Brazil and China push beyond soy as investment flows reshape trade

New momentum as commerce widens beyond the farm

Brazil and China are entering a new phase in their economic relationship. Chinese investment in Brazil more than doubled in 2024 to about 4.18 billion dollars, according to data compiled by the Brazil China Business Council, and the flow of goods is expanding beyond bulk soybeans and iron ore. Capital is moving into power grids, oil, electric vehicles, solar panels, batteries, and digital services. Brazilian companies, for their part, are pressing to sell more value added products in the Chinese market and to remove bottlenecks that slow delivery.

That ambition was on display at the China International Import Expo in Shanghai, where Brazilian executives framed China as the next frontier for growth if logistics and market access keep improving. Christian Gogola, director of Brazilian drink maker Legendaria, argued that Brazilian brands can scale faster if they go directly into the Chinese consumer market.

Introducing his view on export priorities and market strategy, Gogola said the opportunity is broad across product categories.

“China can and should be Brazil’s largest export market for every product category. ‘Go to China’ will be the natural strategy for many Brazilian businesses.”

Why ties are deepening now

Bilateral trade has grown steadily and become more complex. China is Brazil’s largest trading partner, while Brazil ranks among China’s top ten partners. In 2023, total two way trade reached 181.53 billion dollars, up 6.1 percent year over year, and climbed again in 2024 to about 188.17 billion dollars, according to data citing China Customs. The two countries also agreed in 2023 to settle trade in their own currencies, a move that can reduce transaction costs and exchange rate risk for firms on both sides.

Diplomatic momentum has supported the shift. Relations warmed after President Luiz Inacio Lula da Silva returned to office in 2023, and dozens of sector agreements have followed. A package signed in April 2023 covered trade, logistics, services, e commerce, and cooperation in energy and agribusiness. Both countries are members of BRICS, which gives the relationship wider political channels and regular high level dialogue.

President Lula has cast the relationship as durable and central to Brazil’s growth goals. During a meeting with Chinese President Xi Jinping in Beijing in May, he underscored the intent to make the partnership resistant to political shocks.

“We want our relationship with China to be indestructible.”

From soybeans to a broader mix of goods

Agriculture still anchors Brazilian exports to China, but the basket is widening. In 2023, Brazil shipped 58.6 billion dollars in farm goods to China, including soybeans, corn, beef, sugar, and coffee. Brazil is China’s largest supplier of soybeans, chicken, and sugar, and Brazilian coffee has grown fast in the Chinese market as new retail chains and e commerce platforms build demand.

On the import side, Brazil buys machinery, electronics, vehicles, chemicals, plastics, steel, and fertilizers from China. Chinese electric vehicle shipments into Brazil surged in early 2024 as new brands gained traction with consumers. A new 18 percent tariff on imported electric cars later slowed arrivals, a change that has nudged producers to weigh local assembly and deeper manufacturing footprints. Brands active in Brazil’s market include BYD, Chery, and Great Wall.

Services and consumer brands are part of the shift as well. Chinese delivery giant Meituan plans multiyear investment to expand operations under the Keeta brand, and food and beverage chains such as Mixue are sourcing Brazilian fruit for ice cream and tea drinks. Clean energy equipment also ties the two sides more closely. Latin America has leaned into Chinese solar panels and lithium ion batteries, and Brazil accounts for the largest share of those imports by value.

Where the investment is flowing

The 2024 spike in Chinese capital was broad in scope and more diversified than in previous cycles. Brazil attracted 4.18 billion dollars across 39 confirmed projects, a 113 percent increase over 2023. By one benchmark, Brazil was the third largest global destination for Chinese productive investment last year, behind the United Kingdom and Hungary. Deals are smaller on average than a decade ago, which reflects a shift toward a larger number of projects in renewables, manufacturing, and critical minerals.

Power and oil reshape energy links

Energy drew the single largest share of announced and executed projects. About 34 percent went into electric power assets and grids, while roughly 25 percent focused on oil. State Grid Brazil Holding has become a key operator, now supplying about 10 percent of Brazil’s electricity through high capacity transmission lines. The company has said it plans to invest an additional 3.5 billion dollars over the next four years. Many of these projects involve ultra high voltage transmission, which allows more electricity to move over long distances with lower losses, an important feature for linking distant hydro, wind, and solar resources to demand centers.

Ramon Haddad, vice president of State Grid Brazil Holding, described the country as essential to the company’s long term plan.

“Brazil is part of our long term strategy, and we will keep investing in transmission to support reliable supply.”

Other energy investors are active too. CGN has committed funds to wind and solar projects in the northeast, while China’s offshore oil producers have taken positions in Brazil’s pre salt fields. One major oil firm invested nearly 1 billion dollars in 2024, reflecting continued interest in the basin. The combination of grid upgrades, renewables, and oil has tied the two energy systems together in ways that reduce price volatility and improve reliability in Brazil.

EVs, batteries and solar send new supply lines

Manufacturing tied to the energy transition is gaining momentum. Chinese investment in Brazilian factories reached hundreds of millions of dollars across a record number of projects in 2024, with a focus on electrified vehicles, auto parts, household appliances, and equipment for power generation and transmission. Great Wall Motors committed about 6 billion reais, and other automakers are exploring local assembly to serve Brazilian demand and the wider region. The battery supply chain is beginning to form around these moves, and solar photovoltaic producers are expanding distribution and service networks.

Brazil has become a major destination in the region for Chinese clean technology exports. Latin America’s imports of Chinese solar panels and lithium ion batteries rose sharply from 2019 to 2023, and Brazil accounted for the majority by value. During the twelve months to August 2024, about 73 percent of Chinese battery electric and plug in hybrid vehicles exported to continental Latin America went to Brazil. A new tariff slowed shipments later in the year, which in turn strengthened the case for local production. Envision Group has announced up to 5 billion reais for a complex that will make sustainable aviation fuel and green hydrogen, both of which could anchor new industrial clusters.

Logistics remain the make or break factor

Trade growth depends on how efficiently goods get to ports and customers. Brazil has long distances from farm belts and mines to the coast, and exporters still face congested highways, limited rail coverage, and uneven port performance. Cold chain infrastructure for meat and fruit, back hauls for containers, and modern customs clearance will all influence whether Brazilian producers can reach Chinese buyers faster and at lower cost.

Officials and investors are revisiting rail corridors that connect agricultural and mining regions to export terminals. Brazil’s transportation ministry has described stronger interest from Chinese partners in rail projects as both governments align development plans. Progress will hinge on project finance, environmental licensing, and coordination among federal and state agencies. Currency volatility has also influenced deal timing, since a weaker real can make assets cheaper in dollar terms while raising imported equipment costs.

Brazilian companies look to China

As Chinese multinationals scale up across Brazil, more Brazilian brands are aiming to expand in China. The China International Import Expo has become a key platform for testing products, building distribution links, and learning consumer preferences. The 2023 move to settle trade in local currencies offers another tool to control costs and speed up payments, especially for small and medium sized exporters.

Brazilian exporters are shipping a wider range of products to China. A recent snapshot cited 183 Brazilian companies selling into the market, with soy, iron ore, meat, cars, and coffee among the leading items. Coffee producers in particular are exploring new demand in China after facing a 50 percent tariff in the United States. Industrial firms such as WEG in electrical equipment show how Brazilian technology companies can compete in niche segments.

Uallace Moreira, secretary of industrial development at Brazil’s Ministry of Development, Industry and Foreign Trade, said the goal is to use new capital to upgrade domestic industry and move into higher value activities.

“We aim to channel capital so Brazil becomes a producer of technology and an investor in partner economies. Companies on both sides need to move into more branches of the production chain.”

Private sector economists see the same opportunity. Ricardo Martins, chief economist at Planner Investimentos, said deeper two way investment can unlock trade growth across several sectors as both countries play to their strengths.

“With China as Brazil’s main trading partner, two way investment opens doors for greater trade flows. Agriculture, renewable energy, infrastructure, and aerospace all stand to benefit.”

Policy choices and the search for balance

Brazil is managing a delicate balance. The government wants to attract foreign capital, but it also seeks to protect jobs and help local industry climb the value chain. Tariffs on electric vehicles, trade remedies in sectors like steel, and local content rules in energy projects reflect that stance. The number of Chinese manufacturing projects rose in 2024 even as average deal size fell, which suggests investors are adapting to the policy mix with a larger set of smaller bets.

Institutional frameworks are also evolving. A double taxation agreement, first signed in 1991 and amended in 2022, provides tax certainty that supports cross border deals. An investment protection agreement signed in 1994 has not been ratified in Brazil, but the two governments have signed a variety of sector agreements to reduce barriers in services and trade facilitation. The local currency settlement rolled out in 2023 can lower costs for small firms, reduce exposure to dollar swings, and make it easier to price contracts.

Geopolitics and risk

Shifting trade policies outside the region have added urgency to Brazil’s engagement with China. United States tariff changes in 2025 generated uncertainty for exporters and investors. Analysts say the volatility pushed some companies to diversify markets and sourcing, and it strengthened the case for stable demand in China. Reports indicate that some orders in beef and soy were redirected from the United States to Brazil during periods of tariff friction, while Chinese companies rebalanced their Latin America investments.

Inside Brazil, debate continues about how to benefit from Chinese capital without creating over dependence. Some manufacturers, including steel and vehicle producers, are under pressure from imports. Regulators are also weighing digital security concerns related to internet connected vehicles and critical infrastructure. Environmental and social safeguards affect the pace of new projects, particularly in sensitive biomes and indigenous territories. These are not reasons to step back from engagement, but they do require careful oversight and consistent enforcement.

What to watch next

Several signals will show whether the momentum of the past two years is durable. Watch for decisions on rail concessions that would link farm belts and mines to ports, and for progress on large transmission projects that can unlock new renewable capacity. In oil, pre salt tenders and investment plans by Chinese firms will shape output and export flows. In manufacturing, announcements on electric vehicle assembly, battery plants, and solar equipment factories will indicate how far localization will go.

For companies, the keys will include smart logistics planning, close attention to tax and local content requirements, and early work on environmental licensing. As banks and payment platforms expand local currency settlement, small and mid sized exporters may find it easier to enter the Chinese market. If infrastructure and policy align, the next wave of Brazil and China trade could feature more finished goods, cleaner energy, and a denser web of industrial partnerships.

The Bottom Line

• Chinese investment in Brazil rose to about 4.18 billion dollars in 2024, a 113 percent increase across 39 projects.
• Total Brazil and China trade reached about 188.17 billion dollars in 2024, with China remaining Brazil’s top partner.
• Energy drew the largest share of new capital, followed by oil, manufacturing, and mining.
• Brazil introduced an 18 percent tariff on imported electric vehicles, prompting more interest in local production.
• Major investors include State Grid, CGN, Great Wall, Meituan, Mixue, and Envision.
• At least 183 Brazilian companies are exporting to China, with coffee gaining ground alongside soy, meat, and iron ore.
• Logistics bottlenecks persist, making rail links and port upgrades a priority for exporters.
• Local currency settlement and recent bilateral agreements support faster, lower cost transactions.
• Domestic debates focus on industrial policy, digital security, and environmental safeguards as ties deepen.