China, Brazil to boost railway cooperation: Xi
November 16, 2014, 5:45 am

The relationship between China and Brazil has “a promising future”, Xi told Rousseff on the sidelines of the Group of Twenty (G20) Summit in Australia [PPIO]

Chinese President Xi Jinping met his Brazilian counterpart Dilma Rousseff in Brisbane, Australia on Sunday, calling for early substantial progress in China-Brazil railway cooperation.

The relationship between China and Brazil has “a promising future”, Xi told Rousseff on the sidelines of the Group of Twenty (G20) Summit in Australia.

“Both sides should continue to work together to achieve more results in bilateral cooperation and promote trade facilitation and liberalization,” said Xi.

Xi is pushing to close China’s participation in building freight rail and high-speed rail in Brazil. Brazil is looking for investors for a $2.4 billion railway project that will link the center and western parts of the country. China Railway Construction Corp (CRCC) and the China Railway Engineering Corp (CREC) has already shown interest in investing in the project, according to a BNamericas report, an online Latin American business publication.

Peru, Brazil and China are also eyeing a planned railway crisscrossing the South American continent.

Amongst the deals inked in July this year between Rousseff and Xi was, most significantly, a railway spanning the continent from Brazil’s Atlantic coast to Peru’s pacific ports, which woud significantly reduce the costs and time required for Brazil to ship raw commodities to China.

Chinese President Xi Jinping and Brazilian President Dilma Rousseff signed 32 agreements in July this year in commerce, education, civil aviation and energy, including a deal that will see Brazilian company Embraer sell 60 E-190 jets to China.

China is Brazil’s biggest trade partner, with bilateral trade between the two reaching $83.3 billion, up 10% on 2012, and expected to exceed $90 billion this year.

But those figures have been disproportionately driven by growth in China’s infrastructure and consumer market, and concomitant growth in its appetite for mineral and agricultural commodities, in which Brazil is rich.

Meanwhile, China exports to Brazil are largely value-added consumer goods, which cost Brazil more while diminishing the country’s capacity and motivation to nurture its own manufacturing industries.

Xi has proposed that a trilateral work group navigate their cooperation in all related aspects, including the planning, design, construction and operation of the transcontinental rail.

China wants to enhance coordination with Brazil within BRICS and on issues such as climate change, Xi said on Sunday in Brisbane.

Xi has also invited Rousseff to participate in the first ministerial meeting of a China-Latin America forum to be held in Beijing next year.

Rousseff said her government is committed to setting up a working team for the transcontinental South American railway at an early date. Over the past year, the Brazilian government has announced plans for a slew of infrastructure projects, including the extension of airports and ports, the building of 11,000 km of railway and 7,000 km of highway.

Brazil is also eyeing Chinese investment in oil and gas, new energy, satellite and information technology, said Rousseff.

Xi and Rousseff arrived in Brisbane late Friday for the G20 Summit. Xi will also travel to Canberra for a state visit during which he and Australian Prime Minister Tony Abbott will announce the launch of a critical China-Australia FTA.

TBP and Agencies