Luiz Inácio Lula da Silva, president of Brazil, with a delegation of 240 businessmen went to China for a visit aimed at strengthening Brazil's strategic partnership with China. The countries are celebrating the 35th anniversary of the establishment of diplomatic relations.
Increased trade, oil contracts, meat exports, the sale of Embraer aircraft plus Chinese financing to help develop its ambitious hydrocarbons program were part of the agenda addressed by the two presidents, Lula and Hu Jintao.
The two leaders also addressed an initiative to have bilateral trade, currently in US dollars, to be replaced by the Chinese Yuan and the Brazilian Real as trade currencies. In the past few months, China has edged out the United States as Brazil's largest trading partner.
Brazil and China, the two biggest developing countries and two of the BRIC nations, have built a steady relationship since the strategic partnership was established in 1993. said Zhou Zhiwei, an expert in Brazil Studies from the Academy of Social Sciences.
"As the two largest developing countries and major players in the world community, the two nations share a lot of common ground and consensus in dealing with international affairs," added Zhou Zhiwei.
He pointed out that both countries have a firm stand against protectionism and look to reform international financial institutions to give a bigger say to developing countries.
"Brazil is active in resuming the stalled World Trade Organization Doha round talks in order to ease the fallout from the global financial downturn, and China's cooperation is essential," said Zhou.
From the Brazilian side Chinese financing for the ambitious US$ 174 billion five-year investment plan to turn Brazil into one of the world's leading oil producers was on the table. China is expected to lend Brazil US$ 10 billion in exchange for 200.000 barrels of oil per day.
"There's nobody in the US government we can sit, talk and decide as we do with the Chinese," admitted Petrobras CEO Sergio Gabrielli. China's direct loans have become a potent tool to ensure the supply of much needed natural resources for the world's third largest economy.
When three quarters of global oil reserves are in the hands of government companies, oil industry negotiations are becoming increasingly political and China can use its leverage to curtail the influence of the big private oil companies.