China edges out US as Brazil's biggest trading partner

CHINA has replaced the United States as Brazil's biggest trading partner, according to Brazilian trade minister Welber Barral.

The news is the latest sign of China's increasing challenge to US hegemony in Latin America, reports London's Daily Telegraph. "China has been steadily increasing its sphere of influence and has become particularly close to the four 'Red' South American countries: Venezuela, Bolivia, Ecuador and Peru," said the report.

Mr Barral said trade between Brazil and China had amounted to US$3.2 billion in April, representing a near 12-fold increase since 2001. The sum was greater than the $2.8 billion in imports and exports to the US and represented the second consecutive month that China had topped the trade table.

The US has been Brazil's principal trading partner for nearly 80 years, but a sudden surge in Chinese demand for Brazilian iron ore in the first quarter of the year dislodged the Americans.

In February, China's vice president, Xi Jinping and vice prime minister Hui Liangyu travelled through South America to enhance trade relations. They visited nine countries, including Brazil and Mexico, Venezuela, Ecuador and even Colombia, a staunch US ally. The month before, China contributed $350 million to the Inter-American Development Bank.

But China has not signed a bilateral trade agreement with Mercosur, the Latin American free trade bloc, and much of China's foreign investment in Latin America is funnelled directly into offshore tax havens in the Cayman Islands and Bermuda.

Brazilian exports are mostly soya beans used in making tofu, iron ore, cellulose and fuel. But the country is expected to sign more trade deals with China on May 18.

Source: Schednet