Brazilian president on trade-heavy visit to China

AP News
Posted: Apr 12, 2011 10:13 AM
Brazilian president on trade-heavy visit to China

Brazilian President Dilma Rousseff began a state visit to China on Tuesday at the head of a push by Latin America's biggest economy for more favorable economic ties with its biggest trading partner.

Rousseff's trip is her first to China since taking over from close Chinese ally Luiz Inacio Lula da Silva on Jan. 1. She already has shown herself more sympathetic than her predecessor to Brazilian businesses who are concerned about losing out to Chinese competitors.

Smoothing Rousseff's way, Brazilian plane maker Embraer on Tuesday announced the sale of 30 of its 190 regional passenger jets to Chinese operators in a major boost for the company's prospects in the increasingly competitive China market.

One-year-old airline Hebei Airlines agreed to buy 10 of the 99-seat planes, while CDB Leasing Co. ordered 10 for use by major carrier China Southern in the far northwestern region of Xinjiang, and signed a letter of intent to buy 10 more, Embraer said.

Along with an earlier order for 10 of Embraer 190s, the new deal brings the total value of CDB Leasing's planned purchases of 30 of the planes to $1.25 billion, Embraer said. No figures were given for the amount to be paid by Hebei Airlines.

Meeting Tuesday afternoon with Chinese President Hu Jintao, Rousseff emphasized the importance of bilateral ties to the South American and East Asian regions as a whole.

"I think the opportunity presented by my trip to China is also very good because it can help our two countries' development, showing the importance of our bilateral dialogue," Rousseff said in opening remarks at the Great Hall of the People, the seat of China's legislature in central Beijing.

Calling Rousseff a "good friend" of the Chinese people, Hu said her visit brought "new vitality to and makes a new contribution to the development of China-Brazil ties."

Their meeting was followed by a signing ceremony for a number of commercial agreements, including by national electric company Eletrobras and state-run energy giant Petrobras.

In total, the two sides signed more than 20 cooperation agreements in areas including hi-tech, energy, aviation, education and agriculture sectors, the official Xinhua News Agency reported. Among the deals was a joint research and innovation center on nano technology and plans for cooperating on bamboo technology and water resources, it said.

China is Brazil's top trading partner, and bilateral trade volume has jumped by 20-fold over the past decade.

Brazil recorded a $5 billion trade surplus with China last year, but that was driven by exports of iron ore and other commodities, stoking worries that its industrial sector was being left behind.

Those worries are sharpening a split within Brazil's government between those who view China as a powerful strategic political partner and those who see it more as an economic rival. Many critics in Brazil have joined those in the U.S. and elsewhere in accusing China of deliberating undervaluing its currency to keep its exports cheap.

During Silva's eight years in office, Brazil took on a more muscular foreign policy and pushed hard for ties between emerging markets. But Rousseff's administration appears to be giving more voice to those within the government who consider China, the world's No. 2 economy, a threat to Brazilian industry.

Chinese Foreign Ministry spokesman Hong Lei dismissed any problems in the relationship between China and Brazil as "temporary and local."

"We believe, with the increasing growth of our respective capacity and through equal dialogue and consultation, relevant issues will be gradually and properly handled," Hong said at a news conference.

China welcomes more goods from Brazil, especially value-added products, Hong said.

Rousseff is leading a delegation of business leaders from many of Brazil's top companies on her six-day trip to China, which includes a meeting of the BRICS developing economies in the southern resort city of Sanya.