By MarEx 2015-05-19 15:07:47
Brazil and China are engaging in talks this week to increase trade cooperation between the two nations and expand Brazil’s infrastructure network.
Brazilian president Dilma Rousseff and Chinese Premier Li Keqiang held a joint press conference in which the countries announced over $53 billion in trade, finance and investment deals with China. The money will largely help Brazil upgrade its dilapidated infrastructure networks to facilitate increased commerce.
Chinese companies are increasingly looking abroad for new opportunities to invest as China’s economy slows. “China wants to get involved in Brazil’s large plans to build freight railroads, electricity and telecommunications networks,” wrote the Chinese premier, who arrived on Monday night before beginning his official round of meetings on Tuesday.
Rousseff, who has been forced to cut spending on public works to put government finances in order, is preparing a package of concessions to attract private investors to build or modernize Brazil’s railways, roads, ports and airports. It will be announced in early June.
The two countries also agreed to start feasibility studies on a railroad that will cross the Andes and link Brazil’s Atlantic coast to Pacific ports in Peru, allowing Brazilian exports to China to avoid the Panama Canal.
The news comes the same day that China Ocean Shipping Companies (COSCO) and Brazilian miner Vale completed a $445 million sale of four VLOCs and announced an agreement to sell an additional four other ore carriers to China Merchant Shipping Co.
The world’s largest mining company has been forced to raise cash in the midst of an iron ore price slump. The 400,000-dwt vessels are some of the largest ships ever built and were designed to help reduce the cost of shipping ore to China from Brazil, helping Vale better compete with Australian rivals who are closer to the largest market for the steelmaking ingredient.
Last year alone Chinese banks lent over $22 billion to Latin America up 71% from 2013. Additionally China’s President Xi Jinping has committed to investing over $250 billion into Latin America over the next decade. China is looking overwhelming to Latin American countries to provide iron ore, soybean and food product imports to the Chinese market.