Brazilian President Lula’s recent state visit to China moved the needle in China-Brazil relations, pushing two of the world’s biggest economies and major trade partners closer together. During the visit, the two countries signed 15 bilateral agreements that seek to deepen collaboration on a range of issues, from aerospace development to infrastructure investment. As we witness these important developments, we look at past and present China-Brazil relations, trade, and investment, and discuss the significance of the closer ties. This analysis aims to provide valuable insights for businesses interested in taking advantage of this burgeoning partnership.

China and Brazil have signed 15 bilateral agreements estimated to be worth around US$10 billion during the state visit by Brazilian President Luiz Inácio Lula da Silva to China last week.

The visit, which lasted from April 12 to 15, marked a major turning point for China-Brazil relations and an important change from the cooler relations experienced under the previous Brazilian president, Jair Bolsonaro.

According to the Joint Statement Between the People’s Republic of China and the Federative Republic of Brazil on Deepening the Comprehensive Strategic Partnership (the “joint statement”), which was released during the visit, the two countries aim to deepen cooperation in a variety of fields and jointly address a wide range of issues, including poverty reduction, social development, technological innovation, environmental protection, climate change, the low-carbon economy, and the digital economy.

The bilateral agreements cover many of these fields and more, aiming to boost bilateral trade and investment across a broad range of industries, including strategic and emerging fields like technological innovation and energy.

Overview of China-Brazil relations

China and Brazil officially established diplomatic relations in 1974. The two countries have maintained amiable relations in the decades since and in 1993 established a strategic partnership to further mutual interests and enhance bilateral relations.

China-Brazil relations are based primarily on bilateral trade and investment, which have boomed over the past decade. 

During his first presidency from 2003 to 2010, when his approval ratings consistently remained above 80 percent, Lula sought to strengthen ties with China, recognizing the growing economic power of the country. He visited China four times during his tenure and in 2009, China overtook the US to become Brazil’s largest trading partner and has remained so ever since.

This event can be framed within the commodities boom of the 2000s, which created a favorable environment not only for Brazil, but also for other Latin American (LatAm) countries, such as Argentina, Ecuador, Bolivia, and Venezuela to pursue closer economic ties with China, which was seen as a key market for their exports and a potential source of investment and technology transfer.

Moreover, both countries are part of the BRICS bloc of nations (Brazil, Russia, India, China, and South Africa), which hold annual summits to foster cooperation on trade, investment, and social development. China hosted the 14th BRICS Summit in June 2022, and Brazil will assume the rotating precedence in 2025.

China-Brazil relations cooled somewhat when Jair Bolsonaro took the presidential office in 2019, as the former president and his international governance advisors moved closer to the US, then under the presidency of Donald Trump.

Since President Lula took office at the beginning of 2023, bilateral relations have improved significantly, with Lula seeking to rekindle the relationship with China and showing an eagerness to develop bilateral trade and investment ties.

At the end of March 2023, China and Brazil signed an agreement to settle all trade in the two countries’ respective currencies, rather than in US dollars. This agreement, as well as remarks made by President Lula during his visit to China, show that Brazil is keen to disrupt the US dollar’s dominance as the main trade currency, which aligns with Beijing’s aspirations to internationalize the renminbi.

China-Brazil bilateral trade relations

China is Brazil’s biggest trading partner, and has been so for 14 consecutive years. It was also the first LatAm country to exceed US$100 billion in annual trade with China.

According to data from the China General Administration of Customs (“China Customs”), in 2022, bilateral trade between China and Brazil reached RMB 1.14 trillion (approx. US$165.6 billion), an increase of 8.1 percent year-on-year. 

Brazil is also one of the few countries in the world that has a trade surplus with China – RMB 316.6 billion in 2022 – exporting more to China than it imports. In 2022, Chinese exports to Brazil reached RMB 412.8 billion (approx. US$60 billion), up 19.3 percent year-on-year, while imports from Brazil to China reached RMB 729.4 billion (approx. US$105.9 billion), increasing 2.6 percent year-on-year.

Agriculture is one of the most important areas of cooperation between China and Brazil, with China still being highly reliant on the import of Brazilian agricultural products, such as meat, fruits, grains, and honey.

The main import commodity from Brazil to China in 2022 was oil seeds and oleaginous fruits (fruits for extracting oil), and other grain, fruit, and seed products, which alone generated US$31.8 billion in value, according to data from ITC Trade Map.

Source: China Briefing

• UK supports Viet Nam’s economic transformation through its financial services sector
• Green transition creates fresh opportunities for Viet Nam–Canada partnership
• Trade deficit increases after 5 months: Not yet a worrying sign
• MoIT builds sustainable market channels for local agricultural product
• Sustainable transformation needed for Viet Nam’s strategic pangasius sector