Bloggings by boz

China's deals with countries in the Western Hemisphere are often over-hyped. At times there are some significant agreements (the loans to Jamaica or the recent free trade agreement with Peru), but most of China's actions are small in scale. Compared to their expansion in Asia and Africa, their influence in Latin America and the Caribbean remains relatively limited. However, Lula's trip to China did make some real news with more than symbolic agreements.

Among the agreements:

• Most significantly, China will offer a $10 billion loan to Petrobras in exchange for 200,000 barrels of oil per day for a decade. That's a major deal and will include increased cooperation between Petrobras and China's Sinopec on technology and future exploration.
• China reduced restrictions and tariffs on Brazilian chickens and beef to increase imports. With China as Brazil's top trading partner, this agreement helps expand Brazil beyond metals and soya.
  
• The two nations will jointly launch three satellites between now and 2013. This will likely help both countries technologically.
  
• A major Chinese bank will begin operations in Brazil in the next three months.

Oddly, the deal of least significance received the most attention. China and Brazil will have their central banks meet to discuss eventually using their local currencies in bilateral trade rather than US dollars. It makes sense that two countries with such significant trade should do exactly that (and the US should get used to that fact), but there remain some significant barriers and obstacles to actually accomplishing that goal. It's something that may happen in the future and should happen for the free flow of trade, but that symbolic gesture was nowhere near the real impact of the other agreements signed between the two countries.