China´s state-owned EximBank to invest in Brazil´s agriculture
Export-Import Bank of China, a state bank with a mission to promote trade between China and the rest of the world, is in talks to provide about $200 million in financing to one of the largest agricultural companies in Brazil, a top bank official said on Wednesday.
The potential deal with Amaggi Exportacao e Importacao—relatively small in size compared to other deals the bank has done in the region—nonetheless would represent China Eximbank’s first investment in Brazil’s agriculture sector, Feng Zengbin, deputy general manager of corporate banking at Eximbank, told The Wall Street Journal.
China has become Brazil’s trading partners and the country is seeking to expand its trade and investments in other parts of the region. Besides the hard commodities like oil and iron ore, agricultural products are becoming important as an export to China’s insatiable demand for its increase consumption of foodstuffs and manufactured foods.
So far, the Chinese policy bank has mainly focused on the resources sector in South America. The potential transaction also marks the bank’s increasing focus on providing financing to foreign companies that export soybeans, copper and other commodities to China.
“We not only help Chinese companies expand overseas but also help overseas companies that have connections with China,” Mr. Feng said at an investor forum aimed at connecting businesses in China with those in Latin America.
Beijing has been encouraging Chinese companies to go abroad to help diversify the country’s $3 trillion-plus foreign-exchange reserves and reduce its reliance on the U.S. dollar.
Chinese banks like Eximbank help to make such big bets abroad, especially in sectors such as resources, given China’s seemingly insatiable appetite for oil, natural gas and other commodities.
China has overtaken the U.S. to become Brazil’s largest trading partner. The largest Latin American economy has become an important supplier of oil, iron ore and soybeans to China, now the world’s second-largest economy.
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