June 21, 2012 / 11:05 PM / 7 years ago

UPDATE 1-Brazil in trade pact with China, sees aviation gains

* Brazil, China ink aviation, mining, finance deals

* Accords to help Embraer assemble jets in China

* China is Brazil’s largest single trading partner

* Growth in both economies is losing steam abruptly (Recasts to add comments, background, details on Embraer throughout)

By Rodrigo Viga Gaier

RIO DE JANEIRO, June 21 (Reuters) - Brazil and China on Thursday signed a handful of trade agreements aimed at boosting investment and commerce flows for the coming decade, at a time when economic growth in both emerging market powerhouses is losing momentum abruptly.

China, the world’s second largest economy, is Brazil’s biggest export market, and Brazil officials hailed the accord as critical to the South American country’s growth.

Under the agreements signed by Brazilian President Dilma Rousseff and Chinese Premier Wen Jiabao, relations between the nations will rise to the status of a “global strategic partnership,” highlighting their growing influence in the global economy.

Rousseff and Jiabao, who is in Brazil to attend the U.N. Rio+20 sustainable development summit, also agreed upon a common agenda of investments in the mining, industrial, aviation and infrastructure sectors that should encourage commerce flows between the two nations.

Speaking at the summit in Rio de Janeiro, Brazilian Finance Minister Guido Mantega said the accords should provide a boost to manufacturing and sales by Brazilian airplane maker Embraer in China. Embraer, the world’s largest maker of regional planes, for years was barred from producing jets in China, the world’s fastest-growing market for commercial and executive aviation.

“The relation with China is greatly relevant for us because it is our most important trading partner,” Mantega said. “In spite of a potential slowdown, China will keep being the place where to do business, a dynamic economy.”

The accords follow recent trade tensions between the two countries. Since Rousseff took office early in 2011, Brazilian officials have complained of barriers facing its manufactured exports in China. They have also blamed the Chinese with flooding Brazilian markets with cheap imports.

The deals come as Rousseff, a results-oriented pragmatist, is pressing China to buy more products from Brazilian manufacturers as part of a broader push aimed at reducing the South American nation’s dependence on sales of raw materials such as iron ore, oil and soybeans.

In April last year, the Chinese government allowed Embraer to start assembling executive jets in China, giving the company a lifeline in a massive market where its future was in doubt.

For years Embraer tried to produce regional aircraft in China. That approval never came, in part because China is developing a rival regional plane, prompting Embraer to home in on China’s business jet market instead.

Embraer’s China joint venture, Harbin Aircraft Ltd, would be ready to start producing smaller business jets in 18 to 24 months, Embraer Chief Executive Frederico Curado said at the time. (Reporting by Rodrigo Viga Gaier and Alonso Soto; Additional reporting by Bruno Federowski in Sao Paulo; Writing by Guillermo Parra-Bernal; Editing by Paul Simao and Leslie Adler)

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