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China, Brazil in oil-loan deal

CHINA agreed to lend US$10 billion to Brazil's Petrobras in return for guaranteed oil supply over the next decade, under a deal signed yesterday during a state visit by Brazilian President Luiz Inacio Lula da Silva.

Da Silva and Chinese President Hu Jintao signed 13 agreements in all, covering science, space, law, ports and farm products.

The loan will come from China Development Bank, state-controlled oil company Petrobras said in a statement released in the Chinese capital.

Brazil will guarantee the supply of 150,000 barrels of oil a day to China's state oil firm Sinopec this year and 200,000 barrels a day for the next 10 years, the statement added. Petrobras and Sinopec also signed a memorandum of understanding on exploration, refining and petrochemicals.

Da Silva told Hu the deals would help cement economic ties between the two developing world giants.

His comments came at the end of a series of meetings on the second day of a three-day visit to Beijing that also included talks with Premier Wen Jiabao.

Da Silva said he felt that the visit "will improve further our relations and will strengthen our financial and trade cooperation," noting that China had recently overtaken the US as Brazil's chief trading partner. Total bilateral trade in the first four months of the year was up 13.9 percent from the same period last year to US$10.2 billion.

Da Silva said in a joint communique issued yesterday that Brazil adheres to the one-China policy, adding that Taiwan is part of China.

Calling da Silva an "old friend" of China, Hu said he hoped the visit would "bring the development of our relations to a new level."

The two leaders promised to "promote cooperation and dispel obstruction in the fields of customs and quality control" to facilitate trade between the two countries.

Earlier in the day, da Silva opened a Brazilian studies center in Beijing and presided over the closing ceremony of a business forum highlighting the rapid growth of economic ties between two nations.

Da Silva's visit comes amid efforts by the president to shore up relations with Russia, India and China - which along with Brazil make up the so-called BRIC nations that have been driving much of the growth among emerging economies.


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