China Seeks to Build Shipping Railways in Brazil

Posted by Eric Haun
Wednesday, July 16, 2014

Brazil hopes that during a visit by Chinese President Xi Jinping it can boost ties with its biggest trade partner beyond the exchange of commodities for manufactured goods, but that may be wishful thinking.

Accords China will sign with Brazil when Xi meets with President Dilma Rousseff on Thursday focus on improving infrastructure to make sure raw materials China is hungry for make it to port, with railways a top priority.

Brazilian officials are portraying Xi's state visit as a milestone in deepening a strategic partnership that will lead to Chinese investments in Brazil's manufacturing industry.

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 Chinese have been making investment promises for years and failed to deliver. Three years after announcing plans to invest $2 billion in a soy-crushing plant and a giant storage hub in western Bahia, Chongqing Grain Group Corp has only managed to bulldoze a 100-hectare (250-acre) field.

There have been few success stories in the trickle of investment that has come in. Dongfeng Motor Corporation, one of China's largest automotive groups, has shelved a plan to build a 1 billion Brazilian reais ($450 million) truck factory in Brazil after falling out with its Brazilian partner.

Analysts say the Chinese are not interested in investing in manufacturing in Latin America, especially in Brazil where labor costs are high and regulatory hurdles abound.

"The Brazilians have to understand that Brazil is not terribly attractive," said Riordan Roett, Western Hemisphere director at the Johns Hopkins School of Advanced International Studies in Washington. "There is no growth in credit and the government has not delivered on promises to improve infrastructure. The Chinese are very much aware of that."

Unless Brazil can become more competitive, Chinese investment will go to Asian countries, or those in the burgeoning Pacific alliance, like Mexico, Roett said.

Brazilian officials say China wants to enter partnerships to build railways to ship grains and minerals to Brazilian ports.

Projects under consideration include railways to the ports of Ilheus in the state of Bahia and Itaqui in Maranhao, which are closer to the Panama Canal and would lower freight costs.

China is also interested in studying a railway across the Andes to the Pacific coast of Peru, which could shorten the trade route significantly, a trade ministry official said.

Brazilian officials expect no progress during Xi's visit in resolving an impasse over China's refusal to allow giant, bulk iron ore carriers used by Brazil's Vale SA to dock at Chinese ports, forcing the miner to transship cargoes from ports in the Philippines and Malaysia and increasing its costs.

Brazilian efforts to manufacture goods in China have also run into problems. China has not approved plans by Brazil's biggest bus maker Marcopolo to build a factory or plane maker Embraer to refit its plant in Harbin to make E-190 passenger planes.

(Reporting by Anthony Boadle; Editing by Mohammad Zargham)

Maritime Reporter November 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Tanker Trends

NASSCO Cuts Steel on APT "ECO Tanker"

General Dynamics NASSCO started construction of another ship in its commercial shipbuilding backlog, starting construction of a second “ECO” tanker to be built

Oil Prices Retreat from Short-covering Rebound

Global crude prices fell more than $1 a barrel on Thursday, retreating from a short-covering charged rally as traders bet the market had not shaken off a six-month long rout on oversupply concerns.

INTERTANKO Launches ECA Bunker Surcharge Clauses

INTERTANKO’s documentary committee has launched bunker surcharge clauses for Emission Control Areas (ECA).   Rising bunker prices due to rising oil prices and

News

River Bell Awards Acclaim Maritime 'Family'

The Seamen’s Church Institute (SCI) recognized two inland maritime industry leaders at an annual awards luncheon Thursday, December 11, 2014, in Paducah, Ky.   The

Great Lakes Coal Trade Slows in November

Coal shipments on the Great Lakes totaled 2.6 million tons in November, a decrease of 3 percent from a year ago, as shipments were affected by weather-related delays,

BP Faces Heavy Hit from Former Prized Asset Rosneft

BP faces a first and heavy loss from its stake in Russia's Rosneft due to plummeting oil prices and a crumbling rouble, potentially forcing it to write down the value of its once-prized asset.

Government Update

Libyan State Oil Firm NOC Will Remain Independent

Libya's Tripoli-based state firm National Oil Corp (NOC) will remain independent, it said on Thursday, in an apparent attempt to reassure foreign oil buyers it will stay out of the country's conflict.

Italian Shipbuilder Pleads Guilty to Environmental Crimes

An Italian shipping firm based in Genoa, Italy, pleaded guilty to violating the Act to Prevent Pollution from Ships by falsifying required ships’ documents to hide

Bulker Chief Engineer Convicted of Environmental Crimes

A chief engineer from the M/V Trident Navigator was convicted by a federal jury in New Orleans late yesterday after a week-long trial, of knowingly falsifying the

Logistics

Great Lakes Coal Trade Slows in November

Coal shipments on the Great Lakes totaled 2.6 million tons in November, a decrease of 3 percent from a year ago, as shipments were affected by weather-related delays,

Hoists Facilitate Offshore Crane Repairs

When the diesel engine of a deck crane failed, it caused major handling problems for an offshore platform operating in the Dutch sector of the southern North Sea,

Transpacific Container Shippers Plan Price Rise

A container shipping organisation urged companies on Wednesday to raise Asia-U.S. freight rates by at least $600 per 40-foot container (FEU) from Jan. 15, corresponding to an increase of 26.

 
 
Maritime Contracts Naval Architecture Navigation Offshore Oil Pipelines Pod Propulsion Salvage Ship Electronics Ship Simulators Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1086 sec (9 req/sec)