Economy

Por Andrea JubĂ© — Beijing


Apex proposed the recovery of pastureland in Brazil for planting — Foto: Silvia Zamboni/Valor

At an event in Beijing on Monday, the president of the Brazilian Trade and Investment Promotion Agency (Apex), Jorge Viana, mentioned private agreements involving large amounts of investment between Brazilians and Chinese, which will not be announced until President Luiz Inácio Lula da Silva’s visit to China, which has yet to be scheduled. When mentioning the cooperation between the two countries in a sustainable agricultural model, Mr. Viana proposed the recovery of pastureland in Brazil for planting.

Jorge Viana is coordinating the Brazil-China Economic Forum, which will be held by Apex in Beijing on Wednesday. He clarified that the disclosure of the private-sector agreements between Brazilian and Chinese businesspeople will only take place when President Lula makes the official visit to the country, after the postponement for health reasons. “The companies want to sign the agreements of historic dimension and volume of investments in the presence of the two presidents,” he said.

However, the former governor of Acre said that one of the agreements involves Suzano Papel e Celulose, a Brazilian giant in the production of eucalyptus pulp and world leader in the paper market, which inaugurated an innovation center in Shanghai this month to develop research on the transition to a low-carbon economy.

Mr. Viana added that Embraer is also expected to announce a major transaction with the Chinese, without specifying the amount of investment involved. He reiterated that the plane maker intends to invest in China again. “Not only sell, but also produce in China. Most companies only have commercial offices here. This is not much,” he said.

The president of Apex also mentioned that there are ongoing discussions with the Chinese about the solar and wind power market in the Northeast region. The Brazilian government expects the Chinese to invest in component factories, and not just for the assembly of solar panels. Regarding the negotiations for BYD, a Chinese electric car maker, to take over Ford’s plant in the Camaçari automotive complex, in Bahia, Mr. Viana said the parties are still “in talks.”

On the agenda of confronting climate change and the transition to a low-carbon economy, which was the topic of the event held Sunday in Beijing by the Brazilian Center for International Relations (Cebri), Mr. Viana said that it will be possible to recover more than half of the pastureland for agriculture.

The former senator, who was the rapporteur of the new Forest Code, recalled that 21% of the Amazon rainforest has been deforested in the last 50 years: an area equivalent to 84 million hectares. According to him, 67 million hectares were used for cattle ranching, 6 million for agriculture, and 15 million for secondary forests.

In light of these figures, he asserted that with pasture management technology and genetic improvement of animals, it would be possible to reduce these 67 million hectares of pasture to around 32 million hectares, with the remaining area being used for agriculture.

According to Mr. Viana, this is the way to a sustainable rural economy, in line with what China is currently pursuing by investing in climate insurance pilot projects, especially in the cultivation of low-carbon coffee and corn. At the same time, Chinese banks are expanding the issuance of climate bonds. There is a perception that Chinese farmers are aware of climate change, having faced successive periods of drought with the same drama as Brazilian producers.

“Imagine a great agreement between Brazil and China, between the country with the greatest biodiversity in the world and the country responsible for the greatest emission of pollutants, but which will soon have the largest carbon market in the world,” Mr. Viana said.

Speaking at the same Cebri event, NatĂĄlia Dias, Director of Capital Markets at the Brazilian Development Bank (BNDES), noted that the global transition to a low-carbon economy will require investments of $3.5 trillion per year.

For this, the United Nations Climate Agenda states that each country should invest 1% of its GDP for this purpose, but Ms. Dias pondered that Brazil sets aside only 0.1% of its GDP for this purpose. However, she pointed out that banks hold $350 trillion in assets. Given these figures, she believes it is necessary to strengthen the relationship between countries, through their respective development banks, so that they begin to support the right investment projects focused on sustainability and the low-carbon economy.

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