On the sidelines of the Fourth China International Import Expo (CIIE) held in Shanghai from November 5 to 10, Paulo Estivallet de Mesquita, Brazilian Ambassador to China, Fernando Lugris, Uruguayan Ambassador to China, and Luciano Tanto Clement, Argentina's Consul General in Shanghai shared their thoughts on trade between China and Latin American and Caribbean countries with Beijing Review. Below are edited excerpts of their views:
Paulo Estivallet de Mesquita, Brazilian Ambassador to China
China has been Brazil's main trading partner since 2009, and Brazil ranked ninth as China's main trading partner in 2020. Last year, Brazil and China established a record-high bilateral trade flow, with over $102 billion. A new bilateral trade record has already been achieved in 2021: From January to September, Brazil-China trade has surpassed $105 billion. Thus, it is fair to say that we have a mature and mutually beneficial commercial relationship. However, there is always room for improvement and that is why events such as the CIIE play an important role. More than 22 Brazilian companies were represented at the CIIE, all of them aiming at deepening their knowledge of the Chinese market and increasing their local presence.
To be successful in China, one should have a constant presence here. Companies should be willing to learn the Chinese way of doing business and adapt their institutional culture to the Chinese reality. That includes learning about what the Chinese consumer wants and being available to establish long-term person-to-person relationships, which are remarkable features of the business culture in Asia as a whole.
Another important point is to realize how demanding Chinese consumers are. Just to present a good product is no longer enough: Chinese consumers want to have good products, presented in a modern, adequate way.
Regarding opportunities, the growing urbanization of China, the expansion of its middle class and the changing of dietary habits mean that the complementarity between Brazilian and Chinese economies will be strengthened. Consequently, we will have the chance to diversify our agricultural exports to China, adding dairy, coffee and fruits to the list of exported products. We also think Brazil is well-positioned to become an important source of industrial inputs for China.
In 2020, Brazil exported more than $67 billion to China and imported more than $34 billion. Brazil exports mainly soybeans, iron ore, oil, beef and cellulose. China's main exports to Brazil are cell phones, TV parts, LEDs and integrated circuits.
It is relevant to stress how important our agricultural sector is for China (and vice versa). Brazil is China's main source of agricultural products. In 2020, more than 20 percent of China's agricultural imports came from Brazil. That means that a substantial part of what the Chinese people eat everyday comes from Brazil's world-renowned agribusiness sector. Brazil has proven time and again it can supply sustainable, high-quality food at competitive prices, in the large quantities required by the Chinese market.
For many countries, the global health crisis we are experiencing was a cue to engage in protectionism and disconnect from the international economy. That does not hold up when it comes to the relationship between Brazil and China. We have maintained mutual openness and, as a result, our bilateral trade has continued to grow.
China has more than $80 billion invested in Brazil, in sectors as different as energy, transport infrastructure and manufacturing industry. Brazil and China have decided, based on a consensus reached by President Jair Bolsonaro and President Xi Jinping, to explore the synergies between China's Belt and Road Initiative (BRI) and Brazil's Investment Partnerships Program (IPP). China is already the largest foreign investor in the IPP, but we believe there is room for enhancing China's presence in Brazil in that field as well.
Fernando Lugris, Uruguayan Ambassador to China
China is Uruguay's No.1 trading partner, and we are sending more than 30 percent of our total exports into the immense Chinese market. Uruguay has been participating in the expo since 2018. Over the past expos, we have promoted our meat products and have seen rising exports of lamb and beef to China each year.
Uruguay exports healthy foods all over the world, but mainly to China. As of November this year, 80 percent of the lamb and 60 percent of the beef Uruguay exports go to China. Uruguay has become China's third largest supplier of milk powder, and ranks among the top four suppliers of soybeans to the Chinese market. We are willing to contribute to the food safety of China, with our producers of fruits, wines, olive oil and many other products all seeking to explore the large Chinese market. The COVID-19 pandemic has affected the movement of Uruguayan exports, and we are looking forward to a post-pandemic scenario of more active cooperation with China.
Trade between Uruguay and China has so far grown in a healthy manner, and Uruguay aims not only at boosting existing cooperation, but also promoting its trade in services. For example, Uruguayan software companies are currently looking for niches to enter the Chinese market.
Uruguay welcomes Chinese companies to make investments. Our agricultural sector has already attracted investment from Chinese enterprises in fields including soybean exports. We hope to see more investment in logistics and infrastructure. The IT sector is booming in Uruguay, and major Uruguayan IT companies like DLocal, and GeneXus are already entering China and expanding business in the Chinese market. We have also seen investment from China's hi-tech enterprises such as Huawei and ZTE in Uruguay.
Uruguay was the first of the Latin American and Caribbean states that expressed its willingness to participate in the BRI. For the market of countries along the routes, Uruguay has played a role as a Belt and Road logistics hub for other countries in South America. Chinese companies are able to use Uruguay's free trade zones and transport infrastructure to enhance their presence in other South American countries.
Uruguay has undergone a real revolution in the last decade and is now No.2 in the world for clean energy usage. We are ranking only after Denmark, with almost 98 percent of our energy coming from clean sources. Uruguay used to be an importer of not-so-clean energy. Now, it has become an exporter of clean energy to neighboring countries. We hope to boost investment in green hydrogen, and to provide new green hydrogen technology to other markets. As China is also working hard to carry out the transition to the use of clean energy, we are open to a cooperation that results in more production of clean energy for China. From the other side, solar panels produced in China have arrived in Uruguay at a reasonable price. Providing these kinds of technologies at reasonable prices helps drive clean energy use in developing countries such as Uruguay.
Luciano Tanto Clement, Argentina's Consul General in Shanghai
A total of 27 Argentine enterprises occupied stands covering 400 square meters at this year's expo. All of them were small and medium-sized enterprises; 20 of them were wine companies and the rest were producers of other agricultural products. In addition to Argentine beef, we also exhibited fish and lemons. Argentine lemons have recently become a major export into the Chinese market.
The major challenge facing Argentine enterprises is the distance between China and Argentina. Argentina is on the opposite side of the Earth from China. People of the two countries still do not
really know much about each other. For this reason, the CIIE is a platform for Argentina to promote its distinctive products such as wine and fish to Chinese consumers and gain further access to China's market. Argentine producers have worked hard in preparing for this expo.
In addition to food products, Argentina also exports satellites and research reactors. The country is a major creator of Spanish-language websites and it has developed advanced technologies for digital communication. Argentina has five unicorn companies, or private companies with over $1 billion of revenue every year.
For Argentine enterprises, the key to developing business in China is finding Chinese partners. We are encouraging our companies to work together with their Chinese counterparts in order to grow their presence in the Chinese market.
In May this year, we signed an important contract with Shanghai Tongsheng Logistics Park Investment and Development Co. Ltd., which operates in one of Shanghai's pilot free trade zones. Under this contract, the company will now handle all warehousing and logistics for Argentine products entering the Chinese market.
Argentina and China have been increasing trade as both economies continue to grow. Given this, we are very optimistic. The bilateral trade over the next two years is expected to be much better than that of this year.
(Print Edition Title: A Mutually Beneficial Platform)
Copyedited by Elsbeth van Paridon & G.P. Wilson
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