The Brazilian government wants to diversify its trade relationship with China and agreed on a billionaire loan

Brazil highlighted recent industrialization initiatives during the delegation's trip to China

Translated by: Ana Paula Rocha

Brasil de Fato | Beijing (China) |
Chinese Presidente Xi Jiping and Brazilian Vice President Geraldo Alckmin met in the Great Hall of the People along with many ministers - Mauro Ramos

The Brazilian government wants to boost the diversification of its trade relationship with China. The country has recently got BRL 24,6 billion (almost US$ 4,7 billion) in loans.

The amount, closed with Chinese banks such as the China Development Bank (CDB) and the Export-Import Bank of China (Eximbank), and international ones such as the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB), chaired by economist and Former Brazilian President Dilma Rousseff, took place during the 7th Plenary Session of the Sino-Brazilian High-Level Coordination and Cooperation Committee (Cosban, in Portuguese), which marks the 20th anniversary of the dialogue mechanism and the 50th anniversary of Brazil-China relations.

The China Development Bank has agreed to grant three loans: with the Brazilian Development Bank (BNDES, in Portuguese) for infrastructure (US$ 740,1 million) and other investment actions (US$ 666,1 mi)); and US$ 462,6 million for the Bank of Brazil (BB, in Portuguese), for the "deepening of pragmatic cooperation between Brazil and China", according to the government.

AIIB and BNDES signed a letter of intent to deepen cooperation between the two institutions, which will mean a loan of US$ 250 million for renewable energies, logistics and urban mobility, among others.

The Asian bank also signed an agreement with Brazil’s Ministry of Economy to provide loans (US$ 925,2 million) for emergency support to the state of Rio Grande do Sul, mainly for infrastructure.

Eximbank will provide loans worth US$ 462,6 million to the Bank of Brazil to support foreign trade.

The NDB formalized the commitment announced by Rousseff last month to allocate the equivalent of US$ 1,05 billion for the reconstruction of the affected areas of Rio Grande do Sul (see details here).

Vice Presidente Geraldo Alckmin e NDB's president Dilma Rousseff showagreement to loan US$ 925,2 million to reconstruct Rio Grande do Sul / Mauro Ramos

The delegation led by Brazilian Vice President and Minister of Development, Industry, Trade and Services, Geraldo Alckmin, and made up of six other state ministers, stressed that the trade partnership with China should diversify and be in synergy with the Lula government's initiatives to give new life to national industry.

At one of the press conferences held in Beijing, Alckmin said that the aim is to diversify the economic relationship between the two countries: "We're going to diversify it because it's very [focused] on soy, oil, iron ore. Now, the meat trade is also growing a lot. The objective is, on the one hand, to attract investment – reciprocal investment. [There are already] many Chinese investments in Brazil, and we want more investments, including in the industrial sector."

Brazil’s Secretary for Industrial Development, Innovation, Trade and Services, Uallace Moreira, said that the 7th Cosban meeting had advanced the "possibilities of an alliance between these two countries to strengthen the innovation system and advance highly technologically complex production structures."

Moreira said that all the conversations and negotiations between the vice president and Chief of Staff Rui Costa were aimed at showing "that Brazil has a strategic plan to resume the role of industry in the country's economic growth and development."

Coffee exports and the role of family farming

In the agricultural area, the government signed an agreement to sell 120,000 tons of coffee, worth around US$ 500 million, to the Chinese coffee chain Luckin Coffee, which, in 2023, overtook the multinational company Starbucks in terms of sales value in the country.

The Minister of Agriculture and Livestock, Carlos Fávaro, spoke about the importance of the agreement for Brazil. "To give you an idea of the size of the coffee market evolution: three years ago, China bought US$ 80 million worth of coffee. In 2023, it was US$ 280 million. And now this Chinese company alone buys US$ 500 million." All in all, according to Fávaro, coffee exports to China will reach US$ 800 million a year.

Family farming is responsible for 48% of coffee production in Brazil, according to the Agricultural Census. Alckmin argues that the country needs to support small producers through entities such as the BNDES and Apex (Brazilian Trade and Investment Promotion Agency): "big coffee producers can thrive alone, but the small [producer] need support through fairs to bring in buyers". "This is very important because coffee is an alternative for small producers. You don't need a thousand hectares to produce coffee. It's a good income alternative for family farming, for small farmers [who produce] organic coffee," said the vice president.

Cosban's 7th plenary session signed eight intergovernmental instruments and had 29 other outcomes (read here). Among them were memoranda of understanding for the joint construction of a geostationary meteorological satellite, and cooperation on Public Policies for Micro and Small Businesses.

On the last day of his official visit, Alckmin met with Chinese President Xi Jinping in the Great Hall of the People, where he highlighted the fight against poverty in the Asian country.

"China is inspiring for us, a country that in 40 years has lifted almost 800 million people out of poverty, an unprecedented achievement in the world. President Lula is committed to inclusive development, to helping people improve their quality of life, to sustainable development and combating climate change, in addition to developing with stability and predictability."

Edited by: Rodrigo Durão Coelho