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

Tanker Trends

Stolt-Nielsen Completes Bond Issues

Stolt-Nielsen Limited announced the placement of senior unsecured bonds in a total amount of NOK 1,100 million in a new five-year bond issue carrying a coupon of 3M NIBOR plus 4.

Icebreaker Murmansk Launched at Arctech Helsinki Shipyard

The 16 MW Icebreaker for the Russian Ministry of Transport was launched at Arctech Helsinki Shipyard on March 25th, 2015. Before floating the vessel, she was

Sino-Global Purchases First Tanker

Sino-Global Shipping America, which was recently listed on Nasdaq, is becoming a shipowner.   The shipping agency, logistics and ship management services company

Bulk Carrier Trends

Golden Ocean and Knightsbridge Complete Merger

The merger between Knightsbridge Shipping Limited and Golden Ocean Group Limited was approved today at special meetings of both companies' shareholders.      The new company,

Baltic Sea Freight Index Flat on Muted Vessel Activity

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, remained steady on Thursday due to a muted vessel activity.

Liebherr Opens African Maritime Hub

Liebherr Maritime Cranes celebrated the grand opening of the new sales and service center in Durban, South Africa. The new African maritime hub was opened by a

News

Carnival to Add Nine Ships to Cruise Fleet

Carnival Corporation enters into strategic partnerships to add nine cruise ships to its fleet over a four-year period starting in 2019; shipbuilders Fincantieri

Coast Guard Academy Cadet to Receive Fulbright Scholarship

Stephen Horvath, a first class cadet at the U.S. Coast Guard Academy, was recently granted a two-year Fulbright Scholarship to study renewable energy technologies

Ecochlor Presents BWTS Case Study at CMA

Ballast water treatment technology developer Ecochlor Inc. presented a project case study yesterday at CMA Shipping 2015 in Stamford, Conn. The case study covered

Government Update

US Will Work to Ensure Bab-el-Mandeb Strait Remains Open

The U.S. military will work with Gulf and European partners to ensure the strategic Bab el-Mandeb Strait at the tip of the Red Sea remains open to commerce despite fighting and instability in Yemen,

Kenya Ready to Start Work at Northern Port

Kenya is ready to begin work on the first three berths at a long-delayed port on its northern coast, next to the historic trading town of Lamu, President Uhuru

No More State Funds, Russia Warns its Ship Builders

Russian Deputy Prime Minister Dmitry Rogozin came down heavily on country's shipbuilders criticizing them for doing a poor job to implement instructions from the

Intermodal

Long Beach, LA Collaborate to Improve Cargo Flow

Executives from the ports of Long Beach and Los Angeles held a kickoff meeting earlier this week to begin working together to focus on cargo conveyance strategies

Front Street Unveils New Line of Sailing Yachts

The US builders Front Street Shipyard’s in-house design team is collaborating with yacht designer Bill Tripp to develop a new line of modern sloops that are now available for construction.

Soo Locks Open for Cargo Ships

Despite the chilly temperatures and heavy snowfall the U.S. Army Corps of Engineers opened the Soo Locks for the start of the Great Lakes shipping season.    The Edwin H.

Logistics

Baltic Sea Freight Index Flat on Muted Vessel Activity

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, remained steady on Thursday due to a muted vessel activity.

Long Beach, LA Collaborate to Improve Cargo Flow

Executives from the ports of Long Beach and Los Angeles held a kickoff meeting earlier this week to begin working together to focus on cargo conveyance strategies

Expanded Panama Canal to be Operational by April 2015

The widened Panama Canal is expected to finally be up and running in April 2016, after months of delays and cost overruns, AFP reports. The expansion project area will allow bigger ships to transit,

 
 
Maritime Contracts Maritime Standards Naval Architecture Navigation Pod Propulsion Port Authority Ship Electronics Ship Repair Shipbuilding / Vessel Construction 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: 0.1526 sec (7 req/sec)