China Development Bank, one of China’s largest state-owned enterprises, has agreed to lend $10 billion to Brazil’s Petrobras (PBR) in exchange for a long-term supply of oil – the latest illustration of how Beijing is using the global downturn to further its domestic agenda.

The steel business faces its biggest hurdle in 60 years with some analysts predicting double digit production cuts in 2009. Now, a sudden change in China trade policy may spell even more trouble for Western steelmakers, as Beijing is currently considering measures to shore up its ailing steel industry with new export policies.