Brazil Taps a 36-Year-Old Mandarin Speaker to Boost China Trade

(Bloomberg) --

A 36-year-old, Mandarin-speaking trade specialist is Brazil’s newest bet to boost food exports to China just as the Latin American country fights with the U.S. for a bigger share of the world’s largest commodities market.

Larissa Wachholz, who holds a masters degree from the Renmin University of China, was tapped in December by the Brazilian agriculture ministry to lead a trade unit dedicated to the Asian country, the first of its kind in Brazil. Her mission is to diversify Brazilian exports to its top trading partner beyond soybeans and beef, as part of a strategy to smooth out the ups and downs in trade flows between the countries.

In her first interview in the new position, Wachholz said Brazil lacks knowledge about China even as both countries trade over $100 billion in goods per year and are members of the BRICS group. “We need to learn how to deal better with this partner.”

Brazil’s push comes at a time when Chinese demand may falter as the Asian country battles the outbreak of a deadly coronavirus. It also takes place just as the U.S. is poised to displace some Brazilian exports of soybeans after signing a trade deal with China.

Wachholz said the deal between Washington and Beijing is a “matter of concern” but that Brazil is considering scenarios before reacting. “We are trying to understand the scope of the agreement and what could possibly change from now on.”

Sales of Brazilian soybeans to China, which had expanded since President Donald Trump imposed tariffs on Beijing two years ago, are expected to return to pre-trade war levels. Exports of Brazilian beef are also seesawing. They soared more than 50% in 2019, driving meat prices as well as Brazil’s inflation up late last year, as China struggled to satisfy domestic demand for protein after the spread of African swine fever decimated its hog population. Yet the Chinese are now seeking to renegotiate existing contracts as the surge in prices curbed demand there too.

“We knew it was a temporary gain, we never thought it would be a perennial situation,” Wachholz said. “The solution will be to redistribute this surplus to other partners.”

Read More: Demand for U.S. Soybean to Improve on China’s Pork-Import Pledge

Change of Tack

The creation of an unprecedented trade unit dedicated to a single country underscores a crucial change of strategy by President Jair Bolsonaro. While campaigning, he called the Chinese “heartless” and, even after taking office, said they were predators who wish not only to invest in Brazil but own it. Ties have since warmed up as China continued to devour an ever growing portion of Brazilian exports -- currently about 40% of them.

Since taking office in early 2019, Bolsonaro twice met his Chinese counterpart Xi Jinping and, despite cozy ties with Trump, has so far refused to bow to U.S. demands to ban Huawei Technologies Co from bidding in a future auction to implement 5G technology in Brazil.

China’s vast appetite for commodities helped drive up total trade with Brazil to about $100 billion in 2018. Chinese companies also invest heavily in Brazil, which is seeking foreign investors to participate in its privatization program to accelerate economic growth.

In order to reduce its exposure to changes in demand for a small number of products, Brazil intends to open new markets in China, Wachholz said, adding that boosting fruit exports are a priority. Just last week Brazil obtained a green light to sell melons to the Asian country, which consumes half of the world’s production of the fruit. Brazil would double the volume of melons it exports globally just by securing 1% of the Chinese market, she said. Grapes and pecans are also being considered, she added.

On the other hand, additional Chinese investment in Brazil’s infrastructure would help consolidate Beijing’s interests in the country, Wachholz said.

“China values long-term planning,” she said.

--With assistance from Fabiana Batista and Tatiana Freitas.

To contact the reporters on this story: Samy Adghirni in Brasilia Newsroom at sadghirni@bloomberg.net;Simone Iglesias in Brasília at spiglesias@bloomberg.net

To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, Walter Brandimarte

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