China, Brazil sign $10 billion loans-for-oil deal

Recently we mentioned how China replaced the U.S. to become Brazil’s chief trading partner. Ties between the emerging countries were strengthened today after Brazilian President Luiz Inacio Lula da Silva and his Chinese counterpart Hu Jintao in Beijing.

Both countries signed a multibillion dollar deal that would provide China with 200,000 barrels per day of oil from Brazil. In return, Brazil's state-owned Petrobras will receive $10 billion to explore in possibly lucrative offshore areas like the promising Tupi field.

A dozen other accords were signed including an $800 million loan from the China Development Bank to Brazil’s development bank.

Perhaps the most revealing detail of Lula and Jintao’s talks was the possible dropping of the U.S. dollar when both countries conduct trade with each other:

“The discussions have focused on how to improve the financial service system,” Celso Amorim, Brazil’s foreign minister, said today at a briefing in Beijing. “In terms of what currency to use, we are still discussing”...

“Concerted efforts and dialogue will be required among developing countries for their voice to be increasingly heard on the global stage,” Lula wrote in the article. “It is my belief that cooperation and friendship among developing countries is increasingly required to overcome the present threats to peace and development.”

Image- BBC News
Online Sources- Bloomberg, The Latin Americanist, Reuters