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.

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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.
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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.

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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.

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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.

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

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Brazil’s president arrives in Beijing

[South-South Cooperation] — China, Brazil — Al Jazeera

Lula arrives in China – [Reuters]

Brazil’s president has arrived in China for three days of talks expected to focus on broadening ties between two of the world’s largest developing economies and moves to decrease their dependency on the US dollar.

The visit by Luiz Inacio Lula Da Silva is his second in 12 months, highlighting the importance of China which recently overtook the US as Brazil’s most important trading partner.

On Tuesday Lula will hold talks with his Chinese counterpart, Hu Jintao, as well as host a bilateral business forum and visit an aircraft factory.

Speaking ahead of the visit he said he was looking to the trip to promote “a new economic order”, while an official from the country’s foreign ministry said a theme of the talks would be a “reorganisation of the international scene”.

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Al Jazeera’s Tony Cheng reporting from Beijing says the main point of discussion during Lula’s visit will be on Brazilian energy resources which Beijing, with reserve funds to spare, was keen to exploit.

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Brazil’s two-way trade with China, one of the few economies still growing strongly despite the global crisis, reached $3.2bn in April, surpassing the $2.8bn trade total with the US.

So far this year, government data showed that Brazilian exports to China grew 65 per cent over the same period in 2008, rising from $3.4bn to $5.6bn.

Click here to access the complete article from Al Jazeera

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Weekend Newswire: South-South Cooperation

[Brazil – Saudi Arabia] — Saudi Arabia and Brazil are natural allies

By Luiz Inacio Lula Da Silva

This week I will have the honor to be the first Brazilian President to officially travel to Saudi Arabia. I retain fond memories of the visit in 2000 of the then Crown Prince to Brazil. Since then, numerous high level visits have further strengthened the ties between our two countries and peoples.

Brazil prides itself on having roots in the rich cultural heritage of Arab civilization. Successive waves of immigrants from the Middle East have made their way to Brazil in search of a new horizons and a better life. Over the years they have contributed to forging present-day Brazil and to its diverse human landscape. Arab values, tastes and sensibilities are today an integral part of what it means to be Brazilian.

My trip to Saudi Arabia aims to explore and enhance these many-faceted affinities and the opportunities for cooperation that they offer. Much has been achieved over recent years, but much remains to be done if we are to fully realize the potential of two thriving economies that are making their mark on the global scene.

[China – Bahrain] — Bahrain reviews construction ties with China
Co-operation between Bahrain and China in the construction sector was discussed at a key meeting.

Minster of State for Foreign Affairs and Tamkeen chairman Dr Nazar Al Baharna met a Chinese business delegation and discussed various issues of mutual interest.

Development of programmes that can reduce the dependency of construction companies on unskilled labour by introducing machinery and technological solutions was also highlighted.

[India – Kenya] — Kenya, India to beef up ties in small industry sector
In yet another indication of India’s growing interest in the East African region, the country’s National Small Industries Corp (NSIC) has signed an agreement with Kenya Industrial Estates (KIE) to strengthen cooperation in the small scale industry sector.

KIE is a state-run agency of Kenya to promote indigenous entrepreneurship and small and medium enterprises (SME).

According to media reports here, the partnership involves technology transfer, and marks a major step towards improving Kenya’s quality standards in manufacturing, production and human resources.

“The government is keen to forge a viable partnership with friendly countries, particularly in the spirit of south-south cooperation,” Kenyan Industrialisation Minister Henry Kosgey was quoted as saying.

[Asia – Africa] — Asian Foreign Direct Investment in Africa
Foreign direct investment (FDI) in Africa by developing Asian economies is growing and has the potential to reach much higher levels. The present report notes that Africa-bound FDI is still a small percentage of the rapidly climbing foreign investments being made by Asian transnational corporations.

The rapid economic growth in Asia can be expected to lead to increased Asian investments in Africa, in both natural resources and manufacturing. In particular, the rapid industrial upgrading taking place in Asia provides ample opportunities for Africa to attract efficiency-seeking and export-oriented FDI from Asian economies.

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