Apr 14, 2010
Apr 14, 2010
Brazil-China ties surge with trade and investment
Apr 14, 2010
Apr 14, 2010
April 13 (Reuters) - Chinese President Hu Jintao goes to Brazil on Wednesday 14 April for his first state visit to the country since 2004. China is now Brazil's top trade partner, after displacing the United States in 2009.
* China became Brazil's top trade partner in 2009, displacing the United States. Bilateral trade was worth $36 billion last year, tripling in value over the past five years. Brazil had a trade surplus with China of $4.3 billion last year, reversing deficits in the previous two years.
* Most of the trade flows are of commodities from Brazil to China, and manufactured goods from China to Brazil. About 98 percent of Chinese exports to Brazil are manufactured products, while minerals and soybeans make up two-thirds of Brazil's exports to China.
* China buys Brazilian iron ore, copper, soybeans and oil, among other raw goods. Brazilian imports from China include shoes, textiles and furniture.
* The number of Brazilian firms that bought more than $50 million worth of goods from China rose to 41 in 2009 from 12 in 2005, official data show. The overall number buying from China more than doubled to 16,853 in 2009 from about 7,158 in 2005.
RECENT MAJOR DEALS
* East China Mineral Exploration and Development Bureau (ECE) agreed in March to pay $1.2 billion for Brazilian iron ore miner Itaminas Comercio de Minerios. [ID:nN24176723]
* Four Chinese firms are involved in the bidding for a 40 percent stake in a Brazilian offshore oil field being sold by Norway's Statoil (STL.OL), a source with direct knowledge of the sale said last month. [ID:nTOE62I07L]
* China last May agreed to lend $10 billion to Brazil's Petrobras (PETR4.SA)(PBR.N) in return for guaranteed oil supply over the next decade.
* Brazilian aircraft maker Embraer (EMBR3.SA)(ERJ.N) in December signed a $2.2 billion deal with a unit of state-owned China Development Bank (CDB) to fund the sale of regional jets in Asia. Embraer has a factory in the northeastern Chinese city of Harbin.
* The two countries officially established diplomatic relations in 1974, but the relationship gained steam in the 1980s under China's "reform and opening up" policy and after Brazil's military dictatorship was replaced by democracy.
* Both countries are important emerging powers who want developing nations to have a larger say in world affairs.
* China, as the world's third-largest economy, has a close if sometimes fractious relationship with the United States, and a permanent United Nations security council seat. Brazil, on the other hand, has to push harder for a place at the international table and a role beyond Latin America.
* Both are pushing for reform and a greater say for developing countries in global financial institutions like the World Bank and the International Monetary Fund, particularly after the global financial crisis.
* Lack of language skills and academic expertise, on both sides though more pronounced in Brazil, exacerbate a cultural gap between Communist-ruled China and democratic Brazil.
* Brazilian politicians and businesses share U.S. concerns that Chinese exports made more competitive by the cheap yuan currency are undermining local industries.
* Brazil would like Chinese support for its bid to get a permanent seat on the U.N. Security Council.
* China would like Brazil to be more aggressive in opening up its economy to foreign investment, a process that China's government feels is progressing too slowly. (Sources: FIESP Sao Paulo business federation, Xinhua) (Editing by Kieran Murray)
© Thomson Reuters 2023 All rights reserved.