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Chinese Look Toward Brazil For Cheap Business

Mon, 05/16/2011 - 9:57am
Marco Sibaja, Associated Press

BRASILIA, Brazil (AP) — China's commerce minister said Monday that his nation will ramp up investments in the South American country.

Commerce Minister Chen Deming, however, didn't forecast by how much China's investments in Brazil would increase.

In 2010, Chinese companies invested about $17 billion in Brazil, a dramatic rise from the approximately $300 million invested a year earlier, according to Brazilian economic think tank SOBEET, which tracked the inflows.

China is already Brazil's biggest trading partner, replacing the U.S. two years ago. China consumes vast amounts of Brazilian commodities such as iron ore, soybeans and oil.

Chen, accompanied by about 80 Chinese business representatives, met in Brasilia with Brazil's Foreign Minister Antonio Patriota, along with Trade Minister Fernando Pimentel.

Brazil's attractiveness to Chinese investment is straightforward, Chen said.

"The Brazilian economy is growing, per capita income is growing, Brazil is a country rich in water, land and sun," he told reporters. "Additionally, Brazilian culture is attractive to the Chinese."

Chen said that Chinese automaker Geely, which exports cars from China to Brazil, was interested in building a car plant in Brazil.

Chen said Brazil must overcome key problems if its trade with China is to continue growing. Those issues include improving infrastructure such as ports, roads and airports to more easily get its commodities and goods to market, Chen said.

Pimentel said Brazilian officials discussed one of their favorite topics of recent months: the replacement of the U.S. dollar as the default currency for international trade, and instead replacing it with a basket of currencies.

"We mentioned to the minister the importance of beginning a discussion in international forums about the necessity to change the international monetary standard," said Pimentel, adding that the dollar's loss of value is hurting developing nations.

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