July 1, 2009
By Dan Prescher, International Living
The global recession has choked U.S. trade with Brazil, knocking the U.S. from the top of Brazil's trading partner roster. This year the #1 spot has been filled... by China.
And as part of their new relationship, central banks in Brazil and China are studying proposals to trade between themselves using their own currencies, the yuan and the real, instead of the U.S. dollar.
Rio de Janeriro state Governor Sergio Cabral also recently announced that China Development Bank Corp, the government-run bank for public works projects, plans to open an office in Brazil next year to invest in ports, steel mills and energy.
Rio is a natural location as it is also the base for Petroleo Brasileiro SA, Brazil's state-controlled oil company, and Vale SA, the world's largest iron ore producer.
China and Brazil are two of the so-called "BRIC" countries... Brazil, Russia, India, and China. Experts agree that as these new global economic powers develop, the U.S. will become increasingly isolated.
At a June 16 meeting in Russia, leaders of the BRIC countries called for a “more diversified” monetary system to reduce dependency on the U.S. dollar, and China’s central bank continues its call for a new global currency.
On a recent trip to China, Cabral also said that China Development Bank Corp was interested in investing in projects related to the 2014 World Cup soccer tournament and Rio de Janeiro’s bid for the 2016 Olympics.
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