May 21 (Bloomberg) -- Brazilian President Luiz Inacio Lula da Silva is taking more than 400 executives to China to help spur exports, seeking to pull South America's largest country out of its worst recession in 11 years.

Lula, 58, leaves for a six-day visit today to promote companies that sell soybeans, airplanes, sugar and other goods to the world's seventh-largest economy. China has become Brazil's fastest-growing export market, purchasing 80 percent more from Brazil last year than in 2002.

Increasing sales to China would help Lula stimulate economic growth as his approval ratings have dropped to a record low 35 percent and labor leaders are demanding he create jobs and lift wages. Lula, a former union leader who won election in 2002 on pledges he would revive growth and help the poor, says improved ties with China will boost trade 10-fold.

``The China trip is fundamental for Brazil and for Lula,'' said Carlos Geraldo Langoni, a former central bank president who serves as director of the World Economy Center at Getulio Vargas Foundation in Rio de Janeiro. ``Brazil needs to keep diversifying.''

Strategic Alliance

Lula's visit culminates a push that started last year to be Latin America's closest ally with China. The two countries formed part of a bloc that scuttled World Trade Organization talks in Cancun, Mexico, by demanding the U.S. and Europe drop agriculture trade barriers. In Beijing, Lula says he will lobby Chinese Premier Wen Jiabao for a stronger push against U.S. and European trade barriers.

The trip to China ``is of the greatest importance to our country,'' Lula said in televised remarks last night. ``Since last year, our government took the strategic decision to get ever closer to China.''

Lula said he was elected to change Brazil and appealed to the country to respect his decisions to rein in spending and make other sacrifices to help revive the economy.

``Nothing is easy,'' Lula said. ``I know that for a certain time, I run the risk of being misunderstood by my people. But if this is the price, I'll pay. I was elected to change Brazil -- this is my mission and I won't let it go.''

Growing Profits

Business with China helped Brazilian companies such as Rio- based Cia. Vale do Rio Doce, the world's largest iron ore company, and Aracruz Celulose SA, Latin America's largest wood pulp maker, increase profits last year when demand in Brazil slumped and the economy fell into recession. Vale more than doubled profits in 2003 and Aracruz Celulose increased net income by a third.

Brazilian farmers this season planted enough new soybean crops to cover an area the size of Israel to meet demand for food from China, creating a boom for White Plains, New York-based Bunge Ltd., the world's biggest oilseed processor.

Five commodities -- soybeans, iron ore, steel, soy oil and lumber -- accounted for 75 percent of Brazil's exports to China last year. China bought 6.2 percent of Brazil's $73 billion of exports last year, up from 1.4 percent in 1999.

``It's necessary to encourage more companies from different industries to sell their products to China,'' Jose Tadeu de Moraes, chief executive of Belo Horizonte, Brazil-based Samarco Mineracao SA, said in an interview in Sao Paulo. Samarco makes iron ore pellets, which are used to make steel.

Interest Rate Cuts

Lula is seeking to increase exports to boost growth after nine interest-rate cuts since June have yet to show evidence that economic growth is accelerating after contracting 0.2 percent last year. The government is scheduled to release first-quarter economic data next week. The government forecasts that gross domestic product for the $500 billion economy will grow 3.5 percent this year.

The nation's trade surplus ballooned to a record $24.8 billion last year from $13.1 billion in 2002.

``Exports are vital for our country,'' said Abilio Diniz, chairman of Cia. Brasileira de Distribuicao, Brazil's biggest retailer, at a press conference this week at the company's headquarters in Sao Paulo. ``The mission that we will have on China shows that the government is not kidding. It is doing its part by opening new markets. Now we have to do our part.''

After winning the October 2002 election with about 60 percent of the vote, Lula, a former factory lathe operator, curbed spending and advocated higher interest rates in a bid to slow inflation. The nation's stocks, bonds and currency, which had plunged ahead of his victory, rallied last year.

Falling Markets

This year, the markets have retreated -- Brazil's Bovespa stock index, is the world's worst performer among 60 benchmarks tracked by Bloomberg with a decline in dollar terms of 26 percent -- as Lula's Workers' Party lost support in congress amid allegations of corruption and economic growth stalled.

Labor leader Joao Carlos Goncalves, who's known Lula since the president entered national politics in the late 1970s by organizing auto unions against Brazil's military rulers, says he is disillusioned.

``I feel disappointed,'' said Goncalves, general secretary of Brazil's second-largest labor federation, the 16 million member Forca Sindical in Sao Paulo. ``There were a lot of promises to change the country's economic policies and this didn't happen.''

China Growth

In China, Lula will seek to reduce Brazil's dependence on commodities exports and find new markets for cars, appliances and other so-called value-added goods.

Setting up a profitable business in China isn't easy because demand from China's economy, which grew 9.1 percent last year, has driven up the price of raw materials, said Johni Richter, operations director at Whirlpool Corp. unit Empresa Brasileira de Compressores SA.

The company, known as Embraco, supplies a quarter of the world's refrigerator compressors, after investing about $25 million in a factory in Beijing with Chinese partner Beijing Snowflake Electric Appliance group.

Jose Dutra, chief executive of state-controlled oil producer Petroleo Brasileiro SA, plans to open an office in Beijing and sign a venture with China Petroleum & Chemical Corp., Asia's largest oil refinery, during Lula's visit.

Viacao Aerea Rio-Grandense SA, Latin America's biggest carrier, plans to announce direct flights to China from Brazil, while steelmaker Cia. Siderurgica do Para expects to sign an accord to supply $250 million of steel to China Minmetals Development Co., a state mining and trading company.

``China is a big market for Brazil,'' said Isac Zaguri, chief financial officer of wood and pulp maker Aracruz in an interview in Rio de Janeiro. Aracruz has more than doubled its sales to China in the past two years to 12 percent of the company's exports, Zaguri said.

To contact the reporter on this story: Michael Smith in Rio de Janeiro at mssmith2@bloomberg.net.

Last Updated: May 20, 2004 23:56 EDT