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Fruitful Trip

Wed, 17th Sep 2014
China, Brazil sign agreements worth US$ 11 billion during President Xi’s visit. (September 2014)

During the visit by China’s President Xi Jinping to Brazil in July, the two countries signed agreements worth US$ 11 billion, a sign of their thriving economic relationship.

Xi went to Brazil on 15 and 16 July, to meet national leaders and attend a BRIC summit held there. It was the first stop of a four-nation tour that also took him to Venezuela, Cuba and Argentina.

“My trip to Brazil was intended to boost strategies to create a more prosperous future for the two nations,” he said. He added that his meeting with his Brazilian counterpart had been “in-depth and fruitful” for “continued and stable growth of two-way trade”, which was one of the main subjects discussed by the two countries.

“Cooperation is at the centre of our relationship and we plan to increase exchanges further as a way of extending our mutual knowledge,” he said.

Trade between Brazil and China rose sharply from US$ 3.2 billion in 2002 to US$ 83.3 billion in 2013. China is now Brazil’s largest trading partner, with iron ore, soy and oil being the biggest Brazilian exports.

Many agreements

On 17 July in Brasilia, the governments of Brazil and China signed 32 cooperation agreements on infrastructure, mining, trade, science and technology, defence, energy, education, civil aviation and finance.

One agreement was for the sale of 40 Embraer aircraft - E-190 and 190-E2 models - to Tianjin Airlines and the Industrial Bank of China and 20 aircraft - E-190 - to the Industrial and Commercial Bank of China (ICBC Leasing) in a deal worth US$ 3.2 billion.

China’s Eximbank provided a three-year credit line of US$ 5 billion for Brazilian mining company Vale to buy ships and equipment from Chinese companies, and the Bank of China opened up a credit line of US$ 2.5 billion for Vale to buy Chinese equipment and services.

The Construction Bank of China completed the acquisition of 72 percent of Brazilian bank Banco Industrial e Comercial S.A. for 1.62 billion reals, agreed in October 2013.

State Grid Corporation of China signed an agreement with Brazilian power company Eletrobras to build high voltage transmission lines for the Belo Monte hydroelectric facility. China Three Gorges Corporation signed an agreement with Brazilian state companies to take part in a dam-building project on the Tapajós River, which crosses the Amazon basin. 

The agreements also included the simplification of applications for business visas for foreigners, valid for three years, 90-day stays and 90-day extensions. Cooperation on railway projects is under consideration.

In the defence sector, the two countries signed a partnership agreement to use remote control technology for the Amazonia Protection System. Other areas of cooperation included infrastructure, partnerships between universities from both countries and increasing the number of internships offered to students from the Science without Borders exchange programme.

Chinese company Build Your Dreams (BYD), the world’s largest manufacturer of electric buses and iron phosphate batteries, announced plans to build a factory in Campinas, Brazil, by 2015 to manufacture buses not only for the Brazil market but also all of South America.

Presidents meet

The agreements were signed after a meeting between Xi Jinping and Brazil’s president, Dilma Rousseff, after the Chinese head of state had been received with military honours and a parade of the Brazilian cavalry, to the sound of the national anthems of both countries.

After the signings, Dilma Rousseff said: “The balance of business between Brazil and China could not be more positive and the future could not be more promising. Our relations, which make up a truly strategic relationship, are developing at an unprecedented rate with many areas of cooperation.“

“We also reiterate the importance of the financial relations that naturally result from growing economic interaction between the countries and we note that, in an adverse international context, with a persistent financial crisis, Brazil and China have shown themselves capable of maintaining and extending their economic growth policies,” she said.

On the sidelines of the signing, Brazil’s Agriculture Ministry announced that China had suspended its embargo on beef from Brazil, a measure put in place in December 2012 following a case of bovine spongiform encephalopathy (BSE) in Brazil’s Paraná state.

In 2015, the Brazilian government expects to sell US$ 1 billion of beef, especially to Hong Kong, the biggest importer of meat from Brazil.

BRICS want change

The Brazilian president also said that Brazil and China both called for changes to international financial institutions and policies. It was a clear reference to the 6th BRICS summit (Brazil, Russia, India, China and South Africa), which announced the creation of a bank, the New Development Bank. It will be based in Shanghai and have a starting capital of US$ 50 billion and is intended to fund infrastructure projects in emerging economies.

“Our countries have an important role to play in the necessary and urgent process of reforming international financial institutions and policies,” said Rousseff.

She added that she had also discussed with Xi bilateral issues and international matters, including conflicts in the Middle East, particularly in the Gaza Strip, and cyber security.

Presidents highlight strategic partnership

At a lunch at the Foreign Affairs Ministry in Brasilia, after the agreements were signed, President Rousseff noted the 40 years of diplomatic relations between the two countries and the advances made in the strategic partnership between Beijing and Brasilia.

In his speech, President Xi said: “Despite the geographical distance, we are closely linked by a deep traditional friendship. We have a deep mutual political trust. I am convinced that, with our joint efforts, the tree of friendship will bear many flowers and much fruit.”

Xi also took part in the 6th BRICS summit, which involved meetings in Fortaleza and Brasilia with the presidents of South Africa, Brazil, China, India and Russia and presidents of 11 South American countries.

Brazil-China partnership fine example of South-South cooperation

During his visit to the Brazilian Congress, Xi said the partnership between Brazil and China was a great example of South-South cooperation.

“Today the relationship between our two countries is no longer just a two-way relationship as we are at a higher level,” he said. 

He said that relations had grown significantly in the last 40 years and called for Brazil and China to increase their role in the international community.

“Relations between China and Brazil (…) have moved beyond merely being two-way and increasingly have a global projection. In the last five years, China has been Brazil’s largest trading partner and Brazil is the biggest trading partner and most important destination for Chinese investment in Latin America and the Caribbean.

“We should make use of the 40th anniversary of our diplomatic relations as a new starting point to (…) advance our Global Strategic Partnership to a higher and more comprehensive level,” he said. 

 

By José Ricardo in Brasília

Photos by Xinhua News Agency

(Issue N. 24, September 2014)