BRASILIA: Chinese Prime Minister Li Keqiang headed to Brazil on Monday on a three-day visit with a promise of $50 billion in investment for creaking infrastructure as his hosts finalize preparations for next year´s Rio Olympics.
Li, who was due to land late afternoon in the capital Brasilia, will hold talks Tuesday with President Dilma Rousseff, for whom the investment will be a major boon. Brazil´s economy is battling a fifth straight year of poor growth and spiraling inflation.
Li will head for Rio on Tuesday evening to see some of China´s investment in the city, which Brasilia supplanted as the capital in 1960 but which will in August next year welcome South America´s first ever Olympic Games.
On Thursday, Li will continue a Latin American swing designed to increase Chinese influence in the region, heading to Colombia before visiting Peru and Chile.
Chinese investment in Brazil has grown exponentially over the past decade, with the Asian giant becoming Brazil´s main trading partner in 2009.
Trade between China and Latin America as a whole rose some 2,550 percent between 2000 and 2012 from barely $10 billion to $255.5 billion.
Sino-Brazilian trade mushroomed from $6.5 billion in 2003 to $83.3 billion in 2012.
Jose Graca Lima, head of Asian affairs in the Brazilian foreign ministry, said ahead of Li´s arrival that a “second generation” of Chinese investment is under way. The first involved trade in raw materials and the focus now is on heavy industry and infrastructure, he said.
Graca Lima said Friday that Rousseff and Li will ink a series of accords on political and commercial issues, and some 30 investment deals.
One mooted project is a proposed rail link stretching some 3,500 kilometers (2,175 miles) from the key Brazilian port of Santos to the Peruvian Pacific port of Ilo.
Graca Lima said the plan would take some three to four years to realize, but he assured it is “advancing,” despite some environmental groups voicing concern.
The countries are also expected to announce the delivery of 22 jetliners from Brazil´s Embraer to China — part of a larger order of 60 airplanes from the world´s number three commercial aircraft developer.
Brazil has seen its reputation hit by a huge graft scandal at oil giant Petrobras. But the firm received a boost earlier this year when it signed a $3.5 billion financing deal with the China Investment Bank.
“China is fulfilling a desperately-needed role of investor in Latin America and the Caribbean — Brazil desperately needs investment,” says Charles Tang, chairman of the Rio-based Brazil-China Chamber of Commerce and Industry.
“The US back yard is growing a Chinese back garden – not just in Brazil but all over Latin America.”
“We believe in the fundamentals of Brazil,” Tang said.
“China sees opportunities in Brazil for investment and also has the funds available to invest” for strategic and geopolitical reasons.
In an interview, Tang referred to a World Policy Institute essay he penned in 2013 in which he said “Latin America and China´s economies are complementary. Brazil … has insufficient savings to finance increases in export production and job creation or build the infrastructure it needs.
“China has abundant capital — but needs the plentiful strategic resources that Brazil has.”
Li´s visit will feature trade delegations some 130-strong from both countries during his Brasilia stay. In Rio, he will attend the unveiling of Chinese-made trains for a new Metro line.