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Chinese Project of US$ 100 Billion in South America Promises to Attract Companies, Generate New Jobs, and Bring Major Investments to Brazil.
Although South America is thousands of miles away from China, the ties between these regions are rapidly tightening thanks to a new and ambitious agreement between Brazil, Peru, and China. This revolutionary project promises to transform forever how South American countries trade with the Asian giant. With a billion-dollar value, the Chinese project will not only bring direct benefits to Brazil and Peru but will also have a positive impact throughout the South American continent. Discover how this partnership could reshape the region’s economic landscape in the coming years.
Understand the Relationship Between Brazil and China
Before we see how this will happen, we need to understand some hidden clauses in the contract for the Chinese project in South America.
During the 21st century, China has expanded its influence around the world in search of resources and partners to fuel the rapid growth of its economy. This happened with investments in neighboring Asian countries but quickly extended to other parts of the world.
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Chinese companies are sharing factories in Brazil to avoid import taxes, reduce costs, and use the country as a production base to sell cheaper in the domestic market.
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Usiminas closed a contract to supply 5,200 tons of special steel for the four most advanced frigates the Brazilian Navy has ever built — each ship carries 1,300 tons of plates that need to resist the sea and explosions.
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Two African countries will inaugurate in 4 days an 825-meter bridge suspended 90 meters high over a reservoir — it is the largest of three bridges of a megaproject that will supply millions of people.
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To solve a drought that threatened 185 million people, China built a 2,700 km artificial river with 13 pumping stations, which today supplies 70% of all the water that comes out of Beijing’s taps.
However, in recent decades, Chinese expansion has advanced exponentially, especially here in South America, and a trade agreement between China and Brazil proves this. In 2002, the trade flow between the two regions was around US$ 12.2 Billion.
This number increased to approximately US$ 80 Billion in 2010, and currently, trade between China and Latin America has already surpassed an incredible US$ 450 Billion, which is 30 times greater than it was in 2002.
The Importance of Brazilian Industry to China
South America has proven to be extremely important for China, as this is where the Chinese buy a large part of the soy, iron, copper, and oil that their economy needs. This is one of the main reasons for the Chinese project in South America, including the oil extraction project in Venezuela and the mining of iron and copper in Chile.
However, the main focus of Chinese investments is truly Brazil, and looking at the numbers makes total sense, as about 35% of the country’s exports go to China, and based on these and other numbers, the Chinese decided to invest in a mega project to connect South America with the Asian giant.
To implement this Chinese project in South America, where China would be buying Brazil, state-owned companies such as China Railway Construction and China Communication play a key role in connecting Brazil to the Pacific Ocean and allowing our country to both import and export through the two oceans closest to its borders, the Atlantic and the Pacific.
Chinese Project in South America is Essential and Brings Various Benefits
The mega project from China in the South American continent is essential, making our country a key trade partner to supply the Chinese economy due to the high production of commodities such as sodium, iron ore, and soy.
Soy is especially important for China, as it helps to meet the demand for pig feed, with over 90% of the soy exported from Brazil going directly to China.
Additionally, the iron ore extracted in Minas Gerais and Pará feeds giant steel factories in China, and by establishing a direct route between these continents, the so-called trans-oceanic route significantly reduces logistics costs and transport time, making trade between these countries more efficient and advantageous for all involved.
Eu me perguntaria, esse tempo todo que o Brasil ficou atrelado aos ianques ,oque o Brasil ganhou de bom? Dívida externa? Só se for