China seeks to build railways in Brazil to ship out commodities

BRASILIA, (Reuters) – Brazil hopes that during a visit by Chinese President Xi Jinping it can boost ties with its biggest trade partner beyond the exchange of commodities for manufactured goods, but that may be wishful thinking.

Accords China will sign with Brazil when Xi meets with President Dilma Rousseff today focus on improving infrastructure to make sure raw materials China is hungry for make it to port, with railways a top priority.

Brazilian officials are portraying Xi’s state visit as a milestone in deepening a strategic partnership that will lead to Chinese investments in Brazil’s manufacturing industry.

Trade between China and Brazil soared to $83.3 billion last year from $3.2 billion in 2002, with iron ore, soy and oil making up the bulk of Brazilian exports. The Chinese have been making investment promises for years and failed to deliver. Three years after announcing plans to invest $2 billion in a soy-crushing plant and a giant storage hub in western Bahia, Chongqing Grain Group Corp has only managed to bulldoze a 100-hectare (250-acre) field.

There have been few success stories in the trickle of investment that has come in. Dongfeng Motor Corporation, one of China’s largest automotive groups, has shelved a plan to build a 1 billion Brazilian reais ($450 million) truck factory in Brazil after falling out with its Brazilian partner.

Analysts say the Chinese are not interested in investing in manufacturing in Latin America, especially in Brazil where labor costs are high and regulatory hurdles abound.

“The Brazilians have to understand that Brazil is not terribly attractive,” said Riordan Roett, Western Hemisphere director at the Johns Hopkins School of Advanced International Studies in Washington. “There is no growth in credit and the government has not delivered on promises to improve infrastructure. The Chinese are very much aware of that.”

Unless Brazil can become more competitive, Chinese investment will go to Asian countries, or those in the burgeoning Pacific alliance, like Mexico, Roett said.

Brazilian officials say China wants to enter partnerships to build railways to ship grains and minerals to Brazilian ports.

Projects under consideration include railways to the ports of Ilheus in the state of Bahia and Itaqui in Maranhao, which are closer to the Panama Canal and would lower freight costs.

 

China is also interested in studying a railway across the Andes to the Pacific coast of Peru, which could shorten the trade route significantly, a trade ministry official said.

 

Brazilian officials expect no progress during Xi’s visit in resolving an impasse over China’s refusal to allow giant, bulk iron ore carriers used by Brazil’s Vale SA to dock at Chinese ports, forcing the miner to transship cargoes from ports in the Philippines and Malaysia and increasing its costs.

 

Brazilian efforts to manufacture goods in China have also run into problems. China has not approved plans by Brazil’s biggest bus maker Marcopolo to build a factory or plane maker Embraer to refit its plant in Harbin to make E-190 passenger planes.

Comments  

Boston march against hate speech avoids Charlottesville chaos

BOSTON (Reuters) – Tens of thousands of people took to the streets of Boston yesterday to protest a “free speech” rally featuring far-right speakers a week after a woman was killed at a Virginia white-supremacist demonstration.

Trump, first lady will not attend Kennedy Center Honors -White House

WASHINGTON, (Reuters) – US President Donald Trump and first lady Melania Trump will not attend the Kennedy Center Honors in December, the White House announced yesterday, after several honorees said they would boycott a White House reception before the show.

Spain hunts for driver in van rampage, says Islamist cell dismantled

RIPOLL/BARCELONA, Spain (Reuters) – Police were searching yesterday for the driver of a van that killed 13 people when it ploughed into a crowd in Barcelona and were trying to determine whether two other suspected Islamist militants linked to the attack had died or were at large.

Nigeria’s Buhari returns home after three-month sick leave in Britain

ABUJA (Reuters) – Nigerian President Muhammadu Buhari returned home yesterday from three months of medical leave in Britain where he received treatment for an unspecified ailment.

Trump dumps controversial chief strategist Bannon in latest upheaval

WASHINGTON/HAGERSTOWN, Md., (Reuters) – President Donald Trump yesterday fired his chief strategist Steve Bannon in the latest White House shake-up, removing a far-right architect of his 2016 election victory and a driving force behind his nationalist and anti-globalization agenda.

Your browser is out-of-date!

Update your browser to view this website correctly.

We built stabroeknews.com using new technology. This makes our website faster, more feature rich and easier to use for 95% of our readers.
Unfortunately, your browser does not support some of these technologies. Click the button below and choose a modern browser to receive our intended user experience.

Update my browser now

×