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China Looking to Play Larger Role in Funding Brazil's Infrastructure

China Looking to Play Larger Role in Funding Brazil's Infrastructure

07/14/2014

 By Paulo Trevisani and Rogerio Jelmayer 

When China's President Xi Jinping travels through Brazil this week, he will see airports and other projects financed mainly by the Brazilian government.

But, with Brazil's economy slowing and government accounts strained, China is looking to play a larger role in funding critical infrastructure to help move South America's largest country forward.

In Brazil for Monday's start of a meeting of the so-called BRICS nations in Fortaleza, Chinese officials are expected to announce investments in Brazil's transportation, energy and food sectors in coming days.

Those projects--which could include railroads, power plants and oil drills--stand to benefit both nations, according to Charles Tang, chairman of the Brazil-China Chamber of Commerce based in São Paulo.

"China has a strong interest in Brazilian commodities, so they want to invest in railroads in Brazil to reduce transport costs," Mr. Tang said. "This is a win-win situation, because the Brazilian government wants to attract investments in infrastructure."

The leaders of the BRICS--Brazil, Russia, India, China and South Africa--also are expected to announce progress on a development bank and a financial-aid fund, both funded by the group.

But, Brazil's relationship with China is expected to be the focus. After the BRICS summit ends Wednesday, Mr. Xi is staying on for a state visit.

Brazil's Trade and Development Minister Mauro Borges said the nations are looking to change the way the two countries interact economically. Brazil wants to export more higher-valued products to the Asian nation. China is Brazil's largest trading partner, having bought $21.8 billion in Brazilian exports last year, mostly commodities such as iron ore and soybeans.

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