The governments of Brazil and China are expected to sign a memorandum of cooperation in the area of railways to help companies from both countries to establish partnerships to compete for concessions in the country. The objective is to allow Chinese companies, with capital, investment and technological knowledge in the sector, to join Brazilian companies, which are used to operating under a concession regime.
The agreement should be signed during the visit of Chinese President Xi Jinping to Brazil next week. He will be in Fortaleza to participate in the meeting of the Brics group (Brazil, Russia, India, China and South Africa), between the 15th and 16th. Afterwards, Jinping will have a meeting with President Dilma Rousseff, in Brasília.
The China Railway Construction Corporation (CRCC) should look for Brazilian partners to dispute the concession of the stretch between Lucas do Rio Verde (MT) and Campinorte (GO). The China Railway Engineering Corporation (Crec) is interested in working on a railroad project from Maranhão to Peru. The two companies are going to take advantage of Jinping's visit to strengthen contacts with Brazilian companies that may be partners in these undertakings.
Altogether, China has more than 100 km of railways, of which 11 km are high-speed trains. The great difficulty for carrying out investments in this sector in Brazil is that Chinese companies are used to railroad construction projects, while the Brazilian model also involves exploring service concessions. Hence the need to form consortia with Brazilian companies.
More than XNUMX Chinese businessmen are expected to accompany Jinping to Brazil, which should strengthen contacts for the creation of consortia capable of bidding for auctions in areas other than railroads, such as oil and electricity.
“Brazil has become China's biggest trading partner in Latin America. It is the first destination for our investments in the region,” said Xu Ying Zhen, director general of the Ministry of Commerce for Latin America and Oceania. According to her, members of the Chinese delegation that is going to Brazil are "very interested" in making investments in Brazil in the sectors of electric power, automobiles, railways, roads and ports.
The delegation will include technology and internet companies, a sector that receives government incentives as part of a project to diversify Chinese investments abroad. “While we consolidate cooperation in traditional sectors, we can expand in other segments of the economy, such as aviation and technology,” said Zhen.
Baidu, a search engine and technology company, considered the Chinese Google, will develop a page in Portuguese as part of its strategy to approach and enter the Brazilian market. The company chose Portuguese, even before Spanish, as it believes in the potential to grow in Brazil.
Currently, Baidu has 500 million users. In all, the country, with 1,3 billion inhabitants, has 600 million internet users. The company therefore has more than 83% of the market. As Google decided to withdraw from China for disagreeing with the censorship of some search topics, such as, for example, the Tiananmen Square massacre, Baidu, which was already market leader previously, with 70% against 30% of the system American search engine, consolidated the position.
With Jinping's visit, Chinese company Sany is expected to announce a large investment in machinery and equipment. Sany has already acquired land in Jacareí, in the interior of São Paulo, to start production.
Brazil will be the most important country of Jinping's visit to Latin America, which will include Argentina, Venezuela and Mexico. The region is considered strategic for the Chinese government, which traditionally acts through bilateral agreements, in which its position to close deals is always greater – given the size of the Chinese economy – than that of its partner.
"Surely, the visits will safeguard the interests of both sides," said Li Baorong, deputy director general of the Latin American Affairs Department of the Ministry of Foreign Affairs of China. According to him, the visit to the region is important to accelerate China's growth.
According to data from the Commercial Department of the Chinese government, in 2013 trade between that country and the region reached US$ 261 billion. China's exports reached US$134 billion, while imports were US$127 billion.
“The exchange with Brazil occupies more than a third of the commercial exchanges with the region”, said Baorong. “China is Brazil's main trading partner and the main market for Brazilian exports. Even with the difficulties in the world economic situation, in recent years, we have been successful in this relationship.”
The reporter traveled at the invitation of the Chinese government
Source: Valor Econômico
By: By Juliano Basile | from beijing
