Experts say new fund shows both countries' determination for capacity cooperation
China's Ministry of Commerce (MOFCOM) stated it would strictly comply with the country's relative laws as well as WTO rules in its probe on sugar imports, launched on September 22. Any excessive worries and speculation toward the case is unnecessary, MOFCOM spokesperson Shen Danyang told the Global Times on Tuesday at a briefing in Beijing.
Shen's comments followed Brazilian media reports stating that China's probe into sugar imports placed a heavy burden on Brazil and that there were worries that the results would hit the Brazilian sugar industry as well as cause negative effects to the economic and trade relationship between the two countries.
"The ministry launched the probe following complaints from the domestic sugar industry," Shen said. "China will be in strict accordance with its laws and WTO rules" and "any interested parties involved, including Brazil, can raise their concerns and demands during the investigation, which will be treated impartially," he noted.
The Chinese government did not specify which countries it would target in the probe, according to a statement posted on the MOFCOM website on September 22.
Although the Brazilian media speculation is unnecessary, their concerns are understandable because Brazil is one of the world's largest sugar producers and China is the world's top buyer, Sang Baichuan, director of the Institute of International Business at the University of International Business and Economics (UIBE) in Beijing, told the Global Times on Tuesday.
According to media reports, Brazil is China's largest sugar import source. From 2011 to 2014, China's annual sugar imports from the South American country accounted for more than 50 percent of its total imports.
"The domestic sugar sector has seen quite low profits and has been hit heavy by sugar imports in recent years; given such context, the probe launched by the government is in line with the world body's trade remedy measures and would play a vital role in ensuring relative industries' interests and farmers' earnings," Sang said.
Capacity cooperation
"What needs to be stressed is that the economic and trade cooperation between China and Brazil is sound, and we can expect that the bilateral cooperation will continue," Shen told the Global Times.
At the end of August, China was the largest market of Brazilian exports and second largest source of imports, with the bilateral goods trade volume reaching $41.1 billion in the first eight months, according to MOFCOM.
On October 11, the Brazilian government announced it had signed an agreement with China to set up a $20 billion cooperation fund to expand ties in energy, agriculture and digital services, among other areas, according to the Xinhua News Agency.
The memorandum of understanding was signed in Macao during the Fifth Ministerial Conference of the Forum for Economic and Trade Cooperation between China and Portuguese-speaking Countries, which was held from October 11 to 12.
The Brazil-China Cooperation Fund - to be financed with $15 billion from China and $5 billion from Brazil - "will finance priority projects in infrastructure and can facilitate cooperation in industrial capacity between the two countries," the Xinhua report said, citing the Brazilian government.
The large-scale fund of $20 billion shows both countries' determination to beef up capacity cooperation, Chen Fengying, a research fellow at the China Institutes of Contemporary International Relations, told the Global Times Tuesday.
"China and Brazil have seen rapid growth in capacity cooperation in recent years. Many Chinese firms are investing in Brazil and helping the country's manufacturing industry grow. Meanwhile, Brazil is stepping up efforts in bringing in advanced capacity to sectors, such as equipment manufacturing, information technology and new-energy development," said Sang, the expert with UIBE.
Brazil needs capacity cooperation with China as the country faces challenges during its industrialization development, Sang said, noting that Brazil's technology level is relatively low.
Sang also highlighted that "in order to expand capacity cooperation with Brazil, China will be expected to be in line with the demands of Brazil's economic and social development."
"But some potential risks should not be neglected," Chen noted. "As Brazil is going through a period of economic transition and while some political instability still remains, Chinese enterprises should be cautious whether they can get their money back after investing in the country."
