Brazil concurs China on need to raise productive capacity: Brazilian diplomat

BRASILIA - Brazil concurs with China on the need to bolster bilateral cooperation to increase productive capacity, a senior Brazilian diplomat said.

Jose Alfredo Graca Lima, Brazil's deputy foreign minister for Asian affairs, is tasked to coordinate Chinese Premier Li Keqiang's visit to Brasilia starting Monday, during which he will meet with Brazilian President Dilma Rousseff on Tuesday.

"We are very honored by such a welcome visit, and we believe it can lead to fruitful benefits for both nations," Graca told Xinhua in an interview.

The two nations are expected to sign a slew of accords during the visit to expand bilateral comprehensive strategic partnership.

Since Chinese President Xi Jinping's visit to Brazil last year, which Graca described as "a milestone in our relations," the two nations have maintained high-level contacts and the premier's trip is a further proof, Graca said.

"Since then, we have continued to cooperate in various fields, and Premier Li Keqiang's visit will be an opportunity to make progress in these projects, and several other new and very promising projects that will certainly strengthen our ties and our cooperation," said Graca.

Brazil and China agree that their initial trade relationship, based on Brazil exporting commodities to China and China exporting manufactured goods to Brazil, has reached its limit, and that it's time to embark on a new stage marked by increased productive integration, with a focus on infrastructure projects and investment, Graca said.

"This assessment concurs with ours, and is in line with our own needs," said Graca, adding that "the quality of exchange can improve substantially if there is an increase in productive capacity."

Increased infrastructure investment, especially in railroads, is expected to raise productive capacity and generate greater dynamism in the economy, while helping to "transport the strategic products Brazil has in abundance," said Graca, referring to its wealth of natural resources.

Among the bilateral projects already underway in Brazil is an electricity transmission line leading from Belo Monte hydroelectric plant in Amazonia toward the south. Projects to build railways, waterways, steel works and hydroelectric plants are under negotiation.

"Chinese knowledge and technology in infrastructure also offer reciprocal benefits," said Graca. "The most emblematic example is the proposed inter-oceanic railroad between Brazil, China and Peru, that could create an export corridor towards the Pacific."

The ambitious project linking Brazil's Atlantic coast with Peru's Pacific coast, could take three to four years to build and requires much planning as well as a framework agreement, but would prove to be "extremely interesting", he said.

In 2009, China became Brazil's biggest trade partner, its leading importer and top exporter, as well as largest foreign direct investor, and bilateral trade relationship has been mutually beneficial, Graca said.

"The importation of low-cost manufactured goods contributed significantly to reducing inflationary pressure ... and meeting the needs of our consumer market," said Graca.

China's investment in Brazil, its largest trading partner in Latin America, reached $18.94 billion by the end of 2014, out of the regional total of 98.9 billion dollars. Bilateral trade volume reached $86.67 billion in 2014 while China's trade volume with the entire Latin America stood at 263.6 billion dollars, according to China's Ministry of Commerce.

Today's changing relationship continues to benefit the two partners by "meeting Brazil's need to add value to its products and allowing China to pass on to another level in its development process", he said.

Being geographically distant, China and Brazil have less of an opportunity to cooperate in political matters than in economic matters. But their coordination in multilateral forums has been constant and they are increasingly consulting each other on matters of global security, Graca said.