The Economist – September 24, 2011
Protectionism in Brazil
“A self-made siege” - First they went for the currency, now for the land
ON SEPTEMBER 15th Guido Mantega, Brazil’s finance minister, announced a 30-point increase in the country’s industrial-product tax on cars. The amount was startling, but the purpose familiar. Cars that are mostly made in Brazil, Mexico or the Mercosur trade block will be exempt; only importers will pay. “Brazilian consumption has been appropriated by imports,” he said in announcing the tax.
According to the National Carmakers’ Association, poor infrastructure and pricey credit and labour mean that making cars is 60% more expensive in Brazil than in China. Local manufacturers have long relied on high tariffs. Imports are gaining market share, from 16% of sales in 2009 to 23% this year. The new measure will probably reverse that trend, since it will increase the price of imports by a quarter.
The government has taken small steps to help local firms. In August it cut payroll taxes for a few labour-intensive industries. But mostly it has tried to keep out foreign goods and capital. Mr Mantega says Brazil is “under siege” from imports. Last month the government tweaked procurement rules to favour local products (Chinese-made army uniforms were an irritant). In the past year Mr Mantega has raised taxes on foreign capital. He wants the World Trade Organisation (WTO) to let countries levy tariffs on imports from places that artificially weaken their currencies.
This muscular approach continues a practice of rewriting rules to favour locals. Foreign firms can only pump oil in the recently discovered pré-sal oilfields as junior partners of the state-controlled Petrobras. Previously they could bid for all concessions on equal terms. Tax breaks will soon make locally built tablet computers a third cheaper than imports, leading Foxconn to set up a Brazilian plant to make iPads. The national development bank, BNDES, has transformed from a stodgy local lender into a chooser of national champions. Its loan book is now twice as big as the World Bank’s, and it funds foreign buying sprees by Brazilian firms.
Farmland is being treated as a strategic asset on a par with oil. Last year, spooked by the idea of foreign sovereign-wealth funds and state-owned firms buying up vast tracts, the government resurrected a 1971 law limiting the amount of rural land foreigners can buy. It was revived even though in the 1990s it was deemed incompatible with the new democratic constitution and open economy. The details are under review: foreigners may be allowed to buy a bit more without restriction, and still more if the government thinks it is in the national interest. But there is no timetable for passing a new law. The Brazilian Rural Society estimates that $15 billion of planned foreign agriculture investments are being dropped.
The strength of the new protectionist mood can be gauged by the government’s willingness to tolerate legal uncertainty and collateral damage. It reintroduced the antique land-ownership law despite knowing that its flawed design would almost halt much-needed foreign investment. Since it limits the total share of each district that can be owned by foreigners, many land registries are playing it safe and rejecting all foreign purchasers. Kory Melby, an agricultural consultant, advises foreigners on land purchases in Brazil. He says he has heard from furious sellers whose deals are now “as good as garbage”.
Car importers are mulling a challenge to the tax increase at the WTO. At issue is whether a tax that can be avoided by producing locally is an import tariff in disguise. Their trade group is trying a different legal tack: it says that the government was obliged to give 90 days’ notice (it gave only one). Chinese carmakers building Brazilian factories are lobbying hard. They say that they will be unfairly hit, since ramping up production in a new plant takes years. Foreigners whose plans are less advanced may opt for a complete rethink.
Source: http://www.economist.com/node/21530144
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Ricardo C. Amaral: Regarding the above article from “The Economist” magazine, Brazil's Finance Minister Guido Mantega has been doing the right moves to protect the Brazilian market from the “hot money” and the Brazilian businesses regarding the “currency war” that has been going on.
I agree 100 percent with President Dilma Rousseff request: “Brazilian President Dilma Rousseff made on Friday her strongest call yet for the central bank to continue cutting borrowing costs in Brazil.”
On August 31, 2011 Central Bank President Alexandre Tombini cut the Selic rate by a half-point to 12%, and he should cut even further in the coming months as the global economy deteriorates very fast as the global economy moves to the new stage of the first great depression of the 21st century.
During the great depression of the 1930's we had the stock market collapse of 1929, then in the following 3 years the stock market bounced back, then in 1932 started the real nasty decline that sunk the stock market and the US economy into the bottom of the abyss.
Today, we have reached that special 1932 turning point: the point where the stock market and the US economy it will sink like the Titanic.
What I am saying is: we are entering the catastrophic phase of the new great depression, and we are going to have real rough years ahead of us. It's not going to be a pretty sight.
You can bet on that!!!!!!!
By the way, this new great depression that is underway, it will be a lot worse than the great depression of the 1930's.
The Brazilian government is right as the article said: “Farmland is being treated as a strategic asset on a par with oil.”
I wrote a lot on these subjects the last few years, when I called for the “renationalization of Petrobras” in one of my articles, and I wrote also regarding farmland in Brazil and how it should be treated as an strategic asset and foreigners should be limited as to the size of farmland they can own in Brazil.
Brazzil Magazine – July 2008 - Why Brazilians Should Demand the Renationalization of Petrobras - Written by: Ricardo C. Amaral
It is not good for the national interest in Brazil to let foreigners own farmland in Brazil, and the Brazilian government should regulate it very closely, and restrict the size of farmland that foreigners can own in Brazil.
In one of my articles I explain in detail how the ball game has changed in the 21st century regarding the subject of freshwater and farmland.
Brazzil Magazine – October 2007 - "The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil" - Written by Ricardo C. Amaral
…The final conclusion is: It's imperative that China move forward in an aggressive fashion and implement with Brazil the plan described in this four-part series of articles. And China should look at it as a matter of national security and future survival.
Monday, 01 October 2007 - Part 1 of 4
http://www.brazzil.com/component/content/article/184-october-2007/9977.html
Friday, 05 October 2007 - Part 2 of 4
http://www.brazzil.com/component/content/article/184-october-2007/9979.html
Thursday, 11 October 2007 - Part 3 of 4
http://www.brazzil.com/component/content/article/184-october-2007/9983.html
Tuesday, 16 October 2007 - Part 4 of 4
http://www.brazzil.com/component/content/article/184-october-2007/9985.html
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Brazzil magazine
Brazzil magazine is the most popular Brazilian magazine published outside of Brazil, and only the major magazines in Brazil have more regular readers than Brazzil magazine.
Brazzil magazine is one of the most successful Brazilian magazines in the Internet, and they reach an average of 50,000 readers per day. Brazzil magazine usually has between 500 and 1,000 readers online about 24 hours per day.
Most of my articles are about Brazilian history, the Brazilian economy, International economics, and foreign affairs, and I receive emails and letters to the editor regarding my articles from people in the United States, Canada, Asia, Middle East, Europe, and also from people in Brazil.
Since Brazzil magazine started publishing my articles about China (Brazzil Magazine - June 2, 2005 “While China Rises the US Falls in Brazil and Latin America” - Written by Ricardo C. Amaral), the market share of readers from China went from “zero” percent in May 2005 to about 45 percent of the readers on a regular basis since that time.
Today the largest number of people who reads Brazzil magazine on a regular basis are from China with about 45 percent market share of the readers of the magazine - And on Brazzil magazine I am reaching the market that I am interested in reaching with my articles – the Chinese market - I am reaching the Chinese market that is important to me and also to Brazil.
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Here is a copy of the comments I posted following my articles regarding China and Brazil and also about the renationalization of Petrobras.
These comments were posted on the Elite Trader Economics forum, but most of these comments and much more were also posted on Brazzil magazine regarding these subjects.
After the publication of these articles at Brazzil magazine, and follow up comments you can see a follow through by the Chinese with concrete transactions regarding their investment in Petrobras, purchase of farmland in Brazil, and much more.
I have no doubt that my articles and follow up comments had a major impact in the business relationship between Brazil and China.
Here are some examples of the comments that followed the articles that I posted on the Elite Trader Economics forum as follows:
The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil
http://www.elitetrader.com/vb/showthread.php?s=&threadid=105680&perpage=6&pagenumber=6
...November 13, 2007
SouthAmerica: I did all I could do at this point regarding my economic development plan for Brazil in partnership with China.
I did send a copy of all the information to the China Sovereignty Fund - the fund responsible to make these investments on behalf of China.
I did send a copy of all the information to all senators and deputados federais in Brazil.
I also sent the information to various members of President Lula's cabinet.
The ball is on their court and let's see if at least a bunch of these people have the foresight and get interested in following up on my economic development plan.
I know that thousands of people are reading my 4-part series of articles on Brazzil magazine.
******
Important - Must read articles about Brazil, China and the future.
If you are interested in Brazil and China then you should read the following articles and join the discussions and comments following the articles.
On March 2, 2007 Brazzil Magazine
“Here Is Why Brazil Should Adopt the New Asian Currency”
Written by Ricardo C. Amaral
http://www.brazzil.com/content/view/9821/80/
These investments should be viewed from China's perspective not just as another investment to maximize its returns on invested amounts. It should be viewed by China as a matter of national security and long-term survival for its people.
Then as a follow up to the above article I wrote a 4-part series of articles detailing a plan for China’s $ 200 billion dollars investment in Brazil.
The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil - Written by Ricardo C. Amaral
Monday, 01 October 2007 - Part 1 of 4
http://www.brazzil.com/content/view/9977/80/
Friday, 05 October 2007 - Part 2 of 4
http://www.brazzil.com/content/view/9979/80/
Thursday, 11 October 2007 - Part 3 of 4
http://www.brazzil.com/content/view/9983/80/
Tuesday, 16 October 2007 - Part 4 of 4
http://www.brazzil.com/content/view/9985/80/
Note: So far there are almost 800 comments from the readers following these articles. Please feel free to join the discussion.
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The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil
http://www.elitetrader.com/vb/showthread.php?s=&threadid=105680&perpage=6&pagenumber=8
...May 20, 2009
SouthAmerica: It is interesting to read the comments following these two articles one year later when we take in consideration what has transpired in the real world since then - (1) the article about China investing in Brazil and 2) the article about Petrobras.
The Coming Renationalization of Petrobras
http://www.elitetrader.com/vb/showt...threadid=131138
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”Brazil Turns to China to Help Finance Oil Projects”
By JOHN LYONS
Wall Street Journal
May 18, 2009
With Credit Markets Tight, President da Silva Hunts for Funding in Beijing, Offering His Hosts Secure Commodity Supplies
SÃO PAULO -- Brazil's oil industry is turning to China for cash in the latest sign of how Beijing's clout is growing amid the global economic downturn.
Brazilian President Luiz Inácio Lula da Silva was set to arrive in Beijing Monday to meet with Chinese President Hu Jintao, who is expected to unleash billions of dollars of credit to help Brazil exploit its massive oil reserves. Brazil will return the favor by guaranteeing oil shipments to Chinese companies.
The nations are being thrust together by the global financial crisis. Brazil's state-controlled oil giant, Petroleo Brasileiro SA, wants to spend $174 billion over the next five years to elevate Brazil into the major leagues of oil-producing nations. With international capital markets on life support, China is among the few remaining sources of cash.
Petrobras, as the company is known, is turning to China at a time when China's appetite for raw materials has lifted economies across commodity-rich Latin America, blunting the impact of the global downturn. In March, China passed the U.S. as Brazil's biggest trade partner.
Brazilian President Luiz Inácio Lula da Silva, at top left with China's Hu Jintao at the G-20 summit in April, and at bottom touring a Petrobras terminal in Rio de Janeiro, is seeking help to exploit Brazil's massive oil reserves.
Terms of the arrangement had yet to be finalized before the Brazilian leader departed, a senior Petrobras official said, although a broad outline of the talks was announced by Petrobras earlier this year. On the table is a $10 billion loan in exchange for as many as 200,000 barrels per day. China's chief goal, however, is to use the loans to win deals to provide services and equipment at a time when Brazil is becoming tougher in dealing with foreign companies, industry experts said.
Even before a deal is done, the months-long negotiations between Chinese and Brazilian officials have illustrated a competitive advantage for China's government-backed companies at a time when credit markets are dry. Underscoring China's importance as a lender of last resort, Brazil engaged China even though many of its past investment initiatives with the nation have ended in disappointment.
"The U.S. has a problem," Sergio Gabrielli, chief executive of Petrobras, said recently when asked about the loan talks. "There isn't someone in the U.S. government that we can sit down with and have the kinds of discussions we're having with the Chinese."
Mr. Gabrielli was referring to the fact that Chinese government banks are willing to extend huge foreign loans to further China's long-term energy-security goals: ensuring diverse global supplies and winning entree into competitive regions for its oil companies. A string of recent oil loans to Russia, Kazakhstan and others has pushed China's total commitments to more than $45 billion.
Such direct government lending is an increasingly powerful tool in an era when three-quarters of the world's oil reserves are in the hands of state-controlled oil companies. By dealing directly with governments in oil-supplier nations, China can use its wealth to reduce the role of big oil
companies -- the traditional intermediaries between oil producers and oil consumers.
"What you are seeing is the new geopolitics of oil, where deals start from a political understanding and cut out the international oil companies," says Roger Diwan, a partner at PFC Energy, a Houston-based consultancy.
To be sure, international oil companies such as Exxon Mobil Corp. and Royal Dutch Shell PLC have important advantages in technology and managerial know-how over state companies. Brazil's most tantalizing oil reserves lie miles beneath ocean, rock and unstable layers of salt. Getting it out likely will require the expertise and muscle of the industry's top companies.
What's more, China's willingness to fund oil projects should ultimately help the U.S. consumer, experts say. Most of the world's oil is sold on the international spot market to the highest bidder. China's willingness to extend credit to oil producers should keep prices from rising simply by increasing the global supply of oil.
Brazil's Petrobras, which is controlled by the government but operates with a free-market ethos and has shares trading on the New York Stock Exchange, is in an unusual position for the global oil industry after notching major oil and gas finds. The company is sitting on far more reserves than it has people and money to pump.
Brazil hatched an ambitious plan to change that, and it has vowed to make it happen even in the downturn. "It's willing to do deals where necessary," says Matthew Shaw, a senior Latin American analyst at Wood Mackenzie, a Scotland-based oil consultancy.
Source: http://online.wsj.com/article/SB124259318084927919.html
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Note: Tom Loyds is a Chinese man who participated on the discussions regarding the articles published at Brazzil magazine.
Our discussions where cordial and civil over time until he changed the tone and became unfriendly during of our discussions, and I answered him accordingly.
Then he started following me everywhere I had articles or postings on the web such as the discussions at RGE Monitor, and at the Elite Trader Economics forum.
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The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil
http://www.elitetrader.com/vb/showthread.php?s=&threadid=105680&perpage=6&pagenumber=9
...May 21, 2009
SouthAmerica: Reply to Tom Loyds
You are a pain in the ass, and you don't even know when your arguments have been shredded into pieces. You are a very poor loser, and you don't know when to go away after you have been beaten badly during our debates on this subject.
Anyway, if you noticed the agreement that China made with the Brazilian government - the Chinese government is lending money to Petrobras in exchange for guaranteed future shipments of oil from Petrobras oil fields to China.
I know you are very narrow minded person and you have a major problem understanding many concepts, but at the end of the day China is not buying Petrobras common stock - China instead made an agreement with the Brazilian government to lend money to Petrobras in exchange for guaranteed future shipments of oil to China - just as I suggested on my articles.
Once again, you are too stupid to be able to get that point.
The Chinese government got the essence of my article and they followed up with the initial step of lending $ 10 billion dollars to Petrobras - this is only the first step on a long term very beneficial relationship to both sides between the Chinese and the Brazilian government.
*****
May 23, 2009
SouthAmerica: Reply to Tom Lloyds
Your comments are continuing to show your lack of intelligence to grasp the essence of the information that you read on the articles about China investing $200 billion dollars in Brazil and the article about Petrobras and the comments that you posted on Brazzil magazine following these 2 articles.
It does not matter how many times I explain in detail to you the essence of these articles – you are not smart enough to understand the subject.
My article suggested that the Chinese government invest long-term money with the Brazilian government in exchange for guaranteed future supplies of commodities including food supplies, oil, other raw materials, and so on…
You said: “They lend it to Brazil and have the right to ask it back and at the same time, moves the oil to China. It is their usual tactics! Nothing new!”
This comment shows once more your lack of intellect to grasp the real substance behind the information that you are reading and you are also completely clueless about the basic facts related to this particular deal between China and Brazil.
You don’t even understand and you don’t have the capability to grasp the unique set of circumstances involving this particular investment transaction between China and Brazil at this time of massive financial crisis around the world.
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Tom Lloyds: The Brazilian government does not even have money to develop the new oil field and asks the Chinese for help. Your stupid mind asks the Brazilian government to nationalize PBR. Where does the money come from? You are the communist of communists!
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SouthAmerica: We already beat to death the subject of Petrobras nationalization on the comments section of Brazzil magazine following the 2 articles about China investing in Brazil and the article about Petrobras.
By the way, regarding my suggestion of the complete oil nationalization in Brazil of Petrobras the oil company - are you implying that oil nationalization is a subject that would make me a communist based on your first-hand knowledge of other oil nationalizations on other communist countries such as in Mexico, Saudi Arabia, Kuwait, UAE, Iran, Bahrain, Norway, and so on…?
Your comments show that you don’t have a clue about the massive scope and size of the new oil finds of Petrobras in Brazil, also the location of all these new oil fields – and finally the risks involved regarding the development of this project and the huge amounts of money that will be required to develop these new gigantic oil fields.
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Tom Lloyds: I do not understand why in today's modern world, why is it so important to point out my great great great grand father is so and so big and important? Who care? I measure you by how you think and how you argue.
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SouthAmerica: This simple concept is probably foreign to you since you are such a simple minded person – but in many places around the world networking with influential groups of people (the influential people who you know) and other family relationships are very important in the process of doing business and it can open many doors that otherwise would be closed to people not connected to these closed networks. (Family relationships such as important politicians, bankers, and business people who are members of your family.)
You asked me who cares?
You seem to care a lot since you whined like a baby on the Brazzil magazine comments section when last fall you and your friends lost your shirt on your investments in Petrobras stock, and you were placing the blame for Petrobras stock sudden decline late last year on my family’s influence in Brazil.
Your comments were so Pathetic that is not even funny.
You are a very poor loser in every way, and you don’t even know when you got your ass kicked and you keep coming back for more.
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The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil
http://www.elitetrader.com/vb/showthread.php?s=&threadid=105680&perpage=6&pagenumber=11
...September 1, 2010
SouthAmerica: When I wrote the enclosed article in 2007, the current deal that is being negotiated in Brazil with The State Grid Corporation of China (SGCC) – that is not what I had in mind.
Brazzil Magazine – October 2007
"The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil" - Written by Ricardo C. Amaral
*****
“State Grid to buy Brazilian power giants”
By Li Woke
People's Daily Online - August 27, 2010
The State Grid Corporation of China (SGCC) will buy seven Brazilian transmission companies from Plena Transmissoras for $1.72 billion, the Beijing News reported Thursday.
State Grid can have access to 3,000 kilometers of transmission lines in Brazil after completion of the deal.
The acquisition, which includes Plena's debt worth a total of $713.78 million, still needs to be approved by Brazilian National Electricity Regulatory Agency.
Covering 88 percent of the country, State Grid is the largest electric power transmission and distribution company in China and the world.
The company has subsidiaries for North China, Northeast China, East China, Middle China and Northwest China.
State Grid is ranked 8th on the Fortune Global 500 list of the world's largest companies by revenue this year, up from last year's 15th.
The deal's target assets include a 100 percent stake in Ribeirao Preto, Serra Paracatu, Poc os de Caldas, Itumbiara and Serra de Mesa and 75 percent stake in Expansion Transmissao de Energia Eletrica and Expansion Transmissao Itumbiara Marimbondo, as well as total liabilities of 1.3 billion Brazilian Real, according to earlier report
Phone calls to State Grid went unanswered.
State Grid initiated the deal through its subsidiary State Grid International Development (SGID), which was set up in 2008 to oversee investments in overseas power transmission projects, electrical equipment procurement services and other related investments.
"The $1.7 billion deal is part of SGID's efforts to exploit overseas markets for State Grid's transmission technology and equipment products and services," the 21st Century Business Herald said.
"State Grid is clearly trying to forge a complete industrial chain with SGID as its platform to turn itself into an international power giant," the newspaper said.
In 2007, State Grid won the rights to operate the Philippine power grid with a $3.95 billion bid for up to 25 years.
Source: Global Times
http://english.people.com.cn/90001/...60/7119563.html
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The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil
http://www.elitetrader.com/vb/showthread.php?s=&threadid=105680&perpage=6&pagenumber=12
...September 10, 2010
SouthAmerica: It looks like the Chinese have been paying close attention to my articles published on Brazzil magazine.
Here is another example:
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Soybean and Corn Advisor - June 29, 2010
“Foreign Ownership of Farmland in Brazil Could be Restricted “
There has been a lot written in the Brazilian press recently about potential changes in the amount of farmland a foreign individual, corporation, or government is allowed to purchase in Brazil. Recent comments by the Brazilian president and various Brazilian senators indicate that something will be done concerning this issue.
What really caught everyone's attention in Brazil was the fact that the Chinese government (through one of its holding companies) purchased several hundred thousand hectares of land in the state of Bahia. Brazilians are uneasy with the concept of foreign individuals buying up Brazilian farmland, but they are absolutely appalled when a foreign government purchases farmland in Brazil.
One of the problems is that it is difficult to determine just how much land has already been purchased by foreigners. In Brazil, if a foreigner want's to purchase land they must have a Brazilian partner who owns at least 1% of the enterprise. As a result, there are Brazilian holding companies who supply this service to foreign buyers. Additionally, some foreign companies set up Brazilian holding companies who purchase the land legally, but in reality, the foreign company still controls the enterprise. This requirement for a Brazilian partnership can hide the true ownership of the land. No one knows for sure how much land has been purchased by foreigners and estimates vary from between 1 to 4 million hectares.
Land ownership in Brazil holds a special place in the heart's of Brazilians. Virtually everyone in Brazil would like to own a piece of land they could call their own. Almost without exception, every wealthy Brazilian owns some rural land. Large ranchers and farmers hold a very special place in Brazilian society. As a result, land being owned by foreigners is almost an affront to Brazilian's pride
It is yet to be determined what the Brazilian Congress will do about this issue, but it is virtually certainty that foreign governments will be prohibited from purchasing farmland. As far as foreign corporation or individuals are concerned, it is more complicated. Brazilians do not mind if actual foreign farmers move to Brazil to buy land and start farming, but they certainly do not like large speculators such as hedge funds, banks, or the super rich coming to Brazil to purchase land just as an investment.
The size of the property in dispute is also important. The Brazilian government might be able to stomach a foreign farmer owning a few thousand hectares on which he actually operates his farm, but I think the era of foreigners purchasing several hundred thousand hectares as an investment will come to an end.
There is also speculation that any new restriction might be made retroactive and that the titles to land already purchased could be revoked. Once again, this will depend on who the foreign owner is and the amount of land in question. It is possible that land purchased by foreign governments would be nullified, but it would be harder to do for smaller properties purchased by individual farmers.
The Brazilian government still encourages foreign investment in Brazil, but investing in farmland may become more difficult in the future.
http://www.soybeansandcorn.com/news...d-be-Restricted
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September 10, 2010
SouthAmerica: I have been posting information on Brazzil magazine for the Brazilian government to restrict the foreign ownership of farmland in Brazil.
My next article will be on that subject, and much more.
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"Big crackdown on foreign firms' land ownership in Brazil"
Morning Star (UK)
Wednesday 25 August 2010
A significant reduction in foreign ownership of land in Brazil was announced on Tuesday by the government.
The Solicitor General's Office confirmed that foreign or Brazilian subsidiaries of foreign companies cannot own more than 5,000 hectares and no holding can exceed 25 per cent of the total area of the municipality where the land is located.
From now on, land owned by foreigners can be used only for farming, cattle-raising or industrial activities that must be approved by the Agrarian Development Ministry.
Attorney General Luis Inacio Lucena Adams explained that the restrictions were necessary to preserve national control over land ownership.
Earlier this year the ministry confirmed that by 2008, 4 million hectares of land were registered under foreign ownership.
http://www.morningstaronline.co.uk/...view/full/94474
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The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil
http://www.elitetrader.com/vb/showthread.php?s=&threadid=105680&perpage=6&pagenumber=13
...October 27, 2010
SouthAmerica: Someone on this forum asked me today how influential am I regarding Brazil.
Keep in mind of all other major countries including the United States, Japan, India, Russia and the European Union – right now China has the best political relationship with Brazil.
By 2013 it is estimated that China would have invested in Brazil over $ 220 billion dollars.
I am not surprised – I wrote the plan.
You can read various articles on that subject right here:
http://brazzilnews.blogspot.com/
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Chinese investment soars in Brazil, with eye on resources
by Anella Reta Anella Reta
AFP – Mon_Oct_25, 2010
SAO PAULO (AFP) – Chinese investment in Brazil is expected to reach 30 billion dollars this year, according to observers -- a sum aimed at securing access to the Latin American nation's oil and other resources.
The inflow has been sudden, and dramatic.
"Up to the end of last year, the amount of Chinese investment in Brazil was tiny, less than 400 million dollars. Over the first half of 2010, it's gone over 20 billion dollars -- and it should hit 30 billion dollars this year," Charles Tang, head of the Brazil-China Chamber of Commerce and Industry in Sao Paulo, told AFP.
Two-thirds of the total coming into Brazil this year will be invested in the oil sector, to which China has privileged access after extending a 10-billion-dollar credit line to Brazil's state-owned Petrobras, and after China's Sinopec bought the Brazilian subsidiary of Spain's Repsol for seven billion dollars.
"China is investing everywhere in the world to ensure it gets the strategic resources it needs. And Brazil, obviously, is important," Tang said.
In return, Brazil gets "capital for its growth and job-creation," he explained.
"China needs the mineral resources, oil and land that Brazil has in abundance," Tang added before predicting that the relationship between the two BRIC economies "has only just begun."
In 2009, China became Brazil's top trading partner, overtaking the United States. Bilateral exchanges topped 36 billion dollars last year.
This year, they will amount to even more, based on Brazilian central bank figures showing trade reached 35 billion dollars in just the first eight months of this year.
Ricardo Anhesini, spokesman for the KPMG consulting firm in Brazil that has helped Chinese companies entering the Latin American nation's market, said there was "a large number of companies interested in selling primary resources, equipment and infrastructure."
The cities of Sao Paulo and Rio de Janeiro drew most of the companies, while others set up in other southern states which also have good transportation systems.
The approaching 2014 World Cup and 2016 Olympic Games in Brazil also were spurring Chinese investment.
"Several companies are here wanting to address the needs for the Olympics and the World Cup," seeking to profit from Beijing's experience in hosting the Olympic Games in 2008, Tang said.
Anhesini said a Chinese delegation was to visit in December to explore investment opportunities in that area.
"We're recommending they come as early as possible so they can adapt to the Brazilian way of doing business," he said.
KPMG reckons that the interest in supplying the sporting events with equipment will boost Chinese investment in Brazil between 2011 and 2013 to $ 223 billion dollars.
http://news.yahoo.com/s/afp/2010102..._20101025193548
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"The China Price" - The best business article I have seen in years
http://www.elitetrader.com/vb/showthread.php?s=&threadid=50167&perpage=6&pagenumber=37
...March 19, 2011
SouthAmerica: I am glad the Brazilian government is restricting the foreign ownership of farmland in Brazil - as I have been suggesting in Brazzil magazine.
*****
http://www.elitetrader.com/vb/showt...zil#post2948667
September 10, 2010
SouthAmerica: I have been posting information on Brazzil magazine for the Brazilian government to restrict the foreign ownership of farmland in Brazil.
*****
Brazil tightens land acquisition by foreigners: ‘speculators and sovereign funds’
Merco Press - Thursday, March 17, 2011
The Brazilian government is tightening a law that restricts the amount of land foreigners can buy. The decree prohibits non-Brazilians from buying controlling shares of companies that own vast tracts of territory in the country, Brazilian Attorney General Luiz Inacio Adams said in a statement this week.
The action is aimed at preventing foreign investors from circumventing the interpretation of a law that restricts their direct acquisition of land. According to O Estado de Sao Paulo the Attorney General Office issued the ruling which has been distributed to state commerce councils responsible for the registration of company agreements. It’s not clear if deals already agreed could be suspended by tribunals.
Since 1971 the Brazilian government has limited the outright purchase of rural farmland by foreigners or companies based abroad for food-security reasons.
The law dictates that foreigners can own no more than one-fourth of a county, and no one nationality can own more than 10%. Under current legislation foreigners could purchase up to 50 modules, ranging from 250 to 5.000 hectares depending on the region and soil yield.
Currently, foreigners own 4.5 million acres (1.8 million hectares) of Brazilian land — a number that has grown 11.5% from 2008, according to the government agency charged with land distribution.
As one of the world’s most important agricultural powers, Brazil last year severely restricted all new farmland investment from abroad amid fears that foreign governments, led by China, were snapping up land in emerging markets to boost their food security.
However with global food prices hitting a record in February, Brazil is also eager to attract new capital to the sector to increase its share of world agricultural exports while continuing to screen out unwelcome “sovereign investors” owned entities, according to Wagner Rossi, the agriculture minister.
“We need to distinguish properly on the one hand between speculators and sovereign funds, which are a threat to our sovereignty, and on the other side, foreign investors who come with good projects” Mr Rossi told the Financial Times in a recent interview.
Brazil is already the world’s largest exporter of coffee and sugar, the second largest grower of soybeans and the third largest exporter of maize. But the need for additional production from the country to help alleviate global food shortages is urgent.
The Brazilian government, under the previous president, Lula da Silva, in 2010 reinterpreted the law to restrict foreign investment in agricultural land after watching foreign governments including China, South Korea and the Gulf states buying land in Africa and elsewhere to increase their food security.
The trend gained notoriety after Daewoo of South Korea attempted to purchase a large chunk of land in Madagascar, which helped to trigger a coup d’état in the African island country.
“Some of these countries are great partners in other areas, but having them buying land in Brazil creates some sort of sovereign risk for us. This is not part of our plan and we are not going to allow that” Rossi pointed out.
Brazil’s grain yield this year was expected to reach 150m-155m tons compared with 149m last year, Rossi said. This would include a bumper soybean crop of about 70m tons.
http://en.mercopress.com/2011/03/17...sovereign-funds
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August 1, 2011
Invitation from China's government to Ricardo C. Amaral
Global Economic Leaders Summit 2011
Date: Sept. 4 – Sept. 6, 2011
Venue: Shanggri-La hotel, Changchum city, Jilin province, China
I am honored to receive an invitation from such a prestigious organization such as yours to participate in the Global Economic Leaders Summit 2011.
Regrettably I am not able to attend due to family obligations at this present time.
China Global Economic Leaders Summit 2011
http://gels.apceo.com/Html/En/
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Author and Columnist: Ricardo C. Amaral
http://brazzilnews.blogspot.com/
He can be reached at:
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