China Says It’s Willing to Seek Trade, Investment Deals With Brazil

(Bloomberg) -- China is open to negotiate trade and investment agreements with Brazil, including a double tax treaty, as part of a broader move to engage the Latin American commodities giant, Beijing’s new ambassador in Brasilia said.

"We’re willing to study, together with the Brazilian side, measures to facilitate and liberate trade and investments, negotiate agreements to protect investments and avoid double taxation," Ambassador Yang Wanming wrote in response to questions from Bloomberg.

The Ambassador’s comments come after Brazilian President Jair Bolsonaro sought to dial down his highly critical comments on the campaign trail about China, Brazil’s most important trade partner. Last year the total amount of goods traded between the two countries reached $113 billion. With over $70 billion of Chinese money currently invested in infrastructure, logistics, agriculture and energy, the Bolsonaro government wishes to avoid antagonizing Beijing as it struggles to boost Brazil’s recovery.

China Says It’s Willing to Seek Trade, Investment Deals With Brazil

In the first exclusive interview since arriving in Brazil in December, Yang said China’s relations with Brazil are “mature, stable, healthy and dynamic”. He dismissed suggestions of a deterioration in bilateral ties under Bolsonaro, who recently visited Washington and vowed to fully align with U.S. President Donald Trump’s foreign policy.

“Pragmatic cooperation is the touchstone in the relations between China and Brazil,” Yang wrote. “The new government has been clear that it will follow the spirit of contract law and the guidance of the market to promote even more trade and investment between Brazil and China”.

Chinese companies, like State Grid, are among the leading investors in Brazil’s energy and logistics sectors, and are expected to actively bid in the planned privatization of state companies and the tender of infrastructure projects.

Bolsonaro has said he would visit China later this year and has extended an invitation to President Xi Jinping to participate in the BRICS summit in Brazil in November.

Given limited ideological agreement with Bolsonaro, Beijing will instead focus on a business-oriented agenda, according to Oliver Stuenkel, international relations professor at the Getulio Vargas Foundation, a business school and think tank, in Sao Paulo.

“The Chinese are looking at the long term and they are trying to establish a relationship that goes beyond this particular government," Stuenkel said. When Bolsonaro and Xi meet, “there aren’t going to be many hugs or smiles, but they are going to offer something real.”

Perhaps the biggest disagreement between both governments is over the Venezuelan crisis. While Bolsonaro wants incumbent President Nicolas Maduro out of office, China has emphasized its policy of non-interference.

“Rather than solving concrete problems, sanctions and foreign interference will only complicate the situation and cause serious impacts to the life of the Venezuelan people,” the ambassador wrote.

©2019 Bloomberg L.P.