Brazil and China have signed $27-billion worth of trade and investment deals, officials from both counties said on Tuesday.
The deals were signed during Chinese Premier Li Keqiang’s meeting with Brazilian President Dilma Rousseff in the capital Brasilia.
China, which is Brazil’s biggest trading partner, is seeking to boost investment to the tune of tens of billions of dollars not only in fellow BRICS nations – it inked similar agreements in India and Russia – but in other Latin American countries as well.
Li and Rousseff announced that the Industrial and Commercial Bank of China Ltd (ICBC), the world’s largest bank by assets, will set up a $50 billion fund with Caixa Econômica Federal, Brazil’s largest mortgage lender, to invest in Brazilian infrastructure projects.
On Tuesday, Brazilian energy officials said that Li and Rousseff also signed a $7-billion finance agreement for the state-owned Petrobras oil giant.
This comes as a boon for both Petrobras and Rousseff who have been battling allegations that senior management at the energy giant skimmed billions in profits.
Rousseff was Petrobras chairwoman from 2003 to 2010 before she was elected President.
She has admitted that corruption did occur during her years at the helm but insists she had no knowledge till she had already left the company.
Rousseff and Li also signed a multitude of agreements to further cooperation on trade, investment, agriculture, energy and transportation.
The two leaders also agreed on the $1.3 billion sale of 22 Brazilian Embraer commercial jets to China’s Tianjin Airlines.
China’s Bank of Communications also announced it would buy 80 per cent stake in Brazilian bank Banco BBM SA (BBM).
Brazil’s mining giant Vale, the world’s leading iron ore producer, signed Memorandums of Understanding (MoUs) with the Industrial and Commercial Bank of China (ICBC), the Export-Import Bank of China (EXIM Bank) and two leading Chinese shipping firms.
ICBC will provide Vale with up to $4 billion in “syndicated loans, bilateral loans, export credit, trade finance, among other potential financing arrangements and services.”
In addition, Vale signed two three-party MoUs for potential financing and loans with EXIM Bank and shipping giants China Ocean Shipping Company (Cosco) and China Merchants Group.
“According to each memorandum, China EXIM Bank will consider providing a loan of up to 1.2 billion dollars to both Cosco and China Merchants respectively to facilitate the two shipping companies’ provision of iron ore shipping services to Vale,” the mining company said.
China also ended a ban on Brazilian beef imports, in effect since 2012, due to a mad cow scare. Eight Brazilian meat processing plants were approved to ship to China, and 17 more are expected to get the green light in June, opening up potential sales of half a billion dollars, the agriculture ministry said.
The strong Brazil-China cooperation has long been at the forefront of Brasilia’s foreign policy.
“The comprehensive strategic partnership with China will be meted out priority treatment during the second term of President Dilma” said an official statement on the Brazilian government website shortly after Rousseff’s re-election.
In the summer of 2014, Chinese President Xi Jinping and Rousseff signed off on a railway spanning the continent from Brazil’s Atlantic coast to Peru’s pacific ports, which would significantly reduce the costs and time required for Brazil to ship raw commodities to China.
Li’s four-nation Latin America tour will continue with visits to Colombia, Peru and Chile later this week.
The BRICS POST with inputs from Agencies