China is set to invest up to $8.5 billion in Brazil over coming years as the emerging economic giants forge closer ties in agriculture, mining and metals, a top Brazilian diplomat said on Wednesday. Some of the contracts will emerge when Chinese President Hu Jintao brings some 300 Chinese businessmen to Brazil on Thursday for a four-day visit during which beef, poultry, soya and ethanol trade accords are due to be signed.
"China is interested in guaranteeing supply of goods and improving transport conditions," Mario Vilalva, head of the trade department at Brazil's foreign ministry, told reporters.
Brazil has become a key food and raw materials supplier to China as it undergoes rapid urbanisation and double-digit economic growth.
The world's most populous nation is expected to open its market to Brazilian poultry, beef and ethanol exports. The poultry and beef trade, which China blocked several years ago after disease in Brazil, may be worth $440 million to $600 million a year.
Transport bottlenecks to ship goods to markets like China are seen as a major obstacle to continued rapid growth of Brazil's commodity-led export economy.
China is expected to invest $4-5 billion in the modernisation and expansion of Brazilian railways. Chinese companies are set to invest an additional $3.5 billion in the Brazilian steel and mining sectors, Vilalva said.
Investors are now waiting for Brazil's Congress to approve legislation to set up public-private investment partnerships so they can get a better idea of the terms of future deals.
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