Sino-Brazil Trade & Investment Where is the Crisis?

1. Sino-Brazil Trade & InvestmentWhere is the Crisis? Ricardo de Carvalho Country Leader - Global Chinese Services Group Partner, M&A Transaction Services FECOMERCIO - April 23, 2009

2. China & Brazil World Trade Flow Overview Trade balance in 2008 Global export rankings Global import rankings Rank Country US$ billion Share % Rank Country US$ billion Share % 1 1 Germany 1 496 9,8 USA 2 112 13,9 2 China 1 429 9,3 2 Germany 1 221 8,0 3 3 China 1 069 7,0 USA 1 291 8,4 4 4 Japan 750 4,9 Japan 711 4,7 5 5 France 599 3,9 France 692 4,5 6 6 Italy 538 3,5 UK 637 4,2 7 7 Netherlands 533 3,5 Italy 544 3,6 8 8 Russia 469 3,1 Netherlands 476 3,1 9 UK 465 3,0 9 Canada 415 2,7 10 10 Canada 459 3,0 Spain 411 2,7 22 Brazil 198 1,3 23 Brazil 173 1,1 World 15 332 100,0 World 15 216 100,0 Source: Deloitte Brasil Research (according to Brazilian Ministry of Development - MDIC). 2

3. Sino - Brazil Trade Development Where is the Crisis? Brazil is aiming to make China its largest trading partner and wants to triple its China exports to US$30 billion in 2010. This aim has nearly been achieved in 2008. (Source: MOFCOM)

4. Exporters – 1,743 companies to China. Importers – 14,357 companies from China. Sino - Brazil Trade BalanceBrazilian players in 2008 Brazilian exporters Brazilian importers Cia Vale do Rio Doce Motorola Petrobras Nokia do Brasil MBR, Minerações Envision Cargill Agricola Gerdau Lois Dreyfus LG Electronics Samarco Mineração Samsung Caraiba Metais Dell Computadores Cia Brasileira de Metalurgia Cosipa Bunge Alimentos Usiminas ADM do Brasil Sony Brasil Nacional Minerios Semp Toshiba Bianchini S.A. Philips da Amazonia Source: Deloitte Brazil Research (according to Brazilian Ministry of Development - MDIC). 4

5. Sino – Brazil Trade BalanceChinese players Main Chinese Importers of Brazilian Prod. Share % Baoshan Iron and Steel Co. 11,1 UNIPEC 10,4 Jinan Steel and Iron Co. 4,0 Jiangsu Shagang Inernational Trading 3,8 International Trading of Malanshan 3,7 Dahai Grain na Oil Industry Fangcheng 3,3 China Textiles Grain and Oil 3,1 East Sea Grain OilZhangiagang 3,1 Rui Giang Lian Group 2,9 China National Tobacco 2,6 Others 52,0 Total 100,0 Source: Brasil Comercial 5

6. Sino-Brazil Trade • China ranked 2nd among Brazil's largest trade partners & sources of imports. 2008 China Exports to Brazil – by Category

7. Sino-Brazil Trade • China Imports from Brazil – Main Products

8. InvestmentsBrazilianInvestment in China The Brazilian Direct Investment Abroad has increased as Brazilian Investment in China from 2001 to 2007. Meanwhile, the Brazilian Investment in China represents just a little fraction of Brazilian Direct Investment Abroad, and there great opportunities for investments. Meanwhile, by the end of 2007, Brazilian investment in China hit US$250 million, most of it going to the manufacturing, real estate and hydropower industries. On July 4, 2008, Brazil launched a China Agenda program aimed at boosting bilateral trade and to encourage more Chinese investment in Brazil. Brazil Trade and Investment Promotion Agency (Apex-Brazil), plans to hold seminars across China to create the environment for more trade between Brazil and China, especially to promote exports to China and attract Chinese investors to Brazil. Brazilian Direct Investment in China 0,10 95 86 0,08 77 0,08 0,04 0,03 0,03 28 0,03 15 15 14 2001 2002 2003 2004 2005 2006 2007 Brazilian Direct Investment in China U$ million) Ration of Brazilian Direct Investment in China/Abroad (%) Source: Deloitte Brasil Research (according to Central Bank of Brazil - Bacen). Brazilian Direct Investment Abroad US$ Billion US$ million 114 104 79 69 55 54 50 2001 2002 2003 2004 2005 2006 2007 Source: Deloitte Brasil Research (according to Central Bank of Brazil - Bacen). 8

9. InvestmentsChineseInvestment in Brazil The Chinese Direct Investment Abroad has low participation among developing countries (eg. Brazil), and the Chinese investment in Brazil in its total abroad investment as lower part as The Brazilian Investment in China. Both country investments represent less than 1% in their total abroad investments. In 2007, China was the 36th largest country investor in Brazil. This indicator shows low participation of Chinese companies in Brazil that could explained by other factors. Many Chinese investments come from Hong Kong, Macao and "tax-havens”. The prominent sectors which will received by Chinese investments are: oil, gas, mining, ports, alternative energies, automotive, financial institution, telecommunication, and electronic industry. These Chinese investment strategy sectors, which the Brazil would be the potential target country. Based on Brazil-China Trade Balance information, some potential sectors in Brazil have been identified for Chinese investments, such as: Metallurgic; Electronics; Logistic; Air and marine ports; Agribusiness; Oil & Gas, Biofuel, among others. Chinese Direct Investment Abroad US$ billion 18 16 14 12 10 8 6 4 2 0 2001 2002 2003 2004 2005 2006 Source: Ministry of Commerce of the People's Republic of China - MOFCOM. Chinese Direct Investment in Brazil US$ Million 45 0,52 40 0,49 0,47 35 30 25 20 15 10 0,08 0,06 5 0,04 0 2001 2002 2003 2004 2005 2006 2007 2008 Chinese Direct Investment in Brazil U$ million) Ration of Chinese Direct Investment in Brazil/Abroad (%) Source: Deloitte Brasil Research (according to Central Bank of Brazil - Bacen). 9

10. Investing in China – Ten Essential Elements for M&A Success Putting People First Source: Deloitte Global Chinese Services Group – Ten Elements for M&A Success in China 10

11. Investing in China – Ten Essential Elements for M&A Success Putting People First Source: Deloitte Global Chinese Services Group – Ten Elements for M&A Success in China 11

12. Investing in China – Ten Essential Elements for M&A Success Putting People First Source: Deloitte Global Chinese Services Group – Ten Elements for M&A Success in China 12

13. Investing in China “When it is obvious that the goals cannot be reached, don't adjust the goals, adjust the action steps” Confucius 13

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