China and Brazil Sign New Agreements

During a state visit to Beijing on May 13th, Brazilian President Lula and Chinese President Xi Jinping agreed on over 30 new initiatives. These include investments in Brazil’s mining, infrastructure, and ports, as well as deals in aviation, artificial intelligence, and climate cooperation. Their central banks also signed a five-year currency swap agreement to enhance financial stability between the two countries.

These agreements are part of a broader strategy by Lula to modernize Brazil’s resource-driven economy with China’s support. Despite growing global uncertainty and rising protectionism, Brazil and China have signaled a shared commitment to open cooperation and multilateralism.

This marks the third time Lula and Xi have met since 2023, reflecting a close and growing relationship. The new accords build on previous commitments from Xi’s visit to Brazil, where both sides agreed to boost infrastructure financing and expand access to Chinese markets for Brazilian agricultural exports.

China is now Brazil’s largest trading partner by a wide margin, with trade volumes nearly twice those with the US. Lula’s administration is clearly focused on strengthening this economic partnership, not only in trade but through Chinese investment in key sectors like renewable energy, transportation, and technology.

While other Latin American leaders such as Colombia’s Gustavo Petro and Chile’s Gabriel Boric have also been expanding their engagement with China, Brazil has taken a unique approach. A ministerial task force has been created to maintain regular discussions with Beijing, with ambitious projects like a transcontinental railway linking Brazil’s Atlantic coast to Peru’s Pacific ports now under consideration.

Many of Brazil’s new infrastructure projects are expected to channel goods toward the Chinese market, especially through the Chinese-controlled Chancay port in Peru. Chinese firms are also playing a major role in Brazil’s electric vehicle boom, with companies like BYD and Great Wall Motor driving sharp increases in EV sales.

Just before Lula’s visit, Chinese companies announced nearly USD 5 billion in new investments in Brazil, ranging from automotive and semiconductor manufacturing to food and delivery services.

In addition to economic cooperation, Lula has aligned with China on the global stage. Brazil recently joined other BRICS nations in expressing concern over growing protectionism, particularly policies that resemble those seen under former US President Donald Trump. While the US has largely steered clear of confronting Brazil on its China ties, that could shift if this partnership continues to deepen.

Meanwhile, Brazil is positioning itself to benefit from the ongoing trade tensions. Later this month, over 150 representatives from Brazil’s agribusiness sector will head to China for a major food trade fair, aiming to expand exports of key products including corn, coffee, ethanol, sorghum, and sesame. Officials are also pushing for greater market access for Brazilian meat and biofuel byproducts.