Brics bank could be the ‘great bank of the Global South,’ Brazil’s Lula says

Shanghai — Brazil’s President Luiz Inacio Lula da Silva said on Thursday the creation of the New Development Bank shows emerging nations can together create major social and economic changes, even freeing themselves from the traditional banking system.

Kicking off his China visit, Lula attended the inauguration of former Brazilian president Dilma Rousseff as head of the multilateral bank set up by Brazil, Russia, India, China and SA , collectively known as the Brics countries.

Lula said the bank, headquartered in Shanghai, has great potential “in that it frees emerging countries from submission to traditional financial institutions, which want to govern us.”

He said the financial needs of developing nations were enormous, but the lack of reforms had limited credit from existing banks. The Brics bank could become the “great bank of the Global South,” Lula said in a speech.

Lula said the bank could help developing countries depend less on the dollar and finance trade in local currencies.

“We need a currency that gives countries more calm, because today a country needs to run after the dollar to be able to export, when it could export in its own currency,” he said.

The leftist president is in China to reset relations with Brazil’s largest trade partner after a frosty four years under his far-right predecessor Jair Bolsonaro. He will meet Chinese President Xi Jinping on Friday in Beijing.

On Thursday in Shanghai, Lula also visited the research centre of Chinese telecom giant Huawei and met with CEOs of China Communications Construction Company and automaker BYD , which plans a major investment in electric cars in Brazil.

Brazilian plane maker Embraer may sign a deal for the sale of 20 commercial jets to a Chinese airline, two people familiar with the matter said, ending the company’s dearth of new business in China since the 2016 closure of a joint venture at a factory in Harbin.

China overtook the US as Brazil’s top trading partner in 2009 and is a major market for Brazilian soybeans, iron ore and oil. Brazil is now the largest recipient of Chinese investment in Latin America, driven by spending on high tension electricity transmission lines and oil production.

Reuters