Banks of China in Brazil and Brazilian Banks The capital of a new financial intelligence

Banks of China in Brazil and Brazilian Banks

The capital of a new financial intelligence.

Analysts specializing in the study of the set of Brazil-China relations are unanimous in considering that these are “really peculiar”, different, carefully balanced, strongly rooted in strategic values ​​of mutual security for both countries, and that these aspects work as stabilized of these relationships, they balance themselves as a compass for careful monitoring of this true “case”, of this curious historical fact in the scenario of international geopolitical relations.

In this multiplying scenario of a permanent and challenging creative dynamic for new business opportunities, what is the role of this “machine” to build the present and the future that are the banks, the banking financial system?

In all the power systems of nations, societies as we know them today and which structure us, in all, banks function as axes that strengthen and establish the paths of social mobility, from the primary production of food survival, to the revolutionary creative world of science, from quantum chemistry to cosmic biology. It is the dynamics of financial capital, investment, the multiple penetration of credit that energizes all the forces of human society.

If we deepen the historical research on the exchange mechanisms that moved, over two thousand and three hundred years ago, trade in Asia (gold, silver, jade, amber, wine, spices, transported in mules, horses, camels) on the roads of famous silk route, we can consider that the credit value already worked between the buying and selling parties, measured during the travel time of a new delivery from the markets to their customers. And that was well before the trade between East and West took hold, perhaps retreating perhaps more than four thousand years ago, on the paths traveled by nomadic breeders with their livestock. More than 620 of these trails, crossing Central Asia, have recently been identified by satellite images.

At the end of April 2019, the Second Forum for International Cooperation on the New Silk Road was held in Beijing. More than six thousand representatives from 150 countries and 90 international organizations were present, including 39 heads of state.

As the current Chinese Ambassador to Brazil, YANG WANMING, wrote: This new Silk Road “is an infrastructure investment project, based on the principles of sharing, consultation and joint construction”, among the countries participating in this global platform business, in which Brazil will participate. It is the largest integrated development program since the Marshall Plan.

The New Silk Road or “Belt and Road Initiative” - BRI - expects to move almost one trillion Chinese dollars in more than one hundred countries, which “support a global partnership for the connectivity of land, sea, air and internet communications , building a reliable, affordable and inclusive high-quality infrastructure. ”

During that Second Belt and Road Initiative Forum in Beijing, more than twenty multilateral cooperation mechanisms with China were launched, covering the areas of finance, customs, energy, environmental protection, culture, think tanks and the press. At this event, President XI JINPING announced that China will adopt a series of important reforms and openness measures, such as expanding the inflow of foreign capital in more sectors of the economy, strengthening international cooperation in the protection of intellectual property, increasing imports of goods. and services, more effective alignment of international macroeconomic policies and better implementation of openness policies.

On May 23, 2019, therefore one month after the Second Forum of the New Silk Road, in the Chinese capital, the Vice President of Brazil, General Hamilton Mourão, declared in Beijing, when signing with the Vice President of China , WANG QUI SHAN, the reactivation (four years ago was paralyzed) of COSBAN (Sino-Brazilian Commission of High Level of Consultation and Cooperation), that the Chinese projects in the “Belt and Road Initiative” can be carried out in Brazil through the Program Partnerships and Investments (PPI).

On May 20, 2019, the Vice President of Brazil, who met President XI JINPING on this trip to China, participated in a seminar to promote the Brazilian financial market on the Shanghai Stock Exchange, signed an agreement between B3 (Bolsa do Brasil) and the Shanghai Stock Exchange, to launch an ETF (Exchange Traded Fund), a type of investment fund linked to IBOVESPA indexes, Brazil's main stock indicator. Mourão met with the President of Banco BRICS (NDB), headquartered in Shanghai, a bank that is undergoing market expansion and renovation. In 2019, the NDB approved more than $ 700 million in financing projects for Brazil in the areas of infrastructure. This BRICS Bank already operates in yuan and reais.

- This “giant wheel” of business / investments that stratify, deepen, Brazil-China relations, goes through the backbone of food security for the Chinese people, considering the growing increase, in the last ten years, of imports of Brazilian agricultural and livestock products . More than 150 billion dollars between 2017-2019.

- With the implementation of the “New Silk Road” program in Brazil, China plans to increase its investments in the country by 40%, both in areas where it already has strong positions, and in different other sectors, mainly high technology. Recalling some prominent Chinese business sectors in Brazil: production of wind / solar energy and transmission; also special investments in oil (pre-salt), nuclear, thermal and hydro energy; water (research and production); forests, (central region of Minas Gerais), through China Forestry, the largest branch company in the world; Brazil is the main supplier of cellulose to China, which is the largest importer of this raw material on the planet. More than 2.7 billion dollars she paid in 2019 for Brazilian pulp.

- Inside-information: first week November 2019. Mega auction of large oil reserves (pre-salt, including in the Búzios basin). Prediction of total failure: the oil companies did not submit proposals. President Bolsonaro in official view of China, at the end of October, informs President XI JINPING of this worrying situation. The Chinese president understood the signal.

Petrobras quickly initiated a dialogue with Chinese state oil companies CNOOC and CNODC. Both participated with ten percent of a consortium that bought the huge pre-salt reserve in Búzios.

Some connections to new paths of capital

- Tire manufacturers in China plan to control between 45% and 50% of the Brazilian market in 2021. Apollo Tires, from India, will be the most active competitor of the Chinese.

The Chinese industry produces high-quality technological cars in Brazil and has already dominated up to 25% of the national market, with a sedan with six airbags.

- The African swine fever that reached 40% of China's pig herd in 2019-2020, did not bring a substantial increase in soybean meal imports from Brazil. Chinese breeders are not on an industrial scale of consumption. The feed used by them uses little bran. But interest in the import of pork increased by another 25% / year.

The Development Bank of China (CDBII) has developed a program to finance projects in the health sector in Brazil. Its executive president, LEI ZEYM, was in July 2017, on an official visit to Ceará, securing contracts. It plans to create an industry for the production of medicines.

- China's business and investment in Brazil created around 700,000 jobs in 2018-2019. In Rio Grande do Norte, Chinese participation in energy, ports, tourism and services businesses will add seven thousand new jobs.

- Railways and transport: The Chinese BYD, the first automaker to produce cars with a plug-in (powered by the electric network) is the supplier of the VLT (vehicle on rail) equipment, in Salvador, Bahia.

Chinese companies are partners in railroads, road construction, airports and drone factories (in Barueri, São Paulo), for use in refineries and oil platforms.

- Flat steel production: the ChinesePC (China Communications Construction Company) joined Vale in 2019 to build a steel plant in Marabá (Pará), an investment of 1.5 billion reais.

China and Vale have been developing commercial relations for decades, especially iron ore; the import of several other minerals is of primary interest to the Chinese. Niobium is one of them. In August 2001, a high-level mission from the Shanghai Baostel Group, met, in Rio, with directors of CBMM (Companhia Brasileira de Mineração e Metalurgica), the world's largest producer of niobium, proposing a mega business project related to this ore. 

The negotiations did not evolve to the dimension desired by Baostel. Currently the production of niobium in Brazil has been expanded, it is less concentrated. More flexible for new investments.

In five years of construction, China opened a second mega-airport in September 2019. The other was 11 years ago. It has 700 thousand square meters. It cost almost 12 billion dollars. It is the largest passenger terminal in the world: 45 million travelers today, 72 million in 2025. It is Beijing International Airport - DAXING. Chinese investments and technologies.

The “New Silk Road” opens spaces for participation in the construction projects of some fifty medium-sized regional airports in Brazil.

COMAC (Comercial Aircraft Corporation of China) foresees a 20% increase in the production of its aircraft between 2021 and 2025. In the military area, a 10% increase in the production of new aircraft carriers. Steel is the raw material for these industries. The Chinese do not have good relations with the United States in negotiations with steel. Brazil could be a decisive competitor. The agreement with Vale for the Marabá steel industry opens a safe path.

Considering this multiple strategic Brazil-China political-economic platform, already in full swing, it is imperative to activate, move forward immediately, in the creation of a specific, innovative agenda, of decisive co-participation between Brazilian and Chinese banks, maintaining the factor of competition between them , but through an intelligent cooperation program, fostering new ways of strengthening its positions, confirming the social sense of capital, credit and investment, in building safe foundations that continuously feed the growth of human development indices, such as income, employment, education, well-being, rates whose positive growth are reversed, always revert, in favor of other renewed investments, greater financial movement, more credit, etc., etc., values ​​that are the bases of the very existence of capital . Financial capital is the very essence of the global banking system. If this capital intelligently dares to be a historical force motivating just social equilibriums, it will be creating opportunities for the sustainable development of nations, contributing to a broader understanding aiming at building the bases for an economic geopolitics of the multilateralism of nations ...

The growing results of the Brazil-China business over the past ten years are well known and fantastic. The bases strengthened by Chinese imports from the Brazilian agricultural and mineral sectors, the matured trust between the partners created space for a huge volume of Chinese capital investments in Brazil, implementing projects for the development of sectors essential to Brazilian infrastructure, in a continuous and renewed expansion values ​​in different business areas in Brazil. More than ten thousand companies have handled almost three hundred thousand entrepreneurs, technicians, consultants, scientists, specialized workers, researchers, official and private institutions, universities and more than 270 billion dollars in the general set of relations between the two countries in the last three years. Only a significant number stands out; curiosity about a Chinese travel project to Brazil, starting next 2024: China National Tourism Administration is studying a plan to transport and host twelve million visitors a year. It is almost double the number of tourists that traveled around Brazil in 2017-2018.

Another figure to compare: WANGFUJING, Beijing's busiest popular shopping street alone, received more than four million visitors in 2018. Almost two hundred thousand of them were served at the WUYUTAI TEA SHOP, the most prestigious tea house in the country.

Banks China - Brazil: expanding power and roots in the same system

In an interview with a TV channel in São Paulo, on August 2, 2020, the current Minister Counselor of the Chinese Embassy in Brazil, QI YUHUI, a careful diplomacy expert, qualified analyst of Brazilian economic policy, advanced a wide step in the projection of relations between the two countries. So far, "these relationships revolve like two wheels at high speed," he said, symbolized as import-export and investment. Now it is necessary for a strong, renewing and safe engine to take action: “the financial engine”. This was the new focus pointed out by him, expanding the Brazil-China potential, highlighting the urgent need for an intelligent master line, a project for structuring new spaces for the use of available financial capital. This initiative must be advanced by banks in both countries, exploring the multiple business opportunities, from the domains of food security to the high tech digital worlds, etc, etc.

We know that China would like to sign a free trade agreement with Brazil. For the Chinese ambassador to the USA, CUI RIANKAI, (who confronted President TRUMP's positions on steel policy with Beijing), this issue will always be on the negotiating table with the Brazilians.

Nine of the largest banks in China have been installed in Brazil for over twenty years. In 1998, Bank of China opened an office in São Paulo.

A curious fact: BOCOM (Bank of Communication / Bank of Communication of China), associated itself in 1858, therefore, more than 160 years ago, in Salvador, with Banco da Bahia, in agricultural credit operations.

Currently, nine large Chinese banks are officially operating in Brazil, developing operations in all sectors of the international banking system. In June of this year (2020), the Chinese company XUZHOU Construction Machinery Group announced that it had received a license from the Central Bank to install XCMG Bank Brazil, which will develop different financial operations.

Brazil is a partner of the Asian Infrastructure Investment Bank, headquartered in Beijing, which has China as its main associate. It has 82 members and 21 other countries want to join. Each member can handle a loan of US $ 100 million per year.

Brazil is also one of the five partners of the BRICS Bank (the NDB). This bank develops an active line of project financing for Brazilian companies and is expanding strongly. The NDB is expected to have five more members this year. Uruguay, Singapore and the United Arab Emirates are expected to be next.

- The Central Bank of China (PBOC), Vice-Governor PAN GONG SHENG, has defined new rules for the operation of financial holding companies in the country, rules that will become effective in the coming months. They were developed by the regulatory body of China's banking system, CBCR, considering previous consultations with dozens of institutions in the international financial market.

- PBOC injected US $ 242 billion into the country's domestic financial market, during the first week of February 2020, as a precaution to "insure" investments.

- FANG QIUCHEN, Director of the China International Contractors Association, former Minister of Commerce, predicts that China will sign during 2021 a hundred new major investment contracts in Latin America. One of them will increase the purchase of concentrated orange juice from Brazil by more than 20%, which will become the second largest exporter of this product to China. The leadership is from Belgium. The consumption of concentrated orange juice has grown by more than 50% in the last three years.

Silks from one ocean, the other Amazon

In late November 2014, a delegation from the Chinese Parliament held meetings with Brazilian deputies at the Federal Chamber, in Brasília. This group was led by the Vice Minister of Culture and Vice President of the Foreign Affairs Commission of the National People's Assembly of China, deputy ZHAO SHOUHUA. In addition to the parliamentary diplomacy agreements between the two institutions, the Chinese leader highlighted her government's official interest in collaborating in the construction of the transoceanic railroad, which would interconnect the Atlantic to the Pacific, with the decisive participation of Brazil. This transoceanic project, of high relevance for the country, will be part of China's investments in the “New Silk Road” (“Belt and Road Initiative”) in its construction map with Brazil.

January 2015, Beijing. First ministerial meeting of the China Latin America and Caribbean Cooperation Forum (CELAC). End of January 2018, Santiago Chile, Second Forum. President XI JINPING had announced an investment of over 100 billion yuan, strengthening investments of the “New Silk Road” program in the China-CELAC Cooperation relations, suggesting that banks should begin to carry out financial operations in yuan abroad, through loans granted by China worth 400 billion in Chinese currency. Cooperation in infrastructure, electricity, agriculture, communication, heavy machinery and construction of logistics channels.

At the beginning of the 17th century, China and Latin America opened a “Maritime Silk Route in the Pacific Ocean”. A free flow of trade and capital. More than four hundred years later, the possibility of building an Atlantic-Pacific transoceanic railway is now resumed, with the “new face” of the Silk Road.

- An Atlantic power of three and a half million square kilometers of sea, oil, gas, minerals, fishing, renewable energy, biological wealth, is the domain of Brazil, called the Blue Amazon. Completely virgin, unexplored, the Blue Amazon in honor of the immense capital of the Amazon Forest. It accompanies almost the entire Brazilian sea coast.

Geostrategic area of ​​utmost importance, safety of coastal navigation in the South Atlantic, world trade in goods, a mega economic project of hundreds of billions of dollars. Area of ​​world greed, enterprise for financial consortia of large banks ...

Unexplored, unknown, surface, soil and subsoil of the Blue Amazon.

On September 21, 2020, China launched a high-tech satellite, HY2C, for meteorological studies. One of the highlights of this mission: analysis of the dynamics of the oceans ... It will certainly be a very useful source of information for the development of the “New Silk Road” program, which involves a strategic project of integrated global development, of the financial and economic interest of more than hundred countries associated with China's leadership.

File note: In the 15th century, some 600 years ago, the Chinese emperor ZHU GAOCHI, who ruled for only ten months, did not like China looking in the oceans for growth and expansion. Currently, they pass through one of their most delicate positions in the strategic scenario of global geopolitics.

The Chinese Navy is today a high-tech military defense and attack power; it has evolved permanently in this direction, has a priority and growing budget, and makes use of Artificial Intelligence sciences for all its operations.

Reading note: political scientist LEE KAI FU's book “IA Superpowers: China, Silicon Valley and the New World Organization.”

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China is currently and actively experiencing the awakening of a new and multiple power that results from a refined strategy, of how investment capital is applied. The capital of a new financial intelligence. The portentous international integrated development plan “New Silk Road” (“Belt and Road Initiative” - BRI) will make China transit / co-participate in almost all economic routes of world growth, investments guided by the principles of sharing, consultations and consensual construction, involving more than one hundred acceding countries and hundreds of technical, scientific and financial institutions

And remember that in December 2009, CHEN DEMING, then Minister of Commerce of China, was thinking about a kind of Chinese Marshall Plan, transferring heavy factories from his country to produce in Africa. The strategic evolution for a participatory policy of China in the process of international investment development “jumped” to a more aggregating concept of co-association, of business participation of nations that, with it, China, wish to carry out business projects structured in essence of social market capitalism, aligned with the values ​​of a multilateral policy. Then, in 2013, the “New Silk Road” was born, announcing a trillion dollars, until 2027, for the construction of ports, railways, roads, new energies, in Latin America, Africa, Asia, Europe, qualifying China as an entrepreneurial leader in structuring social investments.

And, in parallel, seeking to place its currency, the yuan, as a direct payer for some of its essential imports, iron ore, for example, a contract signed in November 2019, fully active between Vale and the Chinese steelmaker Yongfeng. Two weeks earlier, the Anglo-Australian mining company Rio Tinto was receiving in yuan the sale of a large iron ore shipment. And in Shanghai, future oil contracts were signed, paid with the Chinese currency. China's policy of “de-dollarizing” trade in strategic commodities has been active in order to reduce the dollar's hegemony. China plans to import more than twenty-four trillion dollars worth of goods over the next 15 years.

“With more than 80 million scientists and 170 million qualified professionals, an investment in research and development that accounts for 2% of its GDP, and the strict regulatory framework in the field of intellectual property, China is printing higher quality in its growth and giving new impetus to the shared prosperity of the world ”. (As he wrote in July 2018, Former Chinese Ambassador to Brazil, LI JINZHANG).

Values ​​that are really a drop of water in an ocean, compared to the 270 billion dollars that were handled between 2017-2019, in the total set of China-Brazil trade and investment relations, involving more than 300 thousand people, five thousand companies , etc., etc.

What could be the number and its multiple strategic geo-social results when financial operations, their means and ends, come to fruition from a supremely intelligent strategic plan for collaboration between Chinese banks operating in Brazil and Brazilian banks? Certainly a plan structured in confluent and intelligent investment operations, which will bring about successful business and social results for all who will be the new next merchants in the New Silk Road. Also always counting on the natural alternative and creative routes that other “silk paths” can be built on.