Chinese companies signed commitments on Friday to finance and build railways and ports that will help Brazil export iron ore and soybeans, the two main commodities it sells to China, during a state visit by Brazilian President Michel Temer.
China Communication Construction Co Ltd <601800.SS> agreed to finance the expansion of the Amazon basin port of Itaqui in the state of Maranhão, Brazilian Transport Minister Maurício Quintella told reporters in Beijing. He gave no further details.
Separately, a consortium of five Chinese companies confirmed their intention to build a port in the city of Ilheus in Bahia state for the export of iron ore from a 20-million-tonne-per-year mine at Caetité, Quintella said in remarks broadcast on Brazilian government television.
The companies plan to bid for a contract scheduled for auction next year to build and operate a railway line called FIOL to link Ilheus to the mine. It will also be used to transport soy for export.
The majority owner of the mine is Kazakhstan-based Eurasian Resources Group, with the state of Bahia holding the remaining interest. Temer stopped in Kazakhstan on his way to Beijing and met with ERG executives, who told him they planned to invest $1 billion in the mine and contribute $1.4 billion to build the railway, Brazil media O Globo reported.
Temer visited Beijing seeking increased investment by Brazil’s largest trading partner as his government pushed ahead with privatization plans for airports, ports, roads and energy infrastructure, including Eletrobras , his country’s largest utility.
According to Quintella, China’s HNA Group, which has bought 30 percent of the concession to operate Rio de Janeiro’s Galeao international airport through its HNA Airport Holding Group Co Ltd [HNAIDD.UL] subsidiary, will guarantee the opening of a flight route from that city to China, Chairman Chen Feng said in a meeting with Temer.
Reporting by Anthony Boadle; Editing by Lisa Von Ahn
China and Brazil sign agreements on football, nuclear power
China and Brazil signed 14 cooperative agreements on Friday, including on football and nuclear and hydro power, as embattled Brazilian President Michel Temer seeks to revive Latin America’s largest economy.
They were inked following Temer’s meeting with President Xi Jinping in Beijing ahead of next week’s BRICS summit.
Temer, who has vigorously sought Chinese investment since taking office last August, said his 19-member delegation “shows the priority that we give” to relations with Beijing which he praised as “prosperous and affectionate”.
“Brazil is a premier cooperative partner for China,” Xi said.
“The Brazil-China relationship has global strategic significance and the two countries should deepen their cooperation and proceed ahead in harmony.”
China, meanwhile, is looking to find overseas markets for its excess industrial production capacity.
Aside from economic matters, Xi has stated he aims to make China a genuine force in international football and hopes to see it host the World Cup.
Brazil’s economy is slowly returning to growth after two years of recession, with the government statistics office revealing Thursday that the country’s jobless rate unexpectedly fell to 12.8 percent in the three months through July.
As the 76-year-old head of the centre-right PMDB party, Temer has pushed austerity cuts, looser labour laws and a big privatisation programme that he says will revive the sickly economy after more than a decade of leftist rule.
The president is also embroiled in a heap of corruption scandals, having been accused of everything from coup plotting to taking millions of dollars in bribes.
Zhang Run, the deputy director general of China’s department of Latin American and Caribbean Affairs, told reporters that Brazil’s economy was “back on track”, adding that their relationship had “withstood the test of changing circumstances”.
Trade between the two countries rose more than 30 percent in the first seven months of this year, Zhang said, noting that China’s more than $30 billion in investments in Brazil makes it the “number one destination for Chinese investment in Latin America”.
Zhang added that China recently became Brazil’s top export market for beef, despite a rotten meat scandal this June which threatened the country’s position as the world’s leading beef and poultry exporter.