Newswire: South-South Cooperation

[Russia – Brazil] — Russia, Brazil to Buy $20 Billion IMF Bonds, Diversify Reserves

Russia and Brazil, seeking to reduce their dependence on the dollar, announced plans to buy $20 billion of bonds from the International Monetary Fund and diversify foreign-currency reserves.

[Brazil – Russia – IMF] — Brazil (and possibly Russia)to Buy $10 Billion of IMF Bonds, Mantega Says

Brazil will buy $10 billion of bonds issued by the International Monetary Fund to help the Washington-based lender provide financing to countries hurt by the financial crisis, Finance Minister Guido Mantega said.

“This is an investment that Brazil is doing with part of its reserves and making available financing so that the IMF may help emerging countries, especially developing countries which today face a shortage of capital because of the global financial crisis,” Mantega said.

Russia’s central bank said today it may cut investments in U.S. Treasuries, currently valued at as much as $140 billion, a week after China said it may reduce reliance on the dollar and U.S. bonds. Treasuries fell after Alexei Ulyukayev, first deputy chairman of Bank Rossii, said some reserves may be moved into IMF debt.

[China – Afghanistan] — Afghanistan to boost economic, security ties with China: Afghan FM

“Since the beginning of the new era in Afghanistan in late 2001,China has been among our most committed and generous friends,” Spanta, who is here for an official visit, told a seminar on Afghanistan’s role in the region.

China has been instrumental in regional consensus and international solidarity with Afghanistan, he said, noting China is also the largest investor in the war-hit country.

[China – Cameroon] — China vows to enhance friendly military co-op with Cameroon

The Chinese armed forces are willing to advance friendly cooperation with Cameroon, Chinese Defense Minister Liang Guanglie said here Wednesday.

The Chinese armed forces attach importance to its relations with Cameroon, said Liang, adding China is ready to work together with Cameroon to raise bilateral military ties of friendly cooperation to a higher level.

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Newswire: China

Regulate with a Big Stick, Not a Fly Swatter
China’s securities regulators should focus on sound oversight and tough discipline to protect, not merely stabilize, the market.

Three cases that came to light during the second week of May drew attention to regulatory efficiency and tight enforcement in the securities market. A former president of China Galaxy Securities, Xiao Shiqing, was arrested May 13. That same day, Sinolink Securities (SSE: 600109) announced that its chairman, Lei Bo, had been placed under investigation. And a day later, Rongtong Fund Management booted fund manager Zhang Ye for suspected involvement in so-called “rat trading.”

On the surface, these cases seem unrelated. Each involves a different context. But deep down, each is connected to how regulatory agencies shoulder their responsibilities. And now, once again, concerns have been raised about regulatory oversight and regulatory capture.

Securities legislation protects investors
Small investors’ interests are high on the agenda in the revision of China’s Securities’ Law, which will be deliberated by China’s legislature later this year.

But the country’s legal system still needs improvement to enable investors to make full use of the Securities Law, including taking steps like “collective action” against listed companies that cheat, said a senior lawmaker.

China Spends 61.2% of 2009 Investment Budget
The central government has already spent 61.2 percent of its 2009 investment budget as it pours funds into infrastructure, education and health care, the official Xinhua News Agency reported on May 27.

China’s Manufacturing Expands for Third Month, Adding to Signs of Recovery
China’s manufacturing expanded for a third month, adding to evidence that the world’s third-largest economy is recovering from its deepest slump in almost a decade.

Geithner to Tell China No One More Concerned About U.S. Deficit Than Obama
Treasury Secretary Timothy Geithner arrived in Beijing with a pledge that the Obama administration will control its borrowing as he sought to reassure China its holdings of U.S. government debt are safe.

China’s Steel Association Rejects Iron Ore Prices Reached by Rio, Nippon
The China Iron & Steel Association rejected an agreement on ore prices reached between Rio Tinto Plc and Nippon Steel Corp., according to a statement on the group’s Web site. The price reached between Rio and Nippon Steel doesn’t reflect changes in the global market and would result in losses for Chinese steelmakers, the group said.

Treasuries `Only Game in Town’ as China Boosts Holdings While Dollar Falls
For all the hand-wringing over the dollar’s slide, the expanding U.S. deficit and the nation’s AAA credit rating, the bond market shows international demand for American financial assets is as high as ever.

China Increases Diesel, Gasoline Prices as Much as 8%, Aiding Oil Refiners
China, the world’s second-biggest energy consumer, increased fuel prices by as much as 8 percent today, allowing the nation’s refiners to pass on climbing crude oil costs.

Prices charged by refiners to wholesalers for gasoline and diesel rose by 400 yuan ($58.57) a metric ton, the National Development and Reform Commission, China’s Beijing-based economic planning agency, said on its Web site late yesterday.

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China to launch iron ore trading platform – AP

China will launch its first iron ore trading platform next week in a move that may lead to setting up its own pricing index and possibly exerting more influence over import costs, an official and reports said Friday.

The Rizhao International Iron Ore Trade Center will begin providing electronic commercial services for iron ore suppliers and steelmakers on Monday, said Liu Qiang, sales manager of Shandong Huaxin Trading Co., which is heading the project.

The center, a joint venture by Shandong Huaxin and four other local companies involved in bulk commodity dealings, will handle electronic transactions, information exchange, quality inspection, storage, transport, insurance and trade settlement, Liu said.

The center will act as a clearinghouse for information on iron ore trading, Liu said.

“As it gains influence in the long-term, it may have some influence on price negotiations,” he said.

Rizhao, a port in eastern China’s Shandong province, is one of the country’s biggest handlers of iron ore imports.

The trading platform would likely mainly serve China’s numerous smaller steelmakers. They buy independently from the biggest mills and do not pay the same benchmark prices the big steelmakers agree to each year in sometimes tortuous negotiations with overseas miners like Brazil’s Companhia Vale do Rio Doce SA and global miner Rio Tinto Group.

Meanwhile, the annual negotiations with overseas iron ore suppliers dragged on, according to the government-affiliated China Iron & Steel Association, which vehemently denied reports that Chinese steelmakers had settled for 30 percent to 35 percent price cuts.

“China’s steel industry and those of Japan and Korea are facing severe shocks from the global financial crisis,” CISA said in a statement posted on its Web site. It said the annual negotiations were continuing on a basis of “mutual interest and long-term stability.”

Unlike in previous years, when Shanghai-based Baosteel Group led the talks, this year CISA is handling the negotiations. Analysts say it is seeking at least a 40 percent cut in this year’s benchmark prices.

China imported 444 million tons of iron ore in 2008 – half of the volume of all imports worldwide, according to government figures. Imports in January through April surged to 188 million tons, as traders took advantage of lower prices to build up stockpiles.

Iron ore pricing has long been a point of contention between China, the world’s biggest steel producer and consumer, and foreign raw materials suppliers.

Such friction intensified in recent years as surging demand due to the booming economy and speculative buying drove prices for iron ore and other commodities higher.

But a slowing in industrial production due to the global economic crisis has raised expectations that Chinese and other steelmakers may win big concessions in this round of talks after yielding to demands for double-digit increases in ore prices in previous years.

[Source] — Associated Press researcher Ji Chen contributed to this report.

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China Negotiates for Deepwater Oil Blocks Offshore Brazil

[South-South Cooperation] — Brazil, China — Rigzone

Lula’s visit to China has been anything but boring. On the heels of the $10 billion oil for cash deal reached between Brazil and China this past week, comes news of negotiations for two deepwater oil blocks between Petroleo Brasileiro SA (PBR) and China Petroleum & Chemical Corp.

Rigzone reports in this article:

The two oil blocks under negotiation between oil giants China Petroleum & Chemical Corp. (SNP) and Petroleo Brasileiro SA (PBR) are deepwater exploration blocks located in the north of Brazil, the Brazilian company’s top financial official told Dow Jones Newswires on Thursday.

Conversations, however, are still ongoing and the deal isn’t closed, said Almir Barbassa, chief financial officer of Petrobras, as the Brazilian company is known.

The blocks under consideration are within Brazilian waters, are 100% owned by Petrobras and run deep, or about 2,000 meters, he said. They are located off the coast of the two neighboring states of Para and Maranhao in northern Brazil, Barbassa added.

Earlier this week, China’s National Energy Administration Chairman Zhang Guobao told reporters in Beijing that Brazil would offer two oil blocks to Sinopec, as the Chinese company is known, as a way to strengthen energy cooperation between the two countries. He didn’t give any further details.

Click here to access the full article from Rigzone

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Hong Kong, Taiwan Approve Exchange-Traded Fund Cross-Listings

[Breaking News] — Bloomberg

Financial regulators in Hong Kong and Taiwan agreed to allow cross-listing of exchange-traded funds in the two markets, Hong Kong’s Securities and Futures Commission said on its Web site yesterday.

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China and Brazil seal $10 billion deal

[South-South Cooperation] — China, Brazil

Lula da Silva & Hu Jintao

Chinese President Hu Jintao and his Brazilian counterpart, Lula da Silva, finished writing the latest chapter in Sino-Brazilian Cooperation earlier today in Beijing.

ChinaSouthAmerica has been following this story for a few months now, and I must say, it is nice to see a classic example of South-South Cooperation / Emerging Market Cooperation (whatever you want to call it) develop and eventually get finalized.

Here are a few excerpts from a WSJ article that a great job of summing up the details.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

State-owned Brazilian oil giant Petroleo Brasileiro SA said it finalized a $10 billion loan agreement from China in return for a long-term supply of oil, another victory for China’s new strategy of using its cash-rich banks to help secure the natural resources the country needs to keep its economy growing.
…

Petroleo Brasileiro, known as Petrobras, said under the terms of the 10-year loan from China Development Bank, which has been at the center of China’s resources policy, Brazil would supply China Petrochemical Corp., known as Sinopec, 150,000 barrels of oil a day for the first year, rising to 200,000 barrels a day for another nine years.

…

Mr. Gabrielli said the loan’s interest rate was under 6.5%, and the loan used oil revenue as collateral but would be repaid in cash — not oil. Although the deal didn’t include guarantees to buy Chinese products or services, other deals will work on exploring closer cooperation, such as moving Chinese equipment factories to Brazil.

…

China’s mission to secure commodities does not stop with Brazil–as you are well aware if your a frequent reader at this site.

Beijing has struck similar agreements with energy producers world-wide in recent months, including a $10 billion deal with Kazakhstan and a $25 billion deal with Russian oil and pipeline companies.

…

Stay tuned for further developments and ChinaSouthAmerica’s analysis this deal and growth of Sino-Brazilian Cooperation.

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Jim Rogers: "We are going to have serious food shortages in a few years"

Jim Rogers sits down with Bloomberg host Haslinda Amin in his home base of Singapore. Haslinda gets a full twenty minutes to test his patience while she asks what his opinions are on investing in a variety of investment categories. Commodities. Currencies. North American Natural Gas. Yen Carry Trade. Agriculture. Equities. ETF’s.

As usual, Jim Rogers is sticking to what he knows best-raw materials. If you’re a new reader, or have not heard of Jim Rogers definitely run a search on the right of his name to bring up past posts and videos including him.

Part 1 /3

Part 2 / 3

Part 3 / 3

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Newswire: South-South Cooperation

[China – Venezuela] — CNPC, Venezuela Plan to Build Two Oil Refineries in China
China National Petroleum Corp. and Venezuela plan to build two oil refineries in China, Jiang Jiemin, the president of the Chinese company, told reporters in Beijing today.

[China – Trinadad & Tobago] — Alutrint: Chinese labor needed due to lack of local expertise
China’s EXIM bank placed as a condition on its consent to provide a US$400mn loan to the Trinidad & Tobago government to build the Alutrint aluminum smelter – in the La Brea region of Trinidad island – that the project hire Chinese contractor CMEC to provide labor and technology for the plant, Alutrint manager of communications and community relations Josieann Richards told BNamericas.

[China – Russia] — Chinese Envoy to Russia: Oil Pipeline Serves Strategic Goals of Both Sides
The construction of the China-Russia oil pipeline conforms with the strategic goals of China and Russia to diversify the former’s energy imports and latter’s energy exports, Chinese Ambassador to Russia Liu Guchang has said.

[South Korea – Peru] — Peru hopes to complete 70% of FTA talks with Korea this week
Peru hopes to complete 70 percent of free trade negotiations with South Korea this week because of the similarities found between the two negotiating teams, allowing them to progress quickly, Peruvian chief negotiator Nathan Nadramija said Monday.

During the first round of FTA Negotiations in Seoul on March 16, both countries successfully concluded four chapters relating to electronic commerce, border services, as well as two other chapters related to institutional issues.

[India – Argentina – Bolivia] — Jindal Begins Producing Gas in Bolivia for Export to Argentina
India’s Jindal Steel & Power has started producing natural gas in Bolivia that will be exported to Argentina, a company executive told Efe on Monday.

Luis Carlos Kinn, manager of Jindal subsidiary Gas to Liquids Internacional S.A., confirmed the successful completion of the first production test at the well drilled in the El Palmar field, some 50 kilometers (31 miles) from Santa Cruz, the capital of the likenamed eastern province.

[Chile – Bolivia] — Chile Open to Tunnel Proposal Giving Bolivia Access to Sea
The Chilean government is willing to study the proposal by a group of architects that would provide landlocked Bolivia with access to the sea through a tunnel to an artificial island in the Pacific Ocean.

[Venezuela – Angola] — Venezuelan Government Bank BANDES To Open Branch in Angola
Jesus Alberto Garcia, Venezuelan ambassador to Angola, stated in an interview with Radio Nacional de Angola that Banco de Desarrollo Económico y Social de Venezuela (BANDES), the state development bank of Venezuela, will open a branch in Angola. He added, “This is one of the main things President Chavez wants to do with Africa.” Branches of BANDES outside of Latin America and the Caribbean include Syria and the Republic of Mali.

[Latin America – Spain] — Spain Wants Closer Ties with Latin America
Spain’s King Juan Carlos and Prime Minister Jose Luis Rodriguez Zapatero said Monday that the upcoming bicentennials of Latin American independence should be used to promote Spanish and European Union ties to the region.

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