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Due to the increase in meat consumption in China, the need for soybeans has widened. The main country where the Chinese have looked is Brazil and are interested in purchasing hundreds of thousands of acres. When they were refused the land, the new strategy was to feed money into the agriculture industry in Brazil to give farmers the capital needed to triple soybean production.
There have been numerous bilateral agreements between China and Brazil all pursuing the same goal - China securing food supply in order to lower its reliance on the United States. In turn China has become a main trade partner for Brazil, buying not only soybeans but iron ore as well and investing in Brazil's energy sector.
So far, so good. The problem is that historically China has been on a self-sufficient agricultural track, which means that they are expected to seek the opportunities to have direct control of as much as possible of Brazilian agriculture. Brazilian officials are starting to see where the situation is headed and are feeling uneasy about it, but what can be done at this point? With each Chinese investment the Brazilian economy is becoming increasingly more dependent on keeping the Chinese happy.
It seems that in this partnership the Chinese have the upper hand. The partnership with them has been the cause for an economic boom in Brazil and if China was to withdraw, Brazil would be left with few options. Brazil definitely needs to change its strategy in order to become less dependent on China and seek other opportunities to expand.
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