China eyes huge economic, business gains in S. American nation


SAO PAULO (AP) ― Stocking shelves in a Chinese grocery store, Thiago warned that he didn’t want to be caught chatting during working hours. Within seconds, however, the Brazilian unleashed a pent-up flood of complaints about the owners, who lingered just beyond hearing distance.

“My bosses have never heard of a day off,” said the 20-year-old, who would only allow his first name to be used, for fear of losing his job. “Vacations? Forget it. They pay well and they pay for extra hours, but they don’t understand that some things are more important to Brazilians than money.

“I’ve seen many workers walk in, see the Chinese way of doing things, and quit the very same day.”

Such cross-cultural tensions have become a stumbling block in an otherwise meteoric rise in business ties between China and Brazil, two of the world’s fastest-growing economies.

Chinese companies’ direct investment in Brazil jumped to $17 billion last year, nearly 60 times the investment the previous year, according to SOBEET, a Brazilian economic think tank. At the same time, more Chinese companies are hiring local workers rather than following their old practices of bringing in Chinese laborers.

That new reality has meant frequent contact between two cultures that hold vastly different expectations about the role of workers, government regulations and unions.

Brazilians enjoy some of the most labor-friendly protections in the world, with guarantees such as one-month annual bonuses and stipends for meals and transportation.

China, on the other hand, has quickly become the world’s second-biggest economy on the strength of a low-paid work force and, in practice, virtually nonexistent labor protections, according to the U.S.-based nonprofit Global Institute for Labor & Human Rights. Brazil’s strong independent labor movement also clashes with a centralized Chinese system of company unions without collective bargaining power.

“You’re looking at a whole different model of how society operates,” said Charles Kernaghan, the institute’s director. “That means no rights to organize, virtually no labor protections.”

Chinese companies are attempting to export that model and, at least in Brazil, have been finding it difficult to retain workers, even in management positions.

A survey of 500 Brazilian executives working for Chinese, North American and European companies recently conducted by the Michael Page International recruitment firm for the newspaper Folha de S. Paulo found that 42 percent of Brazilian executives working for Chinese companies left their jobs within a year, a 68 percent higher turnover rate than found in the other firms studied.

Brazilian workers complain that their Chinese employers don’t understand the country’s culture of developing personal relationships among co-workers. Brazilians also bristle against a centralized office hierarchy that puts little trust in local executives.

“The cultural misunderstandings are going to frustrate the development of Chinese business in Brazil,” said Marcelo de Lucca, director of Michael Page’s Brazil operations. “Multinational companies, when they arrive in Brazil or any country, have to adapt to the local culture. But the Chinese, with their old culture, being a country ruled by a strong Communist party with extreme levels of hierarchy, for them this process will take longer.”

Global accounting firm KPMG, whose specialists help Chinese companies get started in Brazil, say about 30 of China’s big state-run companies with annual revenues above $1 billion are now in the country, more than three times the number five years ago.

China and Brazil’s bilateral trade surpassed $56 billion last year, up from $2.3 billion a decade earlier. In 2009, China replaced the U.S. as Brazil’s biggest trading partner.

Brazil isn’t China’s first foray into Latin America ― Chinese companies have a strong presence across the region, from mining operations in Argentina to manufacturing in Mexico. China has bilateral trade agreements with Peru, Costa Rica and Chile.

Zhang Jianhua, chief of the Bank of China’s operations in Sao Paulo, said Chinese companies have been enticed by Brazil’s wealth of iron ore, soy, oil and other natural resources, and many companies are finding it more cost-effective to move closer to the commodities. Chinese companies also see Brazil’s booming middle class as a lucrative market.

Chinese companies’ experience elsewhere in Latin America, however, hasn’t helped them avoid problems in Brazil.

A former top executive for Chinese computer maker Lenovo said most Brazilians at the company’s local offices were frustrated by demands to come up with almost immediate results in a country with some of the world’s worst red tape. Even seemingly mundane tasks, such as getting a phone line or renting an apartment, can require trips to the notary and stacks of paperwork.

Brazilian workers also balked at what they saw as their Chinese superiors’ suffocating management style, said the executive, speaking on condition of anonymity for fear of putting in jeopardy the jobs of other Brazilians at Lenovo.

“It was not the quantity of work ― we’re all chained to our Blackberry, working 24 hours a day, seven days a week,” she said. “But the Chinese bosses wanted people physically in the office 100 percent of the time so they could control them.

“That’s definitely not how deals are closed in Brazil. It’s over dinner, at lunch, having a drink. You cannot keep your work force locked up in an office and expect to make headway in Brazil.”

The executive added that Chinese bosses would often create ill will by upbraiding Brazilian project managers in front of their staff.

“They thought the workers would do more if the orders were coming from the big boss, but that’s not what Brazilian workers think ― it’s just the opposite,” she said. “They lost motivation because they thought their manager had no respect within the company, to the point that he was being dressed down in front of them. I saw that a lot.”