![](http://web.archive.org./web/20101029012024im_/http://1.bp.blogspot.com/_69quosc2EDA/TJHeOebMQlI/AAAAAAAABSw/Sy90CHuic00/s400/china_brazil.jpg)
Brazil's huge new port highlights China's
drive into South America
Investments guarantee Chinese access to soy, oil and other badly
needed resources
Wednesday 15 September 2010
The 'super port' in Sao Joao da Barra is the largest port
investment in Brazil and will have capacity for the largest
ships in the world. Photograph: Douglas Engle/Australfoto
Blades slicing through the morning heat, the helicopter
rose from the tarmac and swept into a cobalt sky, high
above Rio's Guanabara Bay.
It powered north-east over deserted beaches, dense Atlantic
rainforest and fishing boats that bobbed lazily in the
ocean below. Then finally, 80 minutes on, the destination
came into view: a gigantic concrete pier that juts nearly
two miles out into the South Atlantic and boasts an unusual
nickname: the Highway to China.
Dotted with orange-clad construction workers and propped up
by dozens of 38-tonne pillars, this vast concrete structure
is part of the Superporto do Acu, a £1.6bn port and
industrial complex that is being erected on the Rio
coastline, on an area equivalent to 12,000 football
pitches.
Reputedly the largest industrial port complex of its type
in the world, Açu is also one of the most visible symbols
of China's rapidly accelerating drive into Brazil and South
America as it looks to guarantee access to much-needed
natural resources and bolster its support base in the
developing world.
When Acu opens for business in 2012, its 10-berth pier will
play host to a globetrotting armada of cargo ships, among
them the 380-metre wide ChinaMax – the largest vessel of
its type, capable of ferrying 400,000 tonnes of cargo.
Millions of tonnes of iron ore, grain, soy and millions of
barrels of oil are expected to pass along the "Highway"
each year on their way east, where they will alleviate
China's seemingly unquenchable thirst for natural
resources.
"This project marks a new phase in relations between Brazil
and China," Rio's economic development secretary, Julio
Bueno, said during the recent visit of about 100 Chinese
businessmen to the port complex, which is being built by
the Brazilian logistics company LLX and should receive
billions of dollars of Chinese investment.
This new phase of engagement with Brazil and South America,
is part of China's "going out strategy" – an economic and,
some say, diplomatic push for Chinese companies, many of
them state-run, to invest abroad, snapping up access to
minerals, energy and food by pouring the country's colossal
foreign reserves into overseas companies and projects.
China is expected to overtake Japan as the world's second
largest economy this year and may already be the world's
greatest energy consumer. Now it is set to become Brazil's
top foreign investor, with its companies plowing $20bn into
the country in the first six months of 2010, compared with
$83m in 2009. A recent study by Deloitte predicted that
Chinese investments in Brazil could hit an average of about
$40bn a year between now and 2014, with companies throwing
money at sectors ranging from telecommunications,
infrastructure and farming, to oil, biofuels, natural gas,
mining and steel manufacturing.
"Relations with Brazil in all areas have entered a new
era," Qiu Xiaoqi, China's ambassador in Brazil, recently
told the state news agency Xinhua.
The surge in China's South American spending is not just a
Brazilian phenomenon. Ecuador has already signed around
$5bn of bilateral deals with China this year, including
$1.7bn to help build a hydro-electric dam and $1bn
investments for oil exploration and infrastructure
projects. That compared with Chinese investment of just
$56m in 2009.
Chinese companies have sunk $1.4bn into mining operations
in Peru this year, while in April Hugo Chávez announced
that the Chinese, already major sponsors of Venezuelan oil
exploration, had agreed to open a $20bn credit-line for the
"Bolivarian revolution".
Michael Klare, author of Rising Powers, Shrinking Planet, a
book about the growing tussle for global resources,
described today's China as "the shopaholic of planet
Earth".
"The Chinese authorities understand that to sustain the
country's continued growth, they will have to ensure that
its industries are provided with adequate supplies of
energy, minerals, and other basic raw materials," he said.
But the "going out" strategy went far beyond business
transactions, he added.
"They seek to fashion a multipolar world in which no single
power – read the United States – plays an overwhelmingly
dominant role. To this end, they seek to bolster ties with
rising regional powers like Brazil and South Africa."
In Sao Joao da Barra, the city nearest to Acu and one of
Rio state's poorest regions, the Chinese presence is being
felt even before Brazil's Highway to China is complete.
Keen to impress, LLX staff at the Açu port lay on hot water
and Mandarin interpreters for visiting Chinese dignitaries.
Sao Joao da Barra's town hall, meanwhile, has started
offering free Mandarin lessons to locals interested in
working with the wave of Chinese guests that is
anticipated.
"You should see a 10-year-old boy saying, 'I understand …
the Chinese are coming and when the Chinese industries come
I want to work for them and if I speak Mandarin I'll have a
competitive advantage on the others'," beamed Eike Batista,
the billionaire entrepreneur behind the superport and one
of the most vocal cheerleaders for Chinese advances into
Brazil. "[It is] wonderful."
Leonardo Gadelha, LLX's CFO, said during a recent tour of
the port: "This is part of a Chinese strategy of going to
the market more and more. They are already a very
considerable presence in Africa and we are now going
through this moment in Brazil."
The Highway to China lay "in the middle" of this blossoming
relationship with China, he said, adding: "We are betting
that … this will continue growing."
Not all Brazilians, or indeed western governments, share
such enthusiasm.
"There are many in Washington who worry about China's
growing presence in Africa and Latin America and claim that
this poses a threat to America's long-term strategic
interests," said Klare, noting, however, that the US'
"fixation" with Afghanistan and the war on terror meant
there had been virtually no reaction.
In Brazil meanwhile China's arrival has prompted cries of
neo-colonialism. "The Chinese have bought Africa and now
they are trying to buy Brazil," the prominent economist
Antônio Delfim Netto complained in a recent interview with
the Estado de Sao Paulo newspaper, warning that it was a
"grave mistake" to allow a foreign state to buy "land,
minerals [and] natural resources" from another sovereign
power.
Batista, Brazil's richest man, rejected such criticism,
saying: "The association between Brazil and China is a
two-way highway." Chinese companies such as Wuhan Iron and
Steel had committed to helping build a $5bn steel mill at
the port complex, rather than always shipping out primary
resources to process at home, he pointed out. "You want to
get three tonnes of raw iron ore, [so] produce one tonne of
steel in Brazil," he said. "That philosophy is sinking in
and is great for both sides."
Neither would Chinese companies be allowed to flood the
complex with hordes of foreign workers as had happened in
Africa, said Gadelha, the CFO.
"If it was up to them they would bring lots of Chinese
workers as they are used to doing," he admitted. "[But]
Brazil's legislation is very strict in this sense."
Batista suggested that rather than complaining about
China's courtship of Brazil, western powers should urge
their own companies to pay more attention to the region
themselves.
"In the last 15 years or so the [American and European]
CEOs have stopped coming here and that is why they are a
little bit behind," he said. "We are pushing European
companies and saying: 'You're not really understanding what
is happening in Brazil'."
"Don't put Brazil in the same bag as our neighbours," he
added. "We are not Central America. We are not Venezuela.
We are not Argentina."
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Beijing's deals
Brazil In November 2009 Brazilian energy giant Petrobras
signed a $10bn loan deal with China's Development Bank. As
part of the deal Petrobras will guarantee the supply of
200,000 barrels of oil per day to China over the next 10
years. Chinese companies and state banks pumped around
$20bn into Brazil in the first half of this year
Venezuela Hugo Chávez, pictured, unveiled a $20bn credit
line from China's Development Bank to fund the "Bolivarian
revolution" in April
Ecuador The country has already signed around $5bn of
bilateral deals with China this year, including $1.7bn to
help build a hydro-electric dam and $1bn investments for
oil exploration and infrastructure projects. In 2009 direct
Chinese investment in the country was just $56m
Peru Chinese companies invested $1.4bn in mining operations
in Peru during the first four months of this year, making
China the country's second largest trade partner