We see no reason for Brazil to refuse a Chinese semiconductor factory, says Amorim – 03/24/2023 – Market

President Luiz Inácio Lula da Silva’s main adviser on foreign policy, the special adviser to the Presidency Celso Amorim claims that Brazil does not see the world divided between China and the United States and has no prior vetoes to business with the Chinese, not even in the sensitive sector of semiconductors, one of the foci of the growing tension between Beijing and Washington.

“We have no preference for a Chinese semiconductor factory. But if they (the Chinese) offer good conditions, I don’t see why we refuse. We are not afraid of the big bad wolf,” said the ambassador.

“If they (USA) want, they can propose bigger and better conditions and that’s it, and we will choose theirs”, continued Amorim on Wednesday, days before his scheduled departure with the Brazilian entourage towards Beijing and Shanghai.

The trip takes place less than two months after Lula met with Joe Biden in Washington, in a move by the new government to relaunch its main trade relations.

In this movement, it is up to the former chancellor of the Lula administrations to face the challenge of calibrating Brazil’s traditional pro-multipolarity position in the midst of growing frictions between the main powers of the globe —while Brazil tries to attract investments in cutting-edge technology that both countries dominate.

In the speech of Lula’s adviser, the interest is in who offers more and better – even with the US government’s veiled messages to the world that those who associate themselves with the production of Chinese microelectronics may have problems in the US market.

“I don’t care about errands,” said the ambassador.

“We do not share any idea, neither on one side nor on the other. Neither the idea of ​​international communism, nor the war of democracies against autocracies,” he said. “We don’t see the world so divided.”

Amorim said that Brazil “has very clear values” and is grateful for the support received from the US government for democracy in Brazil.

“The validation of the democratic process was threatened by the previous president,” said Amorim, referring to Washington’s quick recognition of the Brazilian election result and condemnation of the attacks in Brasilia on January 8.

“Now I can’t condition where I’m going to buy a chip, or something else, to these values. In fact, the chip is not impregnated with these values, it is value free”, he pondered.

In an interview with Reuters, Celso Amorim stressed that Brazil does not want to get involved in the dispute. “Look, if we can contribute, great. I think that if we contribute a little for a distension, better, but that is not the objective. We are not going there for that”, he said.

One of the points of the president’s visit to China may even bother Americans more than a possible negotiation around semiconductors.

Lula should visit the factory of Huawei Technologies, a Chinese telecommunications giant that has been operating in Brazil for 20 years, at the invitation of the company’s directors.

Supplier of much of the 4G and 5G technology in Brazil, Huawei had the approval of new technologies suspended by the US government, which classified the company’s performance as a high risk for national security.

Under pressure from the then-government of Donald Trump, then-president Jair Bolsonaro even considered banning the Chinese company’s performance in Brazilian 5G, but gave in to telecommunications companies that claimed the cost was too high to assemble the structure without the Chinese.

Celso Amorim also mentions Brazil’s interest in expanding cooperation with China in areas such as the green economy (the countries are negotiating a bilateral green investment fund), digital economy, satellites —an agreement must be signed for the production of Sino-Brazilian equipment CBERS6—communications and microelectronics.

According to information from the Brazilian government, up to 30 agreements of different types are being negotiated. Topics such as climate change, market opening for new poultry and pork meat plants, cooperation in science and technology, not to mention agreements between private companies or with states, are also included.

On the horizon are the announcement of the purchase of the former Ford factory in Bahia by the Chinese automaker BYD and the resumption by Chinese contractors of the work on a bridge between Salvador and Itaparica.

“It’s not just a government relationship, it’s a relationship with economic agents and that goes through agribusiness, industry, Embraer, the most varied sectors”, says Amorim.