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China, Brazil Set Up New Investment Fund To ‘Expand Productive Capacity’

June 19, 2017 (EIRNS)—Despite the economic and political turbulence wracking Brazil, and the uncertainty over whether President Michel Temer will even remain in office, on May 30, in a ceremony in Sao Paulo, Brazilian and Chinese officials officially launched the Brazil-China Cooperation Fund for Expansion of Productive Capacity. Discussions on setting up the fund have been taking place for some time, Xinhua reported.

Stemming from Xi Jinping’s visit to Brazil in 2015, the $20 billion fund, of which China will provide $15 billion, will consider proposals for investment projects in Brazil in the areas of infrastructure, manufacturing, agro-business and high technology, among others. During the signing ceremony, Chinese ambassador Li Jinzhang emphasized that Brazil is "a priority country for the Chinese strategy of expanding productive capacity." The China-Brazil Fund, he said, "offers a guarantee of a financial mechanism to broaden cooperation" and "will create a new model of financial cooperation. Brazil-China ties are currently in a process of transformation," he underscored.

As follow-up, on June 16 a delegation of 35 Chinese businessmen arrived in Brazil to present investment opportunities and identify priority projects for investment. Ambassador Li emphasized here that the China-Brazil Fund

"should serve as a reference point for other Latin American countries ... [and provide] a systematic and productive cooperation between the two countries."

Brazil’s interim Planning Minister, Esteves Colagno Junior, emphasized to Xinhua that China’s presence in Brazil is essential for Brazil to move forward with its economic recovery.

Since the coup against former President Dilma Rousseff last year, Brazil under Temer has been a less-than-enthusiastic member of the BRICS and has said little about the Belt & Road Initiative. During a meeting with Brazilian Foreign Minister Aloysio Nunes Ferreira in Beijing, in the context of the BRICS foreign ministers’ summit, Chinese Vice President Li Yuanchao suggested that as both China and Brazil are developing countries, they should work to implement the consensus reached by their leaders in terms of development strategies and intensifying practical cooperation. He called on the two nations to cooperate "within the Belt & Road initiative to deepen their comprehensive strategic association." China, Li said, hopes that Brazil will play a positive role in China-Latin American cooperation."