China's Opening Is Good and Brazil Must Be Careful, Says President Obama's Former Advisor

12/02/2016 - 12h04

The expansion of Chinese investment in the world and a potential commercial conflict between the U.S. and China during the Donald Trump administration might create opportunities for Latin America - especially Brazil.

However, Brazil should worry about managing and monitoring the Chinese drive so that it serves Brazilian interests as well.

That is the opinion of Evan Medeiros, who was an advisor to U.S. President Barack Obama for six years on Asian and Pacific issues up until June 2015 and is now a member of the Eurasia Group.

"The reasons that explain the Chinese investment in Latin America are more related to economics than politics, but there is always a political motivation," said Medeiros during the launching of a study on Chinese investment in Brazil, in São Paulo, on Wednesday, November 30.

What drives China's choices in the world is not purely of economic nature, said Fabiana D'Atri, an economist at Bradesco, during the same event.

D'Atri cited the recent purchases made by the Chinese in the entertainment sector, such as video games. "At the end of the day, what China wants is for us to understand WeChat [a Chinese message app] better than we understand WhatsApp."

Despite the valuable opportunity for the Latin American countries, Evan Medeiros suggests that political and business leaders in Brazil make an effort to define the Brazilian policies regarding China – including the government's position in the direct Chinese investment in the country.

Medeiros also says that there are laws and regulations on foreign investment related to national security issues in the U.S.

"The last thing you want is for the business community to wake up ten years from now and find that there are many foreign properties in key sectors and that control was lost because foreign companies systematically bought assets during a period of political and economic weakness."

Evan Ellis, a researcher and professor at the Institute for Strategic Studies of the U.S. Army War College, believes that, of all Latin American countries, the Chinese are absolutely sure that Brazil is where they must be and it is also where they have had the biggest problems - such as their interest in the high-speed train, whose plans have not left the drawing board yet.

Translated by THOMAS MUELLO

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