(Adds comments by official, second credit for Vale)
By Anthony Boadle and Alonso Soto
BRASILIA, July 17 China expanded its trade
partnership with Brazil on Thursday with $7.5 billion in
financing for Brazilian miner Vale, the purchase of 60 passenger
jets from planemaker Embraer and renewed commitment to invest in
In a raft of energy, finance and industry accords signed
before presidents Xi Jinping and Dilma Rousseff, the two nations
agreed to team up to build railways to help Brazil reduce its
infrastructure deficit and feed China's hunger for commodities.
One project under study is building a railway from Brazil's
Atlantic coast through the Andes to Peru on the Pacific that
could cut the cost of shipping Brazil's grain to China by $30
per tonne, a senior Brazilian official said.
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, making China the South
American nation's biggest trade partner.
"China's two main strategic concerns are energy security and
food security. Brazil is an ideal partner on both counts," said
the official, a cabinet member who asked not to be named.
Xi visited Brasilia after a BRICs summit that set up a new
$100 billion development bank, to be based in Shanghai, that
will fund infrastructure projects, providing developing nations
with an alternative source of funding to Western-dominated
multilateral financial institutions.
In a sign of deepening financial ties between the two
members of the BRIC bloc of emerging nations, the China
Construction Bank formalized acquisition of 72 percent of
Brazilian mid-size lender Banco Industrial e Comercial SA, a
1.62 billion real deal agreed in October.
China's Eximbank extended a three-year $5 billion credit
line to Vale to buy ships and equipment from Chinese companies,
but there was no mention of a solution to an impasse over
China's refusal to allow giant, bulk iron ore carriers used by
Vale SA to dock at Chinese ports.
Vale, the world's largest exporter of iron ore, ships the
vast majority of its production to China.
The Bank of China opened a second $2.5 billion
credit line for Vale to buy Chinese equipment and services.
Embraer, the world's third largest commercial
plane maker, will sell 40 of its E-190 planes to China's Tianjin
Airlines, its biggest client in Asia. The Industrial
and Commercial Bank of China Ltd will buy up to 20
planes under an agreement to provide leasing for Embraer.
China has promised to invest in Brazil for years and but has
delivered little. A $2 billion plan for soy-crushing plant and
storage hub in Bahia announced three years ago is still an empty
field, while China's largest truck maker Dongfeng Motor
Corporation this year shelved a plan for a $450 million factory
after falling out with its Brazilian partner.
The pace of investment could pick up with the new Chinese
focus on Brazil's deficient infrastructure.
State Grid Corporation of China signed an agreement with
Brazil's Eletrobras utility to build high-voltage transmission
lines for the 11,233 megawatt Belo Monte hydroelectric dam under
construction on the Xingu River in the lower Amazon. China Three
Gorges Corporation also signed a partnership with Brazilian
utilities to bid for a new dam project on the Tapajos River.
(Editing by Nick Zieminski)