The world has its eyes set on Brazil’s new president-elect, Jair Bolsonaro, due to its controversial political campaign and policies. There are a lot of economists that support his political stances, transforming state-owned companies into private companies and approaching large liberal economies such as the United States.
The main objective of the President-elect’s Government is to follow its neighbor’s step on the so-called commercial opening. Chile, for example, is a great example for Bolsonaro’s foreign trade plan for Brazil, since it has the ability to market with the whole world. As said by him, his goal is to create a liberal bloc in Latin America, aligning itself with countries like Paraguay, Argentina and Chile. Thus, Paulo Guedes, the Economic Advisor for President-elect confirmed that the priority of the new government is not Mercosur.
Many experts cast doubt on the Government’s ability to meet this goal, because of the low Brazilian share in the international flow of goods and services. Bolsonaro’s plan with this positioning is to win new buyers for Brazilian products and new suppliers of technology and raw materials. The most popular dispute of this economic plan is that it can also close doors to its largest trading partner: China, which already has more business with Brazil than with the US and has made several investments in that country.
As said by Foreign Trade Professor of Facas Damas, Bianor Teodósio, “Guedes sees China as a threat, not as an opportunity”, because of his liberal position, both Guedes and other members of the Bolsonaro Government tax China as Communists, and fear that these Chinese investments, which contributions exceeded US $ 124 billion in the last 15 years, will take away national sovereignty.
Experts like Prof. Teodósio believes that “it would be crazy to leave China aside. “This concerns economists because it can interfere prospects for new investments such as Port of Suape’s and Pernambuco’s, to which the delegation of Chinese province of Sichuan expects to generate business in the agricultural sector and partnerships for education, research and training of human resources in the region.
“We are coming out of a crisis. So, we cannot face a fight with a country like China that has invested here. This expectation is very damaging to Pernambuco and Suape,” he continues, “Faced with this rapprochement with Trump, who plays very hard with his allies, a peculiar relationship with China is indeed created. We need to wait to see how Brazil will position itself in relation to the US-China trade war.” said Teodósio.
China, however, sent a message to Bolsonaro through the China State Newsaper, warning that a move away from the Chinese market may negatively affect the Brazilian economy. The article admits that there are doubts about the future of the relationship between the two countries and states that this is a “pertinent issue” because “Bolsonaro is portrayed by some as a ‘Tropical Trump’.”
China has been Brazil’s biggest trading partner and has bought almost twice as much, as the United States has imported from Brazil in 2017. Experts worry that moving away from the Chinese market may negatively affect the Brazilian economy and bring it to recession; his plan will determine the future of Brazil’s economy.
