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Planes, Trains and Energy Deals: China’s Visit to Brazil

Image via Flickr by Corvair Owner

China, Brazil and Peru could soon work together to build a railway transportation system. Talks of the system, which will run from the Peruvian Pacific coast to the Brazilian Atlantic coast, concluded on July 23 after a visit that involved the signing of multiple trade-related deals.The trip also included China’s president Xi Jinping’s signing of a South American agreement regarding energy infrastructure and the sales of around 60 Brazilian planes.

According to The Wall Street Journal, “China and Brazil signed a number of deals on Thursday, [July 17] ranging from jet sales to power-grid investments, at the end of a summit meant to showcase a bigger global role for emerging economies. The agreements come as Chinese President Xi Jinping wraps up a visit to Brazil for a meeting of the Brics nations, comprising Brazil, Russia, India, China and South Africa. With China’s growing influence in Latin America, Mr. Xi’s presence far outweighed that of the other visiting leaders, most of whom left earlier in the week.”

The major deal, a $1 billion investment, includes a power grid that involves the State Grid Corp. of China building transmission lines that will positively impact Brazil’s power grid.

While the railway contract is nowhere near finalized, the deals that were signed mark the beginning of what economists hope to be a fruitful trade relationship between China and South America. Previously, China and Brazil had almost no movement between them.

Business Insider reports that trade efforts are already apparent: “Trade between China and Brazil soared to $83.3 billion last year from $3.2 billion in 2002, with iron ore, soy and oil making up the bulk of Brazilian exports.”

The highly anticipated railway will likely be used to export agriculture products and other resources from China and Brazil. Chinese officials hope that any future railway system might cut down on freight costs.

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