In another attempt to crack down on China's tech rise, the US has sent an explicit threat to Brazil, the largest economy in Latin America which traditionally is dubbed "America's backyard," warning that the nation could "face consequences" if it picks the world's largest telecom equipment maker Huawei for its 5G network rollout.

As Brazil is desperately looking for external support to shore up its sagging economy, it may bow to US pressure to a certain extent, analysts said. China's Foreign Ministry said on Thursday that China hopes every country could maintain a fair, just and open business environment and should resist discrimination based on country of origin just as they resist racial discrimination.

Observers also warned that the Latin America country needs to maintain policy independence from the US and find a balance in its relations with the world's two largest economies. Otherwise, Brazil's warming economic ties with China, highlighted by the soybean trade and expanding investments, will "fall below freezing point."

US Ambassador to Brazil Todd Chapman said in a newspaper interview that Brazil would not face reprisals for allowing Chinese tech firm Huawei to participate in local 5G networks, but it could face consequences, Reuters reported. 

"The consequences we are seeing in the world are that firms involved in intellectual property are scared to make investments in countries where that intellectual property is not protected," Chapman said, indicating that China fails to protect intellectual property. 

He added that the US will provide funding support from the US International Development Finance Corp to help support allies who buy telecom infrastructure form "trustworthy suppliers." 

In response, Wang Wenbin, spokesperson of the Chinese Foreign Ministry said at a press briefing on Thursday in Beijing that the US, on the one hand, claims to maintain democracy and freedom. But on the other hand, US politicians including Mike Pompeo are pointing fingers at 5G construction in other nations and pressuring them to yield to the will of the US side. 

Chinese observers described the message from the top US diplomat in Brazil as a traditional play of "carrot and stick" that aims to court Latin American economies in its reckless blockade against Chinese tech companies, which included Huawei.

"It is very hard for Brazil to resist US pressure, as the latter could provide it with much-needed capital support. Also, Washington could leverage the imposition of tariffs on Brazilian exports as a bargaining chip," Jiang Shixue, director of the Center for Latin American Studies at Shanghai University, told the Global Times on Thursday.

But if Brazil rolls out a complete ban on Huawei, the country's booming economic ties with the world's second-largest economy could face potential setbacks, Chinese observers warned, noting that Brazil's economy is heavily reliant on China. 

China is Brazil's main trading partner and largest source of foreign investment. China is also the largest market for Brazilian exports. In June, China's soybean imports from Brazil rose 91 percent year-on-year to 10.51 million tons, a record high, customs data showed. The number accounted for 94 percent of China's total soybean imports in June. 

Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, warned that excluding Huawei would inflate the cost of the network by at least 30 percent and delay Brazil's 5G rollout by at least two to three years.  

Local Brazilian telecom operators have built a significant part of their 4G infrastructure using Huawei equipment, according to media reports.

"This is like the difference between taking a plane and riding a bike. A wise person knows how to choose," Jiang said. 


Newspaper headline: Brazil’s economic ties with China to suffer if it bows to US pressure