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Li expected to sign US$100b investment deals in Brazil [Copy link] 中文

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Post time 2015-5-19 17:27:50 |Display all floors

Premier Li Keqiang arrived in Brasilia on Monday to sign agreements on infrastructure, energy and aviation that experts say could reach at least $100 billion.

Li's visit, which will also take him to Colombia, Peru and Chile, aims to restructure China's resource-driven trade with Latin American countries by including more value-added products.

Li is scheduled to meet Brazilian President Dilma Rousseff in Brasilia, sign the agreements and meet the press. He will also address Chinese and local corporate leaders about China's plan to upgrade its trade with Latin America's largest economy through better financing and targeted industries. Li will then fly to Rio.

Brazil is the first leg of Li's Latin-America trip. He is accompanied by his wife Cheng Hong.

"I expect to deepen political trust and economic cooperation with Brazilian leaders with an focus on industrial capacity, equipment manufacturing cooperation and infrastructure construction," Li said upon his arrival at the airport.

China previously had said deals expected to be signed with Brazil include a feasibility study for a rail link from Peru's Pacific coast to Brazil's Atlantic coast.

The project seeks to lower transport costs of Brazilian products to China. It also would fit into China's plan to export globally its expertise on high-speed railways.

Under the Program of Investments in Logistics, Brazil will invest $65.8 billion in construction and expansion of its aging highways and railways.

A total of $20.8 billion will be used to double Brazil's 5,700 kilometers of highways, while $45 billion will be used to build 10,000 kilometers of railways, according to Xinhua News Agency.

Chen Duqing, China's former ambassador to Brazil, said the construction projects mean big opportunities for Chinese companies as Brazil strives to upgrade its infrastructure, especially the transportation system.

"It is imperative for the country to modernize its transportation network, so as to improve efficiency and encourage spending. Chinese companies are usually at a more advantageous position for these infrastructure construction biddings because they come with a financing plan," Chen said.

The investments are to be made through the private sector, with the government selling highway and railway concessions to private companies.

Brazil's transportation system consists mainly of main road and railway networks, where the railway capacity accounts for only 24 percent. Railway networks are used mainly in the south, the southeast and northeast of Brazil, more than 35 percent of which was built 60 years ago.

Chen said logistics are a main problem for Brazil because high costs have increased agricultural prices and reduced their competitiveness with overseas producers.

The country relies heavily on road transportation for grains, sometimes impossible to transport during rainy periods. Railways and waterways are cheaper and faster, but underdeveloped.

According to the Brazilian Association of Cereal Exporters (ANEC), the average price for shipping soybeans from Brazil has been nearly $98 per ton over the past three years, which is five times higher than in the United States and considered the most expensive in the world.

Chen said Chinese companies must go to Brazil to know local laws and rules before completing deals.

Brazilian daily newspaper O Globo reported a change of interest among Chinese investors for value-added industries.

"There is a kind of evolution of Chinese investment in Brazil. We have already been in a third wave. It started in the energy sector with China's State Grid, and now there is much interest in railways," O Globo quoted Guilherme Billi, head of the trade-promotion sector at the Brazilian embassy in Beijing, as saying.

The State Grid Corporation of China has invested more than $1 billion to construct and manage power transmission projects in Brazil. Chinese investors are also very interested in railways and "all the large railways groups in China want to operate in Brazil," added Billi.

China has been Brazil's largest trade partner since 2009, accounting for 18 percent of the country's foreign trade. Despite a slight decrease, bilateral trade last year was $78 billion, according to Brazilian authorities.


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Post time 2015-5-20 05:09:15 |Display all floors
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Post time 2015-5-20 13:29:36 |Display all floors
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Post time 2015-5-20 19:35:40 |Display all floors
This post was edited by abramicus at 2015-5-22 11:58

China is helping South America duplicate what the Pacific Railroad Bill signed by President Abraham Lincoln on July 1, 1862 did, which is to connect the East Coast with the West Coast by building the Transcontinental Railroad from each end, starting with the Central Pacific Railroad that begins at Sacramento and is assigned the difficult task of blasting through 11 tunnels in the Sierra Nevada Mountains, at high elevations of 6,000 feet, working through harsh winter storms, and the Union Pacific Railroad that begins at Omaha, Nebraska, pushing westward toward the Sierra Nevada.  After one year of fruitless efforts, the Central Pacific Railroad began to recruit Chinese laborers, first in the West Coast, then from Canton (Guangzhou), China.  In a short time, the workforce of the Central Pacific Railroad was 80% Chinese, and was able to lay 10 miles of track a day under favorable conditions, while the Union Pacific, boasting of its military-like precision, using soldiers who seved in the Civil War, was maxing out at 2 miles of track per day.

While the West was won with the guns of the cowboys, without which the Chinese workers could not have done their job, the long term development of the West, and of the entire United States, was won by the hard work of the Chinese people who braved the dangers of drilling into solid rocks and stuffing them first with black powder, and later, with made-on-site nitroglycerin, plus the freezing winters, avalanches, and work injuries.  Without the Chinese workers, Leland Stanford, one of the founders of the Central Pacific would not have made his fortune, and Stanford University would not have come into existence.

The proposal therefore by China to link Brazil with Peru in building a South American Transcontinental Railroad holds the same, if not greaer promise of improving the standard of living of the entire South American continent, with the difference that China will provide not just the technology, but also the capital and financing.  This is a win-win deal for both Brazil and China, and is simply too good to pass up, as there is no other country with the willingness to do so much for so little profit.  No cowboys, this time are needed, and no natives will be displaced or massacred.  China is building a South American Transcontinental Railroad in fact for the natives, minus the land grab and extermination of the natives that marked the North American Transcontinental Railroad development.  And guess what?  It will be cheaper to build, cheaper to maintain, run faster, carry more load, and bring more prosperity to the thousands of towns and cities that line its corridor.  Truly, a legacy for all history.

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