Brazil and China Commercial Ties Blossom Despite

Limitations, while Brazil-U.S. Diplomatic Ties Remain

on Course, with Some Exceptions

According to the Estado de São Paulo, the Chinese state-run oil company Sinopec has agreed to buy stakes in two offshore oil blocks from Brazil’s state-owned Petrobras. President Hu arrived in Brazil at the end of May for a meeting of the BRIC nations.  Sinopec will probably take a twenty percent stake in these two oil blocks, strengthening the relations between Brazil and China. Sinopec and Petrobras are also expected to draw up a further agreement dealing with refining and supplying oil-sector services.Trade between Brazil and China has been booming as Brazil’s diplomatic and commercial relations improve due to the country’s increasing role on the world stage. For example, China recently expanded its embassy personnel in Brasilia. China has become the largest market for Brazilian exports, and Chinese exports to Latin America have risen twenty-six percent since 2005.

The popular media has promulgated a number of explanations for the recent market surge between Brazil and China. A few explanations include: Brazil’s growing importance on the international stage, both countries’ similar degree of development, along with the country’s desire to balance the influence of the United States. Although any one of these theories might be valid, the purpose of the partnership between Beijing and Brasilia is to expand commercial ties in oil, imports, exports, services, companies, refineries, and factories, as shown in a 2009 agreement and other pacts signed this year. This pragmatic alliance does not imply an adversarial relationship with the U.S, but rather a commercially competitive one that has become common throughout the business world.

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This analysis was prepared by COHA Research Associate Stephanie Lloyd