Oil and Steel Industries to Benefit
This is the third in a series of posts dedicated to the BRIC countries. While the late John Hughes would have appreciated the titular tribute to his Breakfast Club classic, the series is meant to stimulate a robust discussion among those interested in the subject.
For the uninitiated, BRIC is an acronym coined by Goldman Sachs to refer to the red-hot economies of Brazil, Russia, India and China. According to the investment group’s projections, the BRIC countries could become among the four most dominant economies by the year 2050.
Part I of this series centered on Brazil with the post Hey Brazil–Take Your Time With Those BITs, I Can Get Them Somewhere Else! Part II of the series focused on India with the article India Needs Massive Investment in Physical Infrastructure to Catch China Growth.
Let’s move on to Part III with some brief yet interesting news concerning China and Brazil.
Steel and Oil Deal
The two countries signed a series of trade and investment agreements today at the BRIC summit taking place in Brazil. The deals are aimed at boosting trade and energy cooperation between the these emerging giants. Expect to see more of these deals in the near future.
The biggest deal announced was China’s pledge to build a steel plant at a Brazilian port. The steel plant would be China’s biggest investment ever in the Latin American country. Under the agreement, China’s Wuhan Iron and Steel will build a plant in a port in Rio de Janeiro state with Brazilian logistics firm LLX Logistica.
Another major announcement was the strategic development deal reached between China’s Sinopec and Brazil’s state-run oil giant Petrobras.
The agreements reached in the steel and oil industries are not surprising.
Among other things, Brazil’s recent discovery of vast offshore oil reserves has opened a new area of potential cooperation with resource-hungry China, which last year agreed to lend $10 billion to Petrobras in return for guaranteed oil supply over the next decade.
Trend to Watch: Look for Stronger Ties to be Forged Between China and Brazil in the Next 18 Months