by Michael O'Neill
October 11th, 2012

Since Goldman Sachs introduced ”BRIC” into the global lexicon in 2001, economists everywhere have eagerly pawed over the social, industrial and commercial development of the four nations: Brazil, Russia, India and China. Some have even gone so far as to coin acronyms of their own, paying tribute to the burgeoning success of less lauded markets such as South Korea (BRICK), Mexico (BRIMC) and South Africa (BRICS).

Whilst the temptation to create increasingly cumbersome permutations of the BRIC nations acronym seems ever present, the more diligent commentators refuse to move on quite so fast. And with good reason.

The relationship that BRIC nations have with the US and Europe has long been the focus of attention. Only in the past year or so has their relationship with each other been given the attention it has long deserved.

Since then-President Luiz Inácio Lula da Silva made the Sino-Brazilian relationship a key priority of his term in 2004, trade between China and Brazil has grown exponentially. In the eight short years since that commitment, China has now surpassed the US as Brazil’s primary commercial partner.

But the journey from high potential markets to maturing commercial partners has not been without its issues. For much of that time, popular opinion had it that high-volume raw material Brazilian exports would be countered by an influx of low-cost and low-quality Chinese goods. That view was only exacerbated by the challenges faced by Brazilian manufacturers at the time.

Only now, after a period of sustained trade growth – and varying levels of government intervention that sought to counter the flow of imported goods – has the relationship between Brazil and China warmed. In fact it is stronger today than ever before.

Nor is it likely that, as a major source of commodities, Chinese interest in Brazil will wane at any point soon. With a burgeoning manufacturing sector supplying an equally robust emerging middle class in China, the relationship between the two countries is more than complementary. Some argue that they have become co-dependent. And there is an increasing number of business executives who would agree: Aerospace conglomerate, Embraer, auto manufacturer Marcopolo and processed foods company Brasil Foods (BRF) have already created profitable niches in the China market.

Elsewhere, pharmaceutical companies, construction conglomerates and creative businesses are lining up to explore the increasingly open and compelling market dynamic that exists between the two countries. The telco sector is particularly buoyant, with Chinese technology playing an increasingly significant role in the development of Brazil’s third generation mobile (3G) network.

But for all the positive sentiment between Brazilian and Chinese companies, the acceleration of business opportunity at this scale does not come without its challenges. Central to those challenges are the cultural issues of meaningful interaction. Effective engagement is, after all, at the heart of every business deal.

The fact is that Chinese and Brazilian cultures are born of distinctly different lineage. Where one is robust in its interaction, the other is often driven by a deep-seated protocol; and where one is relishing its new-found place in the global supply-chain, the other has entrenched itself as a stalwart of global economic stability.

That means that for all the shared political consensus on the benefits of market interaction, when it comes to managing the very fragile nuances of negotiation around the business table, the smart companies are putting cultural and communication refinement at the top of their agenda.

The development of commercial opportunity between Chinese and Brazilian companies in the past five years has been dramatic. Few industries have not recognised the potential inherent within it. But like any new relationship, trust is hard won and easily lost. Which means that the companies that will come out on top are those that accept market diversity, understand cultural nuances and know that an engagement strategy is likely to take a very different direction to what might be expected on home soil.

Claudia Pires is director, Sao Paulo, at S2Publicom Weber Shandwick

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