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 April 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Tanker Trends

MISC Says AET Tankers Unit Not for Sale

MISC Berhad issued a statement today addressing recent market speculation that the company is set to sell its wholly owned petroleum tanker subsidiary AET Tankers.

Strong Tanker Market Extends Peak Season High Earnings

Tanker earnings for crude oil tankers have climbed to new strong levels in the first quarter of 2015, with averages not seen since 2008, the Baltic and International Maritime Council (BIMCO) reported.

Asia Tankers-VLCC Rates Soar

Middle East VLCC rates hit $69,500 a day; daily VLCC rates average $51,000, highest since 2008 (Clarkson). Rates for very large crude carriers (VLCCs) on a key

Bulk Carrier Trends

The German Shipbuilding Rebound

German shipbuilding has made a significant turnaround. The country’s shipbuilding industry has seen increases in the number of employees, orders and deliveries compared to 2013,

Algoma Central Orders New Great Lakes Ships

Algoma Central Corporation announces $160 million investment in fleet expansion and fleet renewal   Algoma Central Corporation announced that it has acquired

Baltic Index Inches Up on Increased Rates for Bigger Vessels

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, edged higher on Friday on increased rates for bigger vessels.

News

Venezuela Probes ex-minister accused of corruption in Ferry Deals

A former minister in President Nicolas Maduro's government denied in an interview published on Friday accusations of corruption during the purchase of three

Two Rescued from Sinking Shrimp Boat

Two fishermen were rescued from their sinking shrimp boat by a U.S. Coast Guard aircrew Friday off the coast of Saint Simons Island near Brunswic, Georgia.   Watchstanders

IMO: Making Ferries Safer

The International Maritime Organization (IMO) domestic ferry safety conference in Manila April 24 has adopted guidelines to aid the process of reducing the mounting

Government Update

Judge Orders Migrant Boat to Remain in Custody

An Italian judge on Friday ordered that the presumed captain of a migrant boat that sank with the loss of more than 700 lives should remain in custody after prosecutors

Iran Moves Ships, Reducing Tensions Near Yemen

A flotilla of nine Iranian military and cargo ships that U.S. officials feared was carrying arms to strife-torn Yemen sailed northeast in the direction of Iran on Friday,

Rescue Ships Head for Libya, as Migrants Die Also in Balkans

British and German warships made ready to sail for waters off Libya as Europe ramped up rescue operations in the Mediterranean after up to 900 desperate migrants

Logistics

Kenya Eyes Inland Cargo Logistics Hub to Serve Nearby States

Kenya aims to build a cargo logistics hub near the border with Uganda to receive and clear goods through customs that arrive by air, rail or road, easing pressure

Baltic Index Inches Up on Increased Rates for Bigger Vessels

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, edged higher on Friday on increased rates for bigger vessels.

Horizon's Hawaii Business Acquisition Cleared by DOJ

Horizon Lines, Inc. reported yesterday that, after a review by the Antitrust Division of the Department of Justice, Horizon's proposed sales transaction with The

 
 
Maritime Contracts Maritime Standards Navigation Offshore Oil Port Authority Salvage Ship Electronics Ship Repair Ship Simulators Winch
rss | archive | history | articles | privacy | 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: 0.1968 sec (5 req/sec)