China's Premier Li Keqiang arrived in Brasilia on Monday to sign agreements on infrastructure, energy and aviation that experts say could reach 100 billion dollars. The South American tour also includes Colombia, Peru and Chile and aims to restructure China's resource-driven trade with Latin American countries by including more value-added products.
PM Li Keqiang will be meeting with President Rousseff Tuesday in Brasilia and sign a raft of agreements before flying to Rio do Janeiro (Pic Xinhua)

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

High Speed Railways

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.

Investments

"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.

Political trust and economic cooperation with focus on industrial capacity, equipment manufacturing cooperation and infrastructure, anticipated PM Li

Brazil's transportation system consists mainly of main road and railway networks, where the railway capacity accounts for only 24%. Railway networks are used mainly in the south, the southeast and northeast of Brazil, more than 35% of which was built 60 years ago.
Chen said logistics are a main problem because high costs have increased Brazil's agriculture 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 dollars 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.
However former ambassador Chen said Chinese companies must get involved in Brazil to learn about 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 GuilhermeBilli, head of the trade-promotion sector at the Brazilian embassy in Beijing.
The State Grid Corporation of China has invested more than 1bn dollars 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% of the country's foreign trade. Despite a slight decrease, bilateral trade last year was 78 billion, according to Brazilian authorities.

Published in Economy

China will invest 50 billion dollars to help overhaul Brazil's aging infrastructure, the government announced on Thursday, ahead of an official visit by Chinese Prime Minister Li Keqiang next week. Brazil has repeated that it was determined to overhaul its dilapidated roads, railways, airports and ports.
Premier Li arrives Tuesday in Brasilia on an official visit and will also visit former capital Rio. He then flies to Colombia, Peru and Chile.
President DilmaRousseff fighting to revive the economy said she wanted greater trade cooperation with Beijing and would look to strike a free trade accord.

"There are 50 billion in new projects," said Jose Graca Lima, Brazil's Undersecretary of State with special responsibility for Asia and Oceania. "We shall have to await the end of the visit to expand upon which projects," he said.
Battling a fifth straight year of poor growth and engulfed in a political graft scandal involving its state oil giant Petrobras, Brazil is seeking to revamp sagging infrastructure ahead of next year's Rio Olympics, the first Games to be held in South America.
Li arrives Tuesday in Brasilia on an official visit and will also visit former capital Rio. The Chinese premier will then fly to Colombia, Peru and Chile on a South American swing aimed at consolidating Beijing's influence in the region.
China has been Brazil's chief trading partner since 2009 and one of its main sources of foreign investment. Bilateral trade jumped by thirteen between 2001 and 2013 when it reached 83.3 billion dollars.
Brazilian exports moreover outstripped imports from China by 8.72 billion in 2013 as the largest South American economy benefited from high Chinese demand for commodities. That demand has since dipped, putting a brake on Brazilian growth.
Brazilian President DilmaRousseff, fighting to revive a tanking economy hampered by poor competitiveness and infrastructural neglect, said on Wednesday she wanted to see greater trade cooperation between Brasilia and Beijing and would look to strike a free trade accord.
The Chinese cash infusion is set to cover various sectors, including auto parts, transport, energy, ports, hydroelectric power and railways.
The two countries also hope to bring to fruition an ambitious scheme creating an inter-oceanic railroad stretching across Brazil to Peru, allowing Brazilian exports to be shipped to China. The proposed rail link would stretch some 3,500 kilometers from the port of Santos to the Peruvian Pacific port of Ilo.

Published in Investments

Brazil's central bank has announced plans to reduce the amount of money commercial banks keep in reserve, in a bid to boost economic growth.
The bank says the measure will free up some $13bn (£7.6bn), which banks could lend to businesses and individuals.
The Brazilian economy is expected to expand by 1% this year - the fourth consecutive year of sluggish growth.
The central bank announcement comes less than three months before presidential elections.
President Dilma Rousseff will seek a second four-year term in October.
In 2010, when she was elected, Brazilian gross domestic product (GDP) grew by 7.5%.

Growth dropped to 2.7% in 2011, 1% in 2012 and 2.5% last year.

Published in Economy
Sunday, 06 July 2014 00:00

Where does Brazil go?

At the time of a severe global crisis, many experts wonder what the impact on Brazil will be. Do not just look at the short term.

Where does this country go in the near and not so near future? O Globo took this question to government officials, economists, teachers, doctors, scientists and sportsmen.
The goal was to draw a portrait of Brazil they would want for the next 10 or 20 years.
In 2022, for example, completing the bicentennial of Independence, Brazil should be between the five major global economies and one of its main energy reserves.
Gross Domestic Product (GDP, the sum of goods and services produced) will jump from $ 2.4 trillion last year to about $ 3.5 trillion, advancing on the path to reach the $ 5 trillion in 2030.
In 2022, nearly 210 million Brazilians, of which 70% of working age - all time record - will be a consumer market to envy the great nations and allow the country to start the next decade with a mission to stop being to perform, the old promise of the future.

In the Executive branch, there is no official flight plan that goes far beyond ten years with clear goals.
In general, the plans are the size of government.
The Union, for example, had difficulty making partnerships with China in the area of biodiversity conservation, while with Rio +20, we only have 10 year industrial projects. Asians are planning for the next three decades, said one government official, minister Izabella Teixeira.
Team members of President Dilma Rousseff, said that a major challenge is to reconcile the policies to expand the domestic market, with more income and access to credit, strategies for sustainability of the country.
And this will be increasingly the Brazilian reality in coming decades.
The actions of the Ministry of Finance to consider sustainable practices are still residual.
For the private sector, every effort should be concentrated in education, investments and tax and administrative reforms.
- The environment is on the agenda of the economy, in isolated projects, but growing: the My House, My Life plan, for example, expands the number of dwellings in the country, but now requires green materials. Tax advantages for more efficient cars that are being discussed now will be another novelty - a government source says.
Strategic planning is fragile.

Each of the 24 ministries and 13 agencies with ministerial status in Brasilia has a specific plan, which often does not communicate with others. The president herself, according to close aides, has a very particular vision. Economist João Paulo dos Reis Velloso, who was planning minister in the governments Medici and Geisel, is sarcastic when speaking of long-term strategy officer:
" If you know of one, let me know ", he joked. - The PACplan has nothing bad, but it's just a program. It was then that turned Planning ministry that began chickening out – the economist, responsible for the II National Development Plan (NDP) for 1975-79 said.
The "Brazil 2022" compendium of more than 100 pages prepared by the Secretariat of Strategic Affairs (SAE) of the Presidency at the time was still commanded by the then Minister Samuel Pinheiro Guimarães, is the official document that is closer to a vision strategic long term.
Created in 2010 still under Lula, the report sees a further sovereign country, participating on equal terms in international forums like the UN Security Council and the G-20, with a fairer and more progressive by 2022.
There are 180 related dreams - some vague, others more accurate - but without their means of making them reality. The list of desires, which are being called "Centennial Goals", including everything from growing more than 7% per year and reducing by half the number of homicides in the country to double the number of cities served by air services through zero the Brazilian housing deficit, ensuring 100% access to sanitation and the population reached five books per capita as the national readership.
At this time, the SAE is expanding what would have been the first attempt to create guidelines for the longer term the country. The Minister Wellington Moreira Franco says that the Plan is being made in 2022 + 10.
Goals should be known in 2013.
Regional inequality continues to drop.
In addition to the enormous growth of the consumer market, with almost 20 million Brazilians until 2022, investments and government record that projection to the economically active population (70%), must lead Brazil to the list of the top five, passing Germany and France.
However, Brazil would be overtaken by India and would be fifth.
Exact placement, however, depend on the rest of the world. If all grow, the chances of the country are smaller rise in the rankings. The National Confederation of Industry (CNI), meanwhile, estimates that the country could have a GDP in 2030 of U.S. $ 4.497 trillion and $ 5.226 trillion, depending on whether the average growth of the country stand at 3.3% per annum - first scenario - or 3.9% in the second estimate. The top four ranking will be, according to the organization, China, USA, Japan and India.
José Augusto Coelho Fernandes, Director of Policy and Strategy CNI believes that the country's future is in the hands of Brazilians:
" 70% believe that the agenda of the country's future is in the hands of the Brazilians. Of course it's better an environment of global growth, but part of our solutions depend on it. We need more education, more innovation, tax reform, labor rules more modern and more investment in infrastructure, regardless of whether or not the worsening crisis in Europe, the U.S. recovery and China's growth" he explained.
Vanessa Corrêa Petrelli, the new president of the IPEA, says that to talk about the future of the country it is necessary to study its recent past. The average growth in Brazil in the last two decades of the last century, of 2.2%, nearly doubled to 4.3% per year between 2004 and 2011:
" During this period investment rose, increased consumption, we take the momentum of the commodities, the government made a strong social policy of income distribution and public banks expanded the credit. The growth reduced inequality between regions, which should be intensified in the next two decades ", says the economist.
Investments need to keep growing strong to account for this expansion. The CNI, for example, indicates that the country will need seven million homes in 15 years, at a cost of $ 60 billion. The wind array will be the third most used in 2020, with more than 6% of the park to generate electricity. Environmentalists want that sanitation is universalized by 2030.
The oil is on the agenda of the country with exploration in the pre-salt. This is one of the biggest bets of the government, he expects the country to be lifted in the next 20 years to the ranking of the big five reserves on the planet that can attract more than $ 350 billion in investments there.
Although it has not got the approval of the project that distributes petroleum resources that will be taken from depths unimaginable until very recently, government and private sector are preparing for the future. The government works for that wealth to be used as a savings from the creation of the Social Fund, which may leave until the end of the year.
To the economist Sergio Besserman, oil has to be the provider of funds for the transition to the economy of the future, which will be based on sustainability:
- We can do what Celso Furtado called dynamic displacement of the center. With a lot of science, technology and low carbon.

Published in Economy
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