By - Apr 13, 2011 2:14 AM ET
A member of the event staff walks past a BRICS sign ahead of the summitt in Sanya, Hainan Province. Photographer: Qilai Shen/Bloomberg
Chinese Commerce Minister Chen Deming. Photographer: Tomohiro Ohsumi/Bloomberg
Leaders of Brazil, Russia, India and South Africa have found common cause at a meeting of the so- called BRICS grouping of developing countries in China: push their host to import more than just commodities such as oil, soybeans and iron ore.
Chinese Commerce Minister Chen Deming assured his counterparts in a closed-door meeting that China would make it a priority to import more value-added products from BRICS countries, Indian Trade Minister Anand Sharma told reporters at a beachside resort in Sanya, China. Oleg Fomichev, Russia’s deputy economic development minister, said China had pledged to set up high-technology projects with Russia, “not just importing our resources and exporting industrial goods.”
China, Russia, India, Brazil and South Africa, brought together under the Goldman Sachs Group Inc.-coined acronym, are divided by a host of trade disagreements. Brazil and India are pushing China to buy more value-added goods, such as Brazilian aircraft and Indian pharmaceuticals. South Africa wants more iron ore and other raw materials processed domestically before exporting them to China. Brazil and India have also complained that China’s yuan is undervalued, undermining their exports.
The countries “don’t have the same interests,” Jim O’Neill, chairman of Goldman Sachs Asset Management International, who coined the term BRIC in 2001, said in an April 6 interview. “The wealth per head is very different, the politics is very different, and the philosophy and their natural economic edge is different.” South Africa was invited to join the BRIC this year, giving the group its S.
Aircraft Deal
The five nations today agreed to push for Russia’s entry into the World Trade Organization and called for progress in the Doha Round of World Trade Organization trade talks. Chen told reporters that the BRICS nations “still face economic overheating issues such as inflationary pressure and asset bubbles.”
The difficulties faced by Brazil, Russia, India and South Africa, which joined the group this year, in increasing high- technology and manufactured exports to China was underscored this week by Brazilian aircraft-maker Embraer SA. (EMBR3) The company failed to get China’s government to approve final assembly of its E-190 aircraft in China because of concerns it would compete with a domestic regional jet, Chief Executive Officer Frederico Curado said yesterday in Beijing. Embraer will build business jets in China.
“We had the goal of building the 190 here but the Chinese government didn’t approve the project,” Curado said. The government was concerned that there wouldn’t be enough demand for both the E-190 and China’s rival ARJ21, he said.
Complaints from Brazilian unions and industry groups, including toymakers and textile producers, have led the Brazilian government to enact 29 anti-dumping measures aimed at Chinese-made goods, more than those against any other country and almost four times more than directed at the U.S., according to the Trade Ministry.
The measures aim to limit imports on goods the government believes are being sold below cost. Last week, Brazil approved higher levies on Chinese-made viscose textiles.
--Michael Forsythe in Sanya. With assistance from Andre Soliani in Beijing, Stephen Engle and Christine Hah in Sanya. Editors: Peter Hirschberg, Ben Richardson
To contact Bloomberg News staff on this story: Michael Forsythe in Beijing at +86-10-6649-7580 or mforsythe@bloomberg.net