Tuesday, May 19, 2009

Lula Seeks to Revive China Pledge With China Trip (Update2) .Open to the bussines without dollars.

NOTE.- WE RECOMMENDED TO PAY ATTENTION TO THIS useful and acurate INFORMATION in the Caribbean small countries facing credit economy crisis without foreign currency holding basket like actually have, recently, Japan, South Korea and China in comun accord in a way to skipt the dollar or the euro*(*...reinsurer and credit...?) to open bussines everywhere they are not able to do.Latinoamerican and caribbean are targeted by the chinesse inversionist or/and any asian related shareholders. Gualterio Nunez Estrada,Sarasota, Florida, 34233.

By Andre Soliani
May 18 (Bloomberg) -- When China’s President Hu Jintao visited Brasilia four years ago he left Brazilians expecting $7 billion of Chinese investment. So far, they’ve seen $141.6 million or about 2 cents on the dollar.
Today, President Luiz Inacio Lula da Silva, 63, is in Beijing to make another attempt at turning Brazil’s chief commercial rival in Latin America into a partner.
As foreign investment dwindles amid the global credit crunch, Lula is seeking Chinese money that could help blunt his country’s sharpest economic contraction on record. He’ll also push to open China’s markets to Brazilian exports beyond soy, oil and iron.
“China is a threat, but also a great opportunity for Brazil,” Trade Secretary Welber Barral said in an interview in Brasilia. “It’s a competitor, but can be a partner.”
China, the world’s third-biggest economy, became Brazil’s leading trade partner this year after the global recession choked sales to the U.S. Yet China, unlike the U.S., buys almost exclusively raw materials to manufacture goods that compete with Brazil’s finished products, particularly in Latin America.
If Lula’s plans pan out, he’ll return with a $10 billion credit for Petroleo Brasileiro SA, an $800 million loan for the state development bank, and financing for ports and waterways. He expects he’ll be able to open China to Brazilian poultry, Barral said.
‘Chinese Investments’
“I want to present to President Hu Jintao an array of possible Chinese investments in Brazil,” Lula told reporters yesterday in Riyadh before heading to Beijing. “My trip to China is to consolidate a strategic partnership.”
China’s steel sales in the region more than doubled by volume in the past two years while Brazil’s plunged 40 percent, Brazil’s Steelmaker Institute says. Argentina, which bought 71 percent of its shoe imports from Brazil in 2005, now takes more footwear from China, according to Brazil’s shoemaker association, Abicalcados.
That’s led trade and diplomatic contacts to stall in “frustration,” said Luis Afonso Lima, head of the Brazilian Society for Economic Globalization and Transnational Company Studies, a corporate-funded research group in Sao Paulo.
Hoping to break the logjam, Lula is taking business leaders with him on the visit, including executives of Petrobras, Companhia Vale do Rio Doce and Empresa Brasileira de Aeronautica SA.
Regional Ties
Other Latin American countries are also strengthening ties with China. Peru signed a free trade agreement last month, wrapping up more than a year of talks. In March, the central banks of Argentina and China agreed to a three-year, $10 billion currency swap. China recently put $4 billion into a Venezuelan development fund in exchange for oil shipments and Ecuador announced deals for $1 billion of investment.
“A relationship with China is not a choice but a necessity,” said Andre Sacconato, an economist at Sao Paulo- based consulting company Tendencias Consultoria.
During Hu’s visit to Brazil in November 2004, he and Lula signed agreements on investments and on plans to expand the products China would buy from Brazil to include beef, poultry and pork.
Four years later, three commodities -- soy, iron and petroleum -- account for 80 percent of sales.
Meat exports to China dropped to $1.9 million last year from $85.4 million in 2005, the Trade Ministry said in a statement. Meanwhile, Brazil’s total exports of meat jumped to a record $12.3 billion last year.
China, according to central bank figures, has invested $141.6 million in Brazil since Nov. 12, 2004 when Lula, with Hu beside him, said Brazilians could look forward to $7 billion of Chinese financing.
“Given the potential of both economies, the investments both ways could be much bigger,” China’s ambassador to Brazil, Qiu Xiaoqi, told reporters May 7 in Brasilia when asked why the plans hadn’t materialized.
The biggest Brazilian project announced by the Chinese, a joint venture of Baosteel Group Corp. and Vale to build a $3.6 billion steel-slab plant, was canceled in January.
“The Chinese have made Africa their priority,” said Sandra Rios, coordinator of Brazil-China Observatory, a study group created by Brazil’s Industrial Confederation. “They expect to have a bigger political influence in that region than in Brazil.”
‘Market Economy’
Still, Lula hasn’t held up his end of the deal with China, either. He never followed through on a pledge to recognize China as a “market economy,” which would ease the threat of anti- dumping sanctions. Of 71 anti-dumping actions currently in force, 22 are on Chinese products including bicycle tires, table fans, audio speakers and eyeglass frames.
The day after the Trade Ministry reported China had become Brazil’s top trading partner it opened an investigation into imported Chinese blankets.
“Anti-dumping measures aren’t good for the development of international trade,” Qiu said.
A Brazilian advance team has tried to reach accords ahead of Lula’s visit. The talks began with disagreement on even the most basic data. China says it bought $18.8 billion of Brazilian imports in 2007, while Brazil claims the correct figure is $10.7 billion, according to an April 22 statement from the Trade Ministry.
Stocks, Bonds, Currency
The Bovespa index fell 4.7 percent to 49,007.21 last week, led by declines in Cosan SA, which dropped 15 percent, and Gafisa SA, which fell 15 percent. Perdigao SA led gains, rising 10 percent.
The yield on the local-currency bonds due January 2010 fell 12 basis points, or 0.12 percentage point, to 9.44 percent.
Brazil’s real weakened 2.6 percent to 2.1153 reais per dollar.
The following is a list of events in Brazil this week: Event Date
Tax Collection May 18
Unemployment Rate May 21
Mid-month Inflation May 22
To contact the reporter on this story: Andre Soliani Costa in Brasilia at asoliani@bloomberg.net. Last Updated: May 18, 2009 10:13 EDT

No comments:

Post a Comment