China to invest US$50b in Brazil

[BRASÍLIA] China will invest US$50 billion to help overhaul Brazil's aging infrastructure, the government here announced Thursday, ahead of an official visit by Chinese Prime Minister Li Keqiang.

"There are US$50 billion in new projects," said Jose Graca Lima, Brazil's Undersecretary of State with special responsibility for Asia and Oceania.

"We shall have to await the end of the visit to expand upon which projects," he said.

Battling a fifth straight year of poor growth and engulfed in a political graft scandal involving its state oil giant Petrobras, Brazil is seeking to revamp sagging infrastructure ahead of next year's Rio Olympics, the first Games to be held in South America.

A Brazilian government source said Latin America's biggest economy was determined to overhaul its dilapidated roads, railways, airports and ports.

Mr Li arrives onTuesday in Brasilia on an official visit and will also visit former capital Rio.

The Chinese premier will also visit Colombia, Peru and Chile on a South American swing aimed at building Beijing's influence in the region.

China has been Brazil's chief trading partner since 2009 and one of its main sources of foreign investment.

Bilateral trade jumped by a factor of 13 between 2001 and 2013 when it reached US$83.3 billion.

Brazilian exports moreover outstripped imports from China by US$8.72 billion in 2013 as the South American giant benefited from high Chinese demand for commodities.

That demand has since dipped, putting a brake on Brazilian growth.

Brazilian President Dilma Rousseff, fighting to revive a tanking economy hampered by poor competitiveness and infrastructural neglect, said Wednesday she wanted to see greater trade cooperation between Brasilia and Beijing and would look to strike a free trade accord.

The Chinese cash infusion is set to cover various sectors, including auto parts, transport, energy, ports, hydroelectric power and railways.

The two countries also hope to bring to fruition an ambitious scheme creating an interoceanic railroad stretching across Brazil to Peru, allowing Brazilian exports to be shipped to China.

The proposed rail link would stretch some 3,500km from the port of Santos to the Peruvian Pacific port of Ilo.

Lima said the "complex" scheme would take some "three to four years" to realize but is "advancing."

After arriving in Brasilia on Monday, Mr Li will leave Brazil three days later for Colombia.

AFP