MercoPress. South Atlantic News Agency

Brazilian industry creates a Chinese Studies Centre to monitor bilateral trade

In 2010 Brazil had a manufactured goods deficit with China of 25 billion USD

Brazil’s powerful Federation of Industries of Sao Paulo State (Fiesp) is set to create a Chinese Studies Centre in partnership with the federal government, the president of the federation said in Sao Paulo.

According to the Brazilian press, Paulo Skaf said that the centre would defend Brazil’s interests as a whole, and not just those of the Brazilian industrial sector.

The president of Fiesp said that Brazil had a trade surplus with China but noted that considering manufactured products alone in 2010 it had posted a deficit of 25 billion US dollars.

“For this year, the projected deficit with China is 40 billion USD in manufactured products and Brazil is expected to see a deficit of 100 billion USD in total imports of these types of products,” Skaf said at the end of a meeting of the Fiesp Higher Strategic Council.

By May, Fiesp plans to structure the Chinese Studies centre and establish where it will be located as well as to start hiring staff.

“We have to understand this China issue in depth. It is true that there are opportunities, risks and challenges, but discussions are not well-organised. The aim of the centre will be to bring together academics to establish a strategy for Brazil” he said.

Brazilian president Dilma Rousseff recently cautioned that the consumer spree in the country has meant that Brazilians are spending “millions in unneeded crap goods”, particularly during Christmas and Carnival, mostly “imported from Asia”.

“I have been told that 80% of all Carnival costumes and most bikinis, the allegedly famous bikinis in Rio’s beaches all come from Asia. This can’t be so, we need jobs for Brazilians”, said Ms Rousseff.

In related news Chinese car manufacturer Chery confirmed it will set up an assembly plant in the municipality of Jacareí.

The Chinese group’s representative in Brazil, Du Weiqiang, said that the State of Sao Paulo and the municipality of Jacareí has been chosen following several years of assessments, because they are located in the centre of the country’s biggest vehicle consumer market, with a complete network of parts suppliers and convenient logistics conditions.

The decision is part of the Chinese group’s strategy to sell 25,000 vehicles in Brazil this year. Chery has been in the Brazilian market since 2009 and has 40 representative showrooms that sell three models – Tiggo (sports utility vehicle), Cielo and Face.

Chery also has an assembly plant in Uruguay to supply the local market but mainly for exporting to Argentina. However the factory faces serious productivity problems with local labour plus Argentine hurdles to exports (non automatic licences system) which has led the Chinese company to seriously consider abandoning Uruguay.

The Chery assembly plant in Uruguay has a further difficulty: its main partner in the Uruguayan enterprise is the Macri group from Argentina. Since Mauricio Macri is mayor of Buenos Aires City and a serious presidential hopeful for next October’s election in Argentina, the administration of President Cristina Fernandez de Kirchner is combating him in all fields.