May 17, 2015

Planes, Trains & Copper: China’s Premier Goes to Latin America

 

Chinese Prime Minister Li Keqiang visits Brazil, Colombia, Peru and Chile from May 18 to May 26 with a coast-to-coast railway and trade talks on the agenda for his meetings with government and business leaders.

Li’s visit with Brazilian President Dilma Rousseff will complete the BRIC cycle for Chinese leaders, after he and President Xi Jinping last week hosted Indian Prime Minister Narendra Modi just days following Xi’s visit to Moscow.

From 2009 to 2014, China’s demand for raw materials resulted in a trade deficit with Brazil, a leading supplier of iron ore and soybeans, and Chile and Peru, both major copper producers. Since the fourth quarter of last year, the balance swung to China’s favor, according to figures from Brazil’s government.

China MAY buy more airplanes from Brazil, home to Embraer SA. China has already imported more than 100 aircraft from Brazil, according to Tong Daochi, assistant director-general of the Commerce Ministry. China will need another 900 aircraft with 70 to 130 seats in the next 20 years, Paulo Cesar Silva, head of Embraer’s commercial jet business, said in an interview with Bloomberg Television in Singapore.

Another initiative, sometimes referred to as the “Two Oceans” railway, aims to make it easier for cargo to move across South America -- and also provide a faster link to China. Li will sign feasibility documents for the link from Peru’s Pacific coast to Brazil’s Atlantic coast, according to the official Xinhua News Agency. About a third of Brazil’s railways were built at least 60 years ago, Xinhua said.

“This isn’t a one-way plan from China’s perspective, and it’s not correct, as some have asserted, that the only reason for our interest to develop Latin American infrastructure is for our own imports,” said Zhou Zhiwei, executive director of the Brazil Center at the Chinese Academy of Social Sciences