President Dilma Rousseff and Prime Minister Li Keqiang yesterday signed 35 bilateral agreements that have a strong political impact, but without making it clear how much China will effectively invest in Brazil over the next few years.
A good part of the advertisements also symbolize investment intentions, which depend on studies and bids. Even with these constraints, the package of US$ 53 billion brought by the Chinese and anticipated by Valor was celebrated as an asset by the Brazilian government, which seeks to reverse the pessimistic environment with the economy.
"We want to consolidate the relationship with China, based not only on our comparative advantages in commodities, but opening new areas", said Dilma. She cited, in all events in which she participated, the construction of a transoceanic railroad linking Brazil to Peru, an enterprise of 4,7 kilometers in length. A feasibility study for the project, funded by China, should be ready in May 2016.
Immediately, the reopening of the beef market came out and the final confirmation of the sale of 22 jets from the Embraer EJets family to Tianjin Airlines. The deal, which had already been announced last year, depended on the approval of Chinese authorities. At list prices, the contract is worth US$ 1,1 billion and should be extended to a further 18 aircraft, which were part of the original order.
Other agreements, such as the one signed between the state-owned Eletrobras and the China Three Gorges Corporation, indicate the intention to negotiate partnerships in a future auction in this case, the mega hydroelectric plant of São Luiz do Tapajós (PA), which still needs a green light from Ibama .
In the electricity sector, another project demonstrated how the need for strong gestures walked ahead of indispensable procedures. In a ceremony at the Planalto Palace, Dilma and Li laid the foundation stone for the works on the transmission line built by the Chinese State Grid with the Brazilian companies Furnas and Eletronorte, which will drain energy from the Belo Monte plant to consumer centers in the Southeast region. At the time of the ceremony, however, the “linhão” did not yet have the prior environmental license, which attests to the viability of the undertaking and should be released in the next few days. And not even with the installation license, a document necessary for the effective start of any construction in the country.
Thus, even robust, the figure of US$ 53 billion should still be read as an investment intention, as underlined by Ambassador José Alfredo Graça Lima, Undersecretary General for Policy II of the Ministry of Foreign Affairs and one of the main organizers of the visit. “These are projects that have already started, which are maturing or may be financed.”
In addition to investments, the Chinese came with other promises. The biggest one involves financing US$ 50 billion from the state bank ICBC in a list of priority sectors: railroads, highways, ports, airports, renewable energies and housing.
It was defined that Caixa Econômica Federal (CEF) will act as a structuring and manager of the resources. It is not yet known, however, whether this money would come in the form of a fund or a bilateral loan. “We have 60 days to make a proposal for the development of the works”, said CEF's vice-president of finance and control, Márcio Percival. One point still needs more detail: whether the money will be available even for infrastructure projects that do not have Chinese as winners of future bids or as equipment suppliers.
At the last minute, Li made an unexpected suggestion to Dilma: the creation of a bilateral productive cooperation fund, in the order of US$ 20 billion, also focused on productive and infrastructure investments. The subject had not been previously discussed by government technicians and no one dared to go into detail.
For the secretary of international affairs at the Ministry of Planning, Cláudio Puty, all this money announced by the Chinese delegation signals that there are profitable opportunities in Brazil. “And it's something that fits in with the package of concessions that we're going to announce in June,” he noted.
In a speech at the closing of the meeting of the Brazil-China business council, the prime minister sought to allay fears about the Chinese offensive and said that he “will not impose any political condition” on rapprochement with South American countries. He had already made a reassuring message after the signing of acts, at the Planalto Palace, alongside Dilma. "We would like to cooperate to reduce the cost of infrastructure in Brazil and generate local jobs," said Li, in a reference interpreted by diplomats as a response to insinuations that China wants to make labor laws more flexible to export heavy labor to countries receiving investments.
Source: Price
