During the negotiations in Brasília last week with Chen Deming, China’s commerce minister, Brazil’s government gave Beijing a list of 10 processed goods it wants to start exporting in quantity, such as frozen chicken wings and soya bean oil.

The move is the first stage in a plan to sell more value-added goods to Asia.
“The relationship with China is so unbalanced, not in terms of value but in terms of what we trade,” one official close to the trade negotiations said. “The Chinese acknowledged this and said they will make an effort to change this.”

Iron ore, soya beans and petroleum account for about 80 per cent of Brazil’s exports to China, partly because more heavily processed goods are restricted by higher tariffs. Brazil claims tariffs on soyabean oil are nine times higher than the charge on raw soya beans. Meanwhile, China mainly sends back cheap manufactured components such as television and air conditioning parts.

Economists have warned that if Brazil cannot soon start exporting more processed goods, it is in danger of falling victim to “Dutch disease”, whereby commodity-driven currency appreciation crushes local manufacturing.

Speaking to reporters last Monday, Mr Chen said that China welcomed more diversified exports from Brazil. “We hope that good Brazilian products can be introduced into the Chinese market,” he said, adding that it was ultimately up to the Chinese consumer to decide.

Brazil also called on China to promote the sale of Brazilian luxury shoes and jewelry in its domestic market. “We cannot compete with China on prices; that’s not the point,” the Brazilian official said, adding that the government believed it could challenge countries such as Italy in China’s luxury shoe shops. Brazil’s new president Dilma Rousseff, Brazil’s new president, last month made one of her first overseas trips to China in a bid to diversify trade.

As the Brazilian currency has soared almost 50 per cent against the dollar since the end of 2008, putting pressure on local manufacturers,. Brazil’s government has also taken more measures to slow various imports.

Earlier this month, Brazil said it would delay granting licenses to imported vehicles in an attempt to reduce the number of cars coming from abroad, causing outrage in Argentina, the biggest vehicle exporter to the country.

Brazil is looking at introducing similar measures on other products, the government official said, as the country tries to buy itself time while it evaluates the problems facing individual sectors.

Brasília has launched anti-dumping investigations and imposed limits on imports of some Chinese goods to protect domestic industry but officials will be wary of imposing too many trade restrictions out of fear of retaliation from China.

In neighbouring Argentina, new tariffs introduced last year on cheap Chinese imports in order to protect local industry were met by retaliatory action from Beijing, which effectively banned imports of soybean products from Argentina in response.