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Brasilia (AFP) March 30, 2011 China is rapidly expanding its presence in Brazil, surpassing the United States as the South American giant's biggest biggest investor and trade partner, a report released Wednesday said. Published ahead of a planned visit by Brazilian President Dilma Rousseff to China next month, the report said Chinese firms have announced investments of nearly $30 billion in Brazil, including $8.6 billion currently under negotiation. The energy and mining sectors represented 90 percent of those investments, the report by the Brazil-China Business Council said. But Chinese investors have also made direct or indirect purchases of Brazilian farm lands, especially for soy production. China is seeking "a base for supplies of natural resources," the study said. Brazilian exports to China have also climbed rapidly, jumping from $1 billion in 2000 to $30.7 billion last year. These exports -- mostly in soybeans, iron ore, oil and other commodities -- helped Brazil secure an estimated $5 billion annual trade surplus with China. Most Brazilian imports from China are manufactured products, which soared from $1.2 billion in 2000 to $25.5 billion in 2010. The growth has been so explosive that China replaced the United States in 2009 as Brazil's biggest trade partner. From 2009 to 2010, bilateral trade increased by 52 percent. But "until 2009, Brazil had more investments in China than China in Brazil," noted Norton Rapesta, who heads trade promotion at the Brazilian Foreign Ministry. "Latin America is the last frontier attracting great interest from China, and Brazil is the engine of that dynamic," said Edileuza Reis, Brazil's undersecretary-general for Asian affairs at the Foreign Ministry. Brazil hopes this economic expansion will also yield tangible benefits for the Latin American nation. When Rousseff visits China April 10-15, she will seek a greater presence for Brazilian firms in China, secure more Chinese investment in developing Brazilian industries and reduce Chinese purchases of raw materials, as well as the diversification of Chinese exports. "We want to include more high value-added products in trade with China, but we also need to diversify our investment in China," said Reis.
earlier related report French President Nicolas Sarkozy and Chinese Vice Premier Wang Qishan will open the one-day meeting of finance ministers and central bank chiefs from the Group of 20 leading economies in the eastern Chinese city of Nanjing. US Treasury Secretary Timothy Geithner, International Monetary Fund chief Dominique Strauss-Kahn and OECD secretary-general Angel Gurria will also attend the talks organised by France, which holds the G20's rotating presidency. The meeting -- which comes as the global recovery faces major hurdles such as Japan's quake-tsunami disaster and the ongoing eurozone debt woes -- aims to hone in on key ways to reform the monetary system. The day will feature closed-door group sessions on global capital flows -- which emerging economies including China say are fuelling inflation and driving up the value of their currencies -- and a keynote speech from Strauss-Kahn. Host China has ruled out any discussion of its controversial exchange rate regime, despite ongoing criticism that its yuan is massively undervalued, giving its exporters an unfair trade advantage. Experts including Nobel prize-winning economist Robert Mundell and Cornell University professor Eswar Prasad, a former head of the IMF's China division, will join the discussions. Sarkozy said Wednesday he hoped the seminar would spark a debate about "a hugely necessary reform of the international monetary system". "We must fight against... monetary instability that risks reducing to nothing the competitive efforts that you are all making," the French leader said. Aides close to Sarkozy have however said that no concrete decisions are expected from the seminar. At a meeting in Paris in February, the G20 agreed to a set of indicators to measure economic imbalances between surplus exporters such as China and nations with structural deficits such as the United States. The non-binding indicators gauge internal imbalances, focusing on budget deficits, public debt and private savings. External indicators, meanwhile, look at the trade balance and investment flows, "taking due consideration of exchange rate, fiscal, monetary and other policies," the G20 has said. But China, which has the world's largest foreign reserves valued at more than $2.8 trillion, has baulked at many of the indicators amid fears they could result in more pressure over trade and its currency. In Nanjing, though, such imbalances "will not be at the centre of discussions," one Western diplomat said earlier. French economy minister Christine Lagarde and her Chinese counterpart Xie Xuren will close the conference.
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