Brazil seeks economic growth through collaboration with China

In the wake of Dilma Rousseff's impeachment, Brazil and China have forged several significant commercial and financial agreements that are bolstering their economic ties and impacting Brazil's economy and political stability.

One of the key agreements is the establishment of a clearinghouse for local currencies, enabling trade in Chinese yuan and Brazilian reais, reducing their dependence on the US dollar for bilateral trade. This was agreed upon around 2025, during Rousseff's return to influence.

Another significant development is the renewal of a local-currency swap agreement worth 190 billion yuan (approximately $27.7 billion) between the People’s Bank of China and Brazil’s Central Bank. This arrangement, which extends its validity for five years with options to renew, supports liquidity and stabilizes exchange fluctuations between the two countries.

Brazil and China have also collaborated on the joint development of the CBERS-5 satellite, Brazil’s first geostationary satellite aimed at meteorological and environmental monitoring. This collaboration enhances Brazil's technological sovereignty and disaster response capabilities.

Under Dilma Rousseff's leadership, the New Development Bank (NDB), which Brazil co-founded with China and others, has focused on local currency lending and facilitating Chinese capital inflows into Brazilian infrastructure and small business recovery projects. This partnership aligns Brazil more closely with China’s strategic financial institutions and reduces reliance on Western-dominated financial systems.

The increased trade volume between Brazil and China, which grew about 10% year-on-year during 2024-2025, indicates robust commercial ties. Local currency arrangements and financial cooperation mitigate currency risk and help stabilize trade flows amid global uncertainties and protectionist pressures, particularly from the US.

Infrastructure projects financed with Chinese capital through multilateral frameworks improve Brazil’s long-term economic development, especially in disaster-affected and underserved regions. The CBERS-5 satellite project enhances Brazil’s capability in environmental monitoring and disaster management, fostering economic resilience.

These agreements deepen Brazil’s strategic partnership with China and BRICS partners, providing a financial and diplomatic counterweight to geopolitical pressures from Western nations, notably the US. The strengthened relationship with China supports the current government’s agenda by providing alternative financial resources and international platforms outside of traditional Western dominance, potentially increasing Brazil’s political maneuverability.

Companies such as Hunan Dakang, China's CBSteel, and China Communications and Construction Company International (CCCC) have made substantial investments in Brazilian agriculture, steel, and infrastructure, respectively. These deals are a positive first step in gaining investors' trust back and reviving the economy.

The new steel mill in Bacabeira, Maranhão, is expected to create an estimated 5,000 jobs. China's State Grid has also purchased 23% of the shares of CPFL Energia for about $1.83bn.

Embraer, a Brazilian aerospace company, has sold seven aircraft to Chinese firms Colorful Yunnan and Colorful Guizhou Airlines. Banco Modal will act as financial advisor to CCCC for its infrastructure investments in Brazil.

IHS Markit head of Latin America country risk analysis and forecasting, Carlos Cardenas, predicted efforts to privatise at least four airports, possibly privatise electricity distribution, and sell some of the participation that Petrobras has had in certain projects.

These commercial and financial agreements post-Dilma Rousseff’s impeachment signify a strategic pivot towards deeper China-Brazil cooperation. They foster economic growth through increased trade, infrastructure investment, and technological advancement, while enhancing Brazil’s political leverage on the global stage.

The establishment of a clearinghouse for local currencies in the manufacturing industry, enabling trade in Chinese yuan and Brazilian reais, was agreed upon in 2025 as part of the commercial and financial agreements between Brazil and China, reducing their dependence on the US dollar for bilateral trade.
The renewal of a local-currency swap agreement worth 190 billion yuan between the People’s Bank of China and Brazil’s Central Bank supports liquidity and stabilizes exchange fluctuations between the two countries, thereby impacting the finance and energy sectors.
Brazil and China's joint development of the CBERS-5 satellite deepens Brazil's technological sovereignty and disaster response capabilities, contributing to the lifestyle sector through enhanced environmental monitoring and disaster management.
Under Dilma Rousseff's leadership, the New Development Bank's focus on local currency lending and facilitating Chinese capital inflows into Brazilian infrastructure and small business recovery projects aligns Brazil more closely with China’s strategic financial institutions, reducing reliance on Western-dominated financial systems and fostering the business and travel sectors.
Companies such as Hunan Dakang, China's CBSteel, and China Communications and Construction Company International have invested in Brazilian agriculture, steel, and infrastructure, respectively, reviving the economy while creating new job opportunities in the sports sector.

Brazil seeks economic growth through collaboration with China