productivity, they will not be able to resist. If Chinese products don’t get to Brazil, products from Indonesia or Vietnam will. Some people say Brazil has always been protectionist. During a certain stage it may be necessary, but some companies get used to it and complain over competition, without rising productivity. And the costumer pays for that. The best option is cooperation between companies. Brazilians can get into Chinese production line and vice versa.

Agência Senado – Isn’t there the risk of Brazil becoming only a raw material exporter, while China would supply industrialized products?

Chen Duqing – No, because Brazil is not a farm, and China is not the world factory, as India is not its office. Brazil has potential to rise again, as it has done in the past. But we have to think why Brazil got behind other countries in the last years. Brazilian should draw this conclusion. China may buy other products, since they have quality and are competitive. Even in the case of airplanes, China may buy more. But Brazil must market its products. Brazil has high quality coffee, but Germany and the USA sell more. Grains are not enough, Brazil should sell industrialized products.