Brazil, China Do Mega-Deals
Brazil has agreed to recognize China as a market economy,
and China has agreed to support Brazil in its bid to join
a new revised Security Council in the United Nations.
These were just part of the deals signed by Chinese president
Hu Jintao on his visit to Brasilia.
Hu's visit to Brazil was in reciprocation for Brazilian
president Lula da Silva visit
to China in May. While the Chinese side was mainly
focused on getting China recognized as a market economy,
the Brazilians were most interested in getting investment
commitments to upgrade Brazil's transport infrastructure.
China is keenly interested in Brazil as a source for
foodstuffs and raw materials. Since only 15% of the land
in China is arable, and the country is undergoing rapid
urbanization, the need is particularly urgent. Brazil,
along with the US, is already a major supplier of soybeans
to China. Baosteel, China's largest steelmaker, already
has an iron-ore
facility in Brazil.
On this trip, Brazil was able to secure a deal for China
to purchase about US$650 million of Brazilian beef annually.
China has also said that it is interested in investing
US$5-7 billion annually to upgrade inland road and port
infrastructure. These upgrades are needed if Brazil is
able to sell the amount of foodstuffs and minerals it
hopes to sell to China.
By recognizing China as a market economy, Brazil gives
up the right to accuse China and Chinese companies of
dumping their products.
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