In Brazil, Hu Jintao aims for bigger piece of Latin America trade
A meeting between Brazil's President Luiz Inácio Lula da Silva and China's President Hu Jintao is expected to strengthen the two nations' growing economic ties. China already trumps the US as Brazil's top trading partner.
Mexico City and São Paulo, Brazil
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Trade between Brazil and China rose from $6.7 billion in 2003 to $36.1 billion last year, according to Brazilian government figures. Last year China even dislodged the US as Brazil’s top trading partner.
While some regional analysts have criticized China’s growing presence in the region and questioned its motives, most believe the Asian giant is simply acting in its own economic interest. In the last several years, the relationship between China and Latin America has deepened, especially since Hu made a regional visit in 2004 that ignited a steady climb in China's consumption of South American commodities.
On Thursday, Mr. Hu decided to cut short his visit and depart after his meetings so he could get home and help deal with the aftermath of an earthquake in Qinghai province that killed at least 618 people.
Trade between China and the region is often seen as a simple exchange of Latin American commodities like copper for Chinese manufactured goods like televisions or radios. In the case of Brazil last year, 76.8 percent of exports to China were basic products and 98.1 percent of Chinese imports were manufactured goods.
But Rodrigo Maciel, the executive secretary of the Brazil-China Business Council, says many Brazilian companies are now raising capital from Chinese firms and bringing in Chinese managerial and technical expertise.
“China is becoming a big investor in Brazil. It invested more than $2 billion in the mining industry in the first three months of the year. That is a lot of money, and it is very important. Those investments will elevate the relationship and make it more serious,” says Mr. Maciel, who just returned from a 35-day trip to China where he was helping to broker business deals.
Maciel also helped organize two summits for this week where 75 Chinese companies are meeting with almost 300 Brazilian business leaders to discuss future opportunities. “Many business people understand that China is a potentially massive investor and they are going there to look for partners.”
According to O Estado de São Paulo, a leading Brazilian newspaper, Chinese companies may invest in Brazil’s vast oil industry and get involved in the construction of a multi-billion dollar high-speed train between Rio de Janeiro, São Paulo, and Campinas.