China and Brazil sealed their expanding commercial partnership on Thursday with a $5 billion credit line for Brazilian miner Vale and the purchase of 60 passenger jets from Brazilian planemaker Embraer.
In a raft of energy, finance and industry accords signed before presidents Xi Jinping and Dilma Rousseff, the two nations agreed to join forces to build railways to help Brazil cut its infrastructure deficit and feed China's appetite for commodities.
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, making China the South American nation's biggest trade partner.
China's Eximbank extended a $5 billion credit line to Vale to buy ships and equipment from Chinese companies, but there was no mention of a solution to an impasse over China's refusal to allow giant, bulk iron ore carriers used by Vale SA to dock at Chinese ports.
In a sign of deepening financial ties between the two members of the BRICs bloc of emerging nations, the China Construction Bank formalized acquisition of 72 percent of Brazilian mid-size lender Banco Industrial e Comercial SA, a 1.62 billion real deal agreed in October.
Xi visited Brasilia after a BRICS summit that set up a new $100 billion development bank, to be based in Shanghai, that will fund infrastructure projects, providing developing nations with an alternative source of funding to Western-dominated multilateral financial institutions.
Embraer will sell 40 planes to its biggest client in Asia, China's Tianjin Airlines, half of which will be the re-engineered model known as E-190 E2. The Industrial and Commercial Bank of China Ltd will buy 20 aircraft, under a 2012 agreement to provide leasing for Embraer planes.
The orders for Embraer's current E-190 help to fill a key gap in the planemaker's order book as it develops a next-generation replacement to enter service in 2018.
In 2010, the leasing arm of the Industrial and Commercial Bank of China offered up to $2.5 billion in financing for Embraer planes over five years. At the time, Embraer forecast Chinese demand for 430 commercial jets with up to 120 seats and 635 executive jets over the next decade.
Vale, the world's largest exporter of iron ore, ships the vast majority of its production to China. Vale was not immediately able to provide more details on how the credit line would be used.
Although China has promised to invest in Brazil for years and failed to deliver, the pace of deals is picking up with a focus on deficient infrastructure.
State Grid Corporation of China signed an agreement with Brazil's Eletrobras utility to build high-voltage transmission lines for the 11,233 megawatt Belo Monte hydroelectric dam under construction on the Xingu River in the lower Amazon. China Three Gorges Corporation also signed a partnership with Brazilian utilities to bid for building on a dam project on the Tapajos River.
Cooperation in railway projects is expected to lead to the construction of new rail lines from Brazilian agricultural frontiers and mining areas to the Atlantic coast, cutting travel time to China and freight costs.
(Reporting by Anthony Boadle and Alonso Soto; Editing by Nick Zieminski)