Sustaining Green Synergies: The Outlook for China-Brazil Trade and Cooperation  

On November 19, Chinese President Xi Jinping arrived in Brasília for a state visit following his participation in the G20 Summit in Rio de Janeiro. Celebrating the 50th anniversary of diplomatic ties, Xi met with Brazilian President Luiz Inácio Lula da Silva and jointly announced the elevation of bilateral relations to the “China-Brazil Community with a Shared Future for a More Just World and Sustainable Planet.” Similar agreements were signed during President Lula’s visit to Beijing in March 2023. Among the various topics covered in these documents, green cooperation receives significant attention and discussion. 

Green ties between China and Brazil will remain strong under Lula, whose vision for Brazil includes sustainable reindustrialization, environmental recovery and energy transition. Even during the more frictional term of Lula’s predecessor, climate skeptic Jair Bolsonaro, green ties remained steady, with China’s average green investment projects to Brazil seeing a twofold increase from pre-2016 levels. This suggests that this bilateral green relationship will endure after Lula’s term ends in 2026, as it did under Bolsonaro. 

Key Areas of Green Synergy

Complementary interests between China and Brazil are fueling green trade and cooperation across various sectors, including technology, agriculture and finance. 

Technology 

Brazil’s abundant clean energy resources and the government’s commitment to the green transition through incentive policies such as the Brazilian Tax Reform are shaping Chinese investment in the country. In 2023, 72% of China’s USD 1.73 billion inward investment in Brazil focused on renewable energy and sustainability projects. Both state- and private-owned enterprises are investing in Brazil’s green sectors, in projects ranging from building electricity transmission lines to manufacturing hybrid and fully-electric vehicles. This transition demonstrates China and Brazil’s commitment to broadening, deepening and diversifying bilateral cooperation on climate issues, including the transition to a green economy, all of which were encapsulated in the Brazil-China Joint Statement on Combating Climate Change (“Joint Statement”) during Lula’s 2023 visit to China. during Lula’s 2023 visit to China. 

The shift also demonstrates the importance of each country to the other’s economic development. Brazil aims to address the asymmetries in bilateral trade, as it mainly imports manufactured equipment and exports raw materials such as iron ore and crude petroleum. Measures taken to address this include increasing import tax on Chinese EVs from 10% to 18% and attracting Chinese investment in manufacturing to help Brazil move up the value chain. In this context, Chinese investment caters to Brazil’s needs and could help mediate potential negative political momentum against China. China benefits from these results through obtaining stable market access, growth potential of high-tech products, and a crucial political ally for China’s vision for a multipolar world order.  

Agriculture  

Brazil is the top exporter of agricultural products to China, having overtaken the United States in 2018. Brasília and Beijing have formed strategic partnerships in agricultural trade to tackle common challenges such as land degradation, climate change and food security. Among the 37 deals signed during Xi’s trip to Brazil, eight explicitly relate to agriculture, including an agreement between China’s State Administration for Market Regulation and Brazil’s Ministry of Agriculture and Livestock to promote sustainable agriculture. China also joined Brazil’s Global Alliance Against Hunger and Poverty at the G20 Summit. 

The cooperation aligns with both countries’ domestic interests. Former President Bolsonaro joined a pledge to end deforestation by 2030, which has subsequently become a key pillar of Lula’s policy agenda. Meanwhile, China has set goals to develop sustainable agriculture and establish green trade standards during the 14th Five-Year Plan period (2021-2025). In May, the first Brazil-China deforestation- and conversion-free soybean trade agreement was delivered. The two countries have also initiated a pilot beef traceability program to promote sustainable beef production. Looking ahead, China and Brazil will likely deepen the exchange of knowledge, technologies, and best practices for sustainable agriculture, food safety, and innovation.  

Climate Finance 

In the Joint Statement, China and Brazil voiced concerns that the climate finance provided by developed countries falls short of the USD 100 billion annual commitment. They urged developed countries to commit to their new collective quantified goal (NCQG), which was later set at COP29 at USD 300 billion or more per year by 2035. Together with South Africa and India (the other two members of BASIC, a four-country bloc representing the interests of developing economies in global climate discussions), the two countries have also expressed “deep concerns” over what they see as attempts by developed countries to dilute their own climate finance obligations by broadening the contributor base.  

Beyond calling for corrections to the current mechanism, China and Brazil are increasingly active as providers of global climate finance. Notably, China is already the fifth largest climate finance provider globally, while Brazil, once a major recipient of global climate finance, now contributes resources to lower-income nations. China and Brazil are also promoting cooperation through new mechanisms such as the Shanghai-headquartered New Development Bank (NDB), set up in 2016. The NDB has committed to direct 40% of its total approved financing to projects that address climate change between 2022-2026 and pledged to boost climate finance together with other multilateral development banks. With Brazil’s upcoming COP30 presidency, more efforts can be expected from Brasília and Beijing to drive more equitable climate finance solutions. 

China-Brazil Dynamics Reflect a Bigger Regional Trend

The green partnership between China and Brazil exemplifies and reinforces growing multilateral institutional ties between China and Latin America. Across the region, China has emerged as a leading trade partner and investor in infrastructure, renewable energy and sustainable development projects. Programs such as the Chancay Port in Peru under the Belt and Road Initiative have deepened economic links between China and Latin American countries, as well as fostering regional cooperation in areas such as green technology and climate action.  fostering regional cooperation in areas such as green technology and climate action.   

However, this expanding activity has not been without challenges. Concerns about trade imbalances and the negative impact of abundant Chinese imports have prompted pushback. For example, Brazil recently imposed steel tariffs to protect its domestic industry from being undercut by cheaper Chinese steel. Such measures signal a desire to recalibrate the relationship to ensure mutual benefits, especially in sectors critical to economic stability and job creation. The incoming Trump administration might also place political pressure on Brazil to distance itself from China and other Global South countries. Lula’s congratulations to Trump on his victory signaled Brazil’s intention to maintain normal relations with the United States, although the trajectory of this relationship and beyond may be dependent on Trump’s regional approach.  Trump will also not have forgotten that Lula endorsed the Democrats’ presidential candidate Kamala Harris in the run-up to the U.S. election. 

While these tensions highlight the complexities of maintaining balanced trade relationships, they are unlikely to derail the momentum of green trade. Brazil’s focus on attracting Chinese investment in green manufacturing and renewable energy reflects what is likely to be an increasingly pragmatic approach in the face of growing environmental challenges. As both nations prioritize sustainable development and align their goals with broader Global South cooperation, green trade is poised to remain a central pillar of their partnership, influencing the trajectory of regional relations for years to come.