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Last Updated: Friday, 28 May, 2004, 13:38 GMT 14:38 UK
Brazil wins China trade support
Chinese premier Wen Jiabao (l), Brazilian president Luiz Inacio da Silva
President da Silva (r) met with Chinese premier Wen Jiabao
Brazilian President Luiz Inacio da Silva's visit to China looks set to strengthen the developing world's hand in global trade talks.

During the visit, the two nations agreed to develop closer economic ties, and said they would step up pressure on rich countries to open their markets.

President da Silva - known as 'Lula' - invited China to join emerging trade alliances between developing countries.

He said such alliances could help counter the West's dominance of trade.

The trend towards closer cooperation between Brazil and China - the developing world's two biggest economies - reflects their burgeoning trade relationship.

Total trade between the two nations grew five-fold between 2000 and 2003 to a value of $8bn (4.5bn).

Helping hand

Fast-growing China has become a major importer of Brazilian commodities, while some Brazilian manufacturers have set up operations in China, taking advantage of low labour costs.

China and Brazil don't have overwhelming muscle, but by cooperating they do improve their position
Emily Morris, Economist Intelligence Unit
Brazil, battling an economic downturn, is keen to foster a close political relationship with its new trading partner as well.

The two countries first cooperated on the international stage last year, when they led a developing world bloc that derailed World Trade Organisation talks by insisting that rich nations scrap barriers to agricultural imports.

During his visit to China, President da Silva said the two countries should continue working together on international trade issues.

He announced plans to set up a free trade pact between China and South American trade bloc Mercosur - made up of Brazil, Argentina, Paraguay and Uruguay.

He said the Mercosur-China alliance would create a "healthy multipolarity" in trade, and would strengthen the developing world's campaign to eliminate agricultural subsidies in rich nations.

Joint effort

The Brazilian president also said he hoped China and Russia would join the 'G3' group of emerging nations formed last year by Brazil, India and South Africa in an effort to counterbalance US and European dominance of global trade.

"This has been an emphasis of Brazilian policy, and (the China visit) is a consolidation of that process," said Emily Morris, Brazil analyst at the Economist Intelligence Unit.

"China and Brazil don't have overwhelming muscle, but by cooperating they do improve their position."

Describing China as a "shopping centre of opportunities," Lula agreed to lobby Paraguay to moderate its support for Taiwan, which China regards as a renegade province.

Lula's charm offensive drew a warm response from China, with Chinese president Hu Jiantao saying his country had "a lot of interest in closer relations with Brazil".

It also paid dividends for Lula's entourage of business executives, many of whom are reported to have signed agreements with their Chinese counterparts during the visit.

These included a joint venture between government owned oil firm Petroleo Brasileiro and China's Sinopec.

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