Tag Archives: brics

Brazil-China Partnership

Bringing Light to Africa: A China/Brazil Partnership

Brazilian economist and self-proclaimed expert on Chinese-Brazil relations, Ronnie Lins has spoken about his thoughts on economic development between the two countries.

Following the opening of his Chinese blog on one of the most influential Chinese websites, Lins now believes that the economic and trade exchanges between China and Brazil will be more frequent despite the great geographical distance between the two countries and a huge cultural gap currently causing some Chinese companies to suffer risks in the Brazilian market.

China has been Brazil’s largest trade partner since 2009 and Brazil is China’s ninth-largest trade partner worldwide and the largest in Latin America. As trade between Brazil and China has prospered in recent years, more Chinese companies are now investing in Latin America’s largest country.

Talks have now come in to play, according to Lins, to have both nations work together to bring electricity to several areas of Africa as part of the BRICS partnership.

The strategic China/Brazil partnership has been strengthened by the visits of Chinese President Xi Jinping and Premier Li Keqiang to Brazil over the past year, although the two countries remain rivals in some sectors, such as supplying machinery and equipment to develop the electricity network in Africa.

There are vast regions of Africa devoid of electricity network and the UN is now making efforts to remedy the situation. According to a recent report from the Africa Progress Panel, over 600 million people in Africa still do not have access to modern energy, and the energy consumption of the entire Sub-Saharan Africa is lower than that of Spain.

The situation poses a great opportunity for these countries to invest in the important energy market in the African continent, with China already making investments through partnerships which aim to send electricity to rural and isolated African Villages.

In addition, Brazil can be a successful example of a country which invested in clean energy and managed to increase access to electricity in a relatively short time.

Over the past years, Brazil has managed to increase electricity access to 99% of its population taking advantage of renewable sources such as hydroelectric, wind and solar power.

Lins also highlighted the significance of Brazil’s trade with Africa which reached 28.5 billion US dollars in 2013 and that several agreements with the African nations are expected to be signed in the second half of 2015.

“Brazil’s historic connection to Africa and its expertise in essential aspects defined in the UN campaign, such as universalization of access, intense use of renewable energy and efficiency measures, qualify Brazil as an important player to act in this market, which will reach over 400 million U.S. dollars per year until 2030,” Lins said.

Source New China Xinhua and China Daily USA  

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BOCOM in Brazil

China’s BOCOM Seals Deal for Brazil’s Banco BBM

China’s Bank of Communications (BOCOM), the country’s fifth-largest commercial bank by assets, has agreed to buy a controlling stake in Brazil’s Banco BBM, the latest in a string of overseas acquisitions by Chinese banks and brokerages.

BOCOM said it would pay R$525m ($173m) in cash for an 80 per cent stake in unlisted Banco BBM, based on the bank’s book value of R$576m. BOCOM had assets totalling $1.1tn at the end of March.

Although it is the first overseas acquisition for BOCOM, Chinese financial institutions are not opposed to snapping up assets abroad, having spent a total of $4.8bn on 30 overseas deals in 2014, following $5.1bn in deals in 2013.

Most have aimed at positioning Chinese lenders to service Chinese corporate clients overseas. China is Brazil’s largest trading partner and a major importer of Brazilian soy-beans and iron ore.

The Bocom deal came as Li Keqiang, Chinese premier, met with Brazil’s President Dilma Rousseff as part of a tour of Brazil, Colombia, Peru and Chile. At a joint press conference, Mr Li and Ms Rousseff announced more than $53bn worth of trade and investment between the two countries.

Source: Wall Street Journal

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A new BRICS Bank to take on IMF and World Bank

Do you think it will shift the balance of power?

Last week, the BRICS members of emerging economies signed the long anticipated document to create the $100 billion development bank designed to influence western based lending and provide funds to each nations investment in infrastructure and development projects.

Each country will input an equal share into establishing the start-up capital of $50 billion and unlike the IMF or World Bank, have an equal say, regardless of GDP size. The goal is to reach $100 billion and break the dominance of the US dollar in global trade as well as dollar-backed institutions such as the International Monetary Fund (IMF) and the World Bank, both of which BRICS countries have little influence within.

The economies of BRICS members Brazil, Russia, India, China and South Africa represent 42% of the world’s population and account for 11 percent of global capital investment, and trade turnover almost doubled in the last five years. Membership may not just be limited to just BRICS nations, either and could include future members in Other Countries Emerging Markets Blocs, such as Mexico, Indonesia, or Argentina once it Sorts out ITS Debt Burden.

China will contribute the lion’s share, about $ 41 billion, Russia, Brazil and India will chip in $ 18 billion, and South Africa, the newest member of the economic bloc, will contribute $ 5 billion.

The idea is that the creation of the bank will lessen dependence on the West and create a more multi-polar world, at least financially. President Rousseff said “We want equal Rights and Justice…. The IMF should urgently revise Distribution of voting Rights to Reflect the Importance of Emerging Economies globally,”

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