China tries to win over Brazilian consumers

September 2, 2011

SAO PAULO, Brazil — Here in Latin America’s economic giant, the prevailing image of China has been that of an unquenchable consumer and the manufacturer of all things cheap.

But the opening of 55 glitzy JAC Motors dealerships in Brazil, all selling sleekly designed cars built in China, has helped Chinese officials and businessmen present a different image of their country, as modern and dynamic.

These days, JAC’s hatchbacks and sedans, which start at $24,000 and come with a six-year warranty, are outselling some better-known models in the continent’s biggest car market.

“The Brazilian image of Chinese products – it’s changing very fast,” said Sergio Habib, 52, a Brazilian businessman who has imported Jaguars and Aston Martins and now runs the JAC dealerships. “We are helping that with JAC cars.”

All over the world, China is using its powers of persuasion — through its products, its potent economy, an increasingly sophisticated diplomatic service and the appeal of its culture — to win over consumers and make it easier for Chinese companies to enter vital markets and secure raw materials.

Analysts call it soft power, and it is wielded differently in Asia, where China is trying to placate neighbors jittery about its military, than in the United States, where concerns often center on Chinese authoritarianism and unfair trade practices.

Unlike in the United States or many European countries, most people here hold a favorable view of China, according to a Pew Research Center report issued last year on Brazilian attitudes.

“A place like Brazil, or definitely other countries in Latin America, where the history of China is not so long, you have more opportunities to make a good impression,” said Joshua Kurlantzick, author of “Charm Offensive: How China’s Soft Power Is Transforming the World.”

Still, China is increasingly facing challenges as its stake in Brazil grows. Brazilian businessmen have raised concerns about China’s undervalued currency and the financing edge available to Chinese industry, which is moving to establish factories here that will cut into market share.

Chinese officials in Brazil note that the stakes are high for their country, which surpassed the United States in 2009 to become Brazil’s biggest trading partner. Chinese exports to Brazil reached nearly $26 billion last year, 19 times what China exported to this country a decade ago. China sees potential for more growth in Brazil, whose expanding middle class has reached 95 million, many of them armed with cheap credit.

In an interview, Zhu Qingqiao, the business adviser in the Chinese Embassy in Brasilia, described Brazil as a partner and detailed how China imports a wide range of Brazilian products, from soybeans to fruit to airplanes. He also spoke of Brazil’s offshore oil fields and its vast agricultural heartland, both vital to China’s fast-growing economy.

“The economies of the two countries complement each other,” Zhu said. “There is a great potential for cooperation.”

Global players

Since a 2001 Goldman Sachs report on rising economic powers grouped Brazil and China together, along with Russia and India, leaders in Beijing and Brasilia have gone to great lengths to highlight similarities between their countries.

Both countries are continent-sized, and both have rising international clout on issues such as food security, nuclear disarmament and trade negotiations. China surpassed Japan to become the No. 2 economy last year; Brazil hopscotched Italy to become No. 7. Washington covets good relations with both.

Yet, this is also the land of samba and world-class soccer, a country built by European immigrants and African slaves. It is also an established democracy, the world’s fourth-largest. For some Chinese here, the meeting of their two cultures has been more like a collision.

Shu Jianping, cultural attache in the Chinese Embassy, recalled how Chinese businessmen, for instance, were initially put off that their Brazilian counterparts showed up late for meetings and dinners.

“If you say 7 p.m., it’s 7 p.m.,” Shu said, shaking his head.

“The mentality of the two people is very, very different,” he said. “Many times, the commercial conflict is a reflection of a cultural conflict. It is because of a lack of knowledge.”

Shu said that Chinese businessmen and officials are working hard to learn about Brazil, with a strong focus on learning Portuguese. Shu, for instance, represents the new class of Chinese diplomats; he speaks fluent Portuguese and Spanish, and has Latinized his name to Antonio.

But Marina Schwartzman, who advises Brazilian companies that do business with the Chinese, said that not only do Brazilian businessmen know little about China but also “sometimes they don’t even know where China is on the map.”

She says there are few businessmen like João Pedro Flecha de Lima, who reads Portuguese translations of Chinese literature, studies the culture and travels frequently to China. He directs operations in Brazil for Huawei, the Chinese telecom giant, which has seen revenues here grow 20 to 30 percent a year during the past decade.

“They are starting to get China, but still at a very preliminary level,” Flecha de Lima said of Brazilian businessmen. “Very few get to go there and visit the country, to spend time to understand the culture, the tradition, the history, the business practices.”

An eclectic mix

Here in Sao Paulo, Brazil’s industrial heart, an eclectic mix involving Chinese diplomacy and Chinese assistance is trying to create a positive impression. It includes the government-sponsored Confucius Institute, which offers Mandarin classes and organizes outreach efforts; trade groups made up of Chinese-born entrepreneurs and neighborhood organizations with ties to the Chinese state. Chinese officials say it helps that Sao Paulo has a sizable Chinese community, estimated at 200,000.

The city is fertile ground for China boosters such as Juliana Wu, principal at the Sao Bento School, a tradition-bound Catholic school in the city center that receives assistance from the Chinese government.

Wu, who recently arrived from China, oversees Mandarin classes not just for Chinese immigrants but also for Brazilian children.

“They want their children to be prepared for the future,” Wu said. “The ones who can speak Chinese and also Portuguese and English, they can get a good job.”

Roberto Blatt, 50, an engineer and consultant, is the kind of Brazilian the Chinese want to reach. Eager to do business in China, Blatt has taken language classes at the Confucius Institute and recently traveled to China for more intensive training.

“I think they want us to know they are not so different from us,” he said about Chinese soft power in Brazil. “And I guess they want us to know their products are good, that’s the main thing.”

Lately, perhaps no Chinese product has gotten as much attention as the cars offered by JAC Motors. Full-page newspaper ads hawk the fast-selling J3 hatchback. A TV personality known to all Brazilians, Fausto Silva, pitches the cars on his popular variety show.

On a recent day at a JAC dealership here, Manuela Martins, a physical education teacher, said she considered other models but was sold on the hatchback, after seeing the car and hearing about the six-year warranty.

“I could see it was a quality product,” she said. “It was love at first sight.”

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