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.

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Studies to Eliminate Dollar in Brazil-China Trade Going Slow

China and Brazil have created a work group to study the possibility of implementation of a bilateral trade program in their respective currencies, in replacement of the North American dollar, said a source in the Central Bank of Brazil.

"The negotiations are still in an initial phase, with a work group having been created with representatives of Brazil and China, who also met during the G-20 summit, in London," explained a source.

The next step should be the visit of a Central Bank of Brazil delegation to China, "despite there being no forecast as to when it may come true," said the source.

The work group should analyze the "results to be reached through an agreement that China recently established with Argentina" - the first country in South America to benefit from trade exchanges in the same currency with the Asian giant and with whom Brazil has also been developing the same program since September 2008.

The Central Banks of China and Brazil are also going to develop a "study of the potential bilateral trade volume to analyze the possibility of an agreement."

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Written by Newsroom
Wednesday, 16 September 2009
[Source] - brazzilmag.com

Ideology vs profit; Colombia and Venezuela's trade dispute gets nasty

Economist Article --

Venezuela and Colombia -- Politics versus trade

Sep 10th 2009 | SAN ANTONIO DEL TÁCHIRA
From The Economist print edition
Hugo Chávez stamps out regional economic integration

BUSINESS is slack at José Nelson Uribe’s tiny grocery store in San Antonio del Táchira, just a stone’s throw from Venezuela’s border with Colombia. “I’m not selling even a quarter of what I sold before,” says Mr Uribe. His woes are a result of the political conflict between his namesake, Colombia’s president, Álvaro Uribe, and Venezuela’s Hugo Chávez. “Before” means before July 28th, when Mr Chávez declared a “freeze” on diplomatic ties and said he would seek alternatives to Colombian goods. This was officially a response to an agreement formalising American use of seven Colombian bases for anti-drug operations, but it also coincided with questions as to how anti-tank rocket-launchers sold by Sweden to the Venezuelan army ended up in a camp belonging to the FARC guerrillas in Colombia. It is not the first time that Mr Chávez has threatened trade sanctions, but this time he seems serious.

The impact on the border region was swift. For each country, the other is the second-biggest trading partner (after the United States in both cases). Bilateral trade totalled $7.2 billion last year, of which $6 billion consisted of Colombian exports, mainly of food, live animals, clothing and cars. Four-fifths of that trade passed along the twisting mountain road that links San Antonio with the state capital, San Cristóbal. “That represents 50,000 direct jobs and 250,000 indirect [ones],” says José Rozo, a local business leader. Many of these are in transport firms and customs agencies. “Before, the local lorry drivers were doing around 500 trips a day,” Mr Rozo says. “Now it’s down to about 80.” Industry in Táchira has been hit too, since many companies depended on imports from Colombia.

The border is not closed. But few of the 30,000 Colombians who used to cross each day to shop do so now, because Venezuela’s National Guard confiscates their goods when they recross the border, says Mr Uribe, the shopkeeper. Venezuela’s government has stopped issuing import permits, nor is it providing dollars at the official exchange rate for imports from Colombia (a dollar costs almost three times more on the parallel market)...

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Brazil, India - Bilateral trade to reach $10 bil by 2010

[South-South Cooperation] -- Brazil, India -- ChennaiVision


Mumbai, The bilateral trade between India and Brazil is targeted to reach USD 10 billion by 2010 in view of the new dynamics of South-South cooperation, accelerated by recession hitting the West, CII International Trade Panel Chairperson Harshbeena Zaveri said today.

”The bilateral trade between the two countries has grown from a mere 500 million US dollars in 2000 to 3.12 billion US dollars in 2007 and is targeted to reach USD 10 billion by 2010”, Ms Zaveri, who is also president of NRB Bearings Pvt Ltd said during a conference with the Brazilian industry delegation, that is visiting the to give an impetus to trade and investment.

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