Now contributing over 14% (1) of global trade flows, China’s central role in Global Value Chains (GVCs) has created both opportunities and challenges for emerging economies. Brazil, Latin America’s largest economy, finds itself at the crossroads of this transformation.
Over the past two decades, China has become Brazil’s largest trading partner, driving a significant boom in bilateral trade. In 2023 alone, trade between the two countries reached USD 159.6 billion (2), with China accounting for nearly a third of Brazil’s exports. However, this headline figure conceals an underlying asymmetry: more than 95% of Brazil’s exports to China are primary goods—primarily soybeans, iron ore, and crude oil. In contrast, the vast majority of Chinese exports to Brazil are manufactured products.
This trade pattern is emblematic of a broader concern: Brazil’s deepening reliance on extractive exports may be accelerating its deindustrialisation, undermining economic diversification and complexity. Despite receiving over USD 72.5 billion in Chinese foreign direct investment (FDI) since 2005—China’s fourth-largest FDI destination globally (3)—Brazil’s productive structure remains skewed toward low-complexity sectors, raising questions about the developmental impact of this engagement.
Agribusiness, Inequality, and Structural Transformation
At the heart of Brazil’s economic engagement with China lies the agribusiness sector—a major source of export revenue and foreign investment, but also a source of mounting developmental tension. While Chinese foreign direct investment (FDI) in Brazil spans sectors from energy to infrastructure, agribusiness remains a strategic priority. This focus is driven in part by China’s need to secure stable food supplies, especially meat and soy, to meet the demands of its growing middle class and changing dietary preferences.
Yet, this sectoral emphasis brings long-term consequences. Agribusiness, by nature, generates lower value-added compared to high-tech manufacturing or knowledge-intensive services. Despite driving short-term trade surpluses, an overreliance on primary exports risks entrenching Brazil’s role in global value chains as a provider of raw materials, rather than enabling technological upgrading or productivity growth.
Moreover, this trade and investment dynamic is probably reinforcing spatial inequalities within Brazil. Export-led agricultural growth has been highly uneven across the country, with certain areas capturing the lion’s share of benefits—mainly those already endowed with infrastructure, land, and capital. Other regions, particularly in the North and Northeast, remain structurally excluded from these gains, deepening regional disparities in income, employment, and development opportunities.
The broader implication is that Brazil’s growing integration into China-led trade circuits may be accelerating a pattern of uneven development: strong export performance at the national level masks the erosion of industrial capacity and growing territorial inequality at the subnational level. Without deliberate efforts to diversify its export base, strengthen regional linkages, and promote sectors with higher economic complexity, Brazil risks locking itself into a growth model that is both extractive and exclusionary.
Between Dependence and Diversification
Latin America’s experience with China is often interpreted through two competing lenses. One sees China as a developmental partner, bringing capital, technology, and new markets. The other sees an emergent dependency, with Latin America slipping into a neocolonial role as a provider of raw materials to feed China’s industrial machine. Brazil exemplifies this tension. Its booming exports may look like success, but a closer examination reveals a fragile foundation—one built more on land and minerals than on innovation or industrial complexity.
This imbalance is not just economic; it is political. The strategic choices Brazil makes—what it exports, where it attracts investment, and how it distributes the gains—will shape its development trajectory for decades. These choices are unfolding in a global context marked by shifting supply chains, rising economic nationalism, and renewed interest in industrial policy among advanced economies.
As the United States and European Union seek to “reshore” production and reduce dependence on China, Brazil’s position as a key raw material supplier becomes more vulnerable. Without a clear strategy for productive upgrading and technological deepening, Brazil risks becoming locked into a peripheral role in the global economy.
Why This Matters
Understanding the structure and impact of Brazil–China relations is crucial not just for Brazil, but for the Global South more broadly. Many developing countries are grappling
with similar questions: how to benefit from China’s demand without becoming overly dependent; how to attract FDI that enhances, rather than entrenches, economic asymmetries; and how to harness globalisation for inclusive, sustainable development.
This research contributes to these debates with new empirical evidence and a clear policy message: not all integration is equal, and development outcomes depend heavily on domestic institutions, sectoral strategies, and the nature of external engagement. For Brazil, rethinking its position in global trade—and the kind of growth it pursues—is not only urgent but necessary.