Thursday, September 17, 2009

Sino-Brazilian Cooperation

Loro Horta presents a good analysis of the growth and future direction of Sino-Brazilian Cooperation.

The dragon and anaconda: China, Brazil and power balance in Americas

By Loro Horta
Published on September 16, 2009

The Sino-Brazilian strategic partnership signed nearly two decades ago has, in recent years, begun to produce some impressive results. In 2007 trade between the two giants reached US$29 billion and grew to an impressive $43 billion by the end of 2008. This expanding economic relationship is being complemented with a corresponding growth in their political and diplomatic partnership.

Chinese President Hu Jintao (R) shakes hands with his Brazilian counterpart Luiz Inacio Lula da Silva
after signing the joint communique at the Great Hall of the People in Beijing, capital of China,
May 19, 2009. (Xinhua/Rao Aimin)

Both countries have cooperated in very sensitive areas such as space technology, aviation and military-related technologies. Since the early 1990s the two countries have launched three jointly-developed satellites and are co-producing a medium-range commercial jetliner. American defence and intelligence officials have expressed concern over such ties, claiming that Brazil was passing to China sensitive satellite and remote sensing technology in exchange for Chinese ballistic missile know-how.

Brazil is indeed a very important source of technology for a China that has been restricted by arms sanctions by the West following Tiananmen. Brazilian weapons have reached as far as Southeast Asia, when Malaysia acquired 18 Astros multiple rocket launchers (MRLS), causing concern in Singapore in the early years of the current decade.

Brazil is not just a major military technology provider, but also a supplier of civilian products. This was clearly demonstrated in August 2007 when it signed a $1.3 billion contract to sell commercial jetliners to Lufthansa and Japan Airlines.

An example of the closeness of Sino-Brazilian military ties came in May this year when Brazilian defence minister Nelson Jobim announced that Chinese fighter pilots would be trained on the Brazilian aircraft carrier Sao Paulo. Jobim's announcement came shortly after a senior Chinese military official publicly stated Beijing's intention to acquire an aircraft carrier in the near future. Bearing in mind that very few countries in the world possess an aircraft carrier and that they are all close US allies, the Brazilian gesture no doubt attests to the importance of Brazil as a source of military technology and know-how.

The energy sector is fast emerging as one of the most important areas of cooperation between the two nations. Brazilian national oil company Petrobras and China have signed several agreements for the construction of various sections of a massive $6 billion pipeline to transport Brazil's growing energy exports to China. In May this year the Chinese government signed a loan of $10 billion to Petrobras to assist it in developing the newly discovered Tupi oil fields.

In exchange, Brazil is to supply Chinese state-owned Sinopec with 200,000 barrels of oil a day for the next 10 years - nearly 7 per cent of China's oil needs. Petrobras is also reported to be transferring deep-water drilling technology to Chinese state-owned companies - an area where China has been rather unsuccessful. Most of its oil activities in China and throughout the world are on shore or in relatively shallow waters.

Click here to read the full analysis