Without a clear policy, Brazil cedes control of strategic businesses to China

China knows what it wants from Brazil—and it's getting it. Without a clear policy of international integration, Brazil is ceding control of strategic assets to the Asian giant, allowing vital sectors such as energy, ports, agribusiness, and critical minerals to fall under Chinese control.

While Brazil operates without defining which sectors are negotiable and which compromise its economic autonomy, the lack of guidelines turns negotiations with a centralized planning regime into a rigged game.

The numbers prove the asymmetry: Chinese investment in Brazil jumped 113% in 2024, reaching US$4.18 billion and making the country the third largest global destination for Beijing's capital, behind only the United Kingdom and Hungary, according to the Brazil-China Business Council (CEBC).

The expansion occurred while international capital flows fell by 11%, according to the United Nations Conference on Trade and Development (Unctad).

Alexandre Uehara, professor of international relations at ESPM, warns of the risk of Brazil replicating a trade relationship based solely on raw material exports. "In this context, the country needs to establish a clearer policy of international insertion, defining its interests," he states.

Global tensions redirect Chinese capital to Brazil

China has increased its investments in Brazil amid heightened trade uncertainty and geopolitical tensions. The country has established itself as the leading recipient of Chinese capital among emerging economies, while Beijing reduced its investments in the United States by 11% and Australia by 41% between 2023 and 2024.

According to Bradesco analysts, the "prioritization of the domestic agenda and the more austere global geopolitical environment" are leading China to adjust its strategies, shifting its focus to partners like Brazil. Diplomacy more aligned with Beijing has favored this shift. President Luiz Inácio Lula da Silva (Workers' Party) visited the country in late March.

Carlos Honorato, a professor at FIA Business School, compared China 's approach to the game of Go, where the strategy is based on slowly encircling the opponent. According to him, Beijing operates with a decades-long perspective, "occupying more space for its own needs."

The goal isn't a large, one-off operation, but the gradual occupation of key positions. Uehara emphasizes that Brazil needs to define how to receive and retain this capital, as without it, the country could quickly lose these resources.

Chinese investments per company in Brazil are smaller, but the presence is broader

CEBC data reveals a shift in profile. Chinese companies are focusing on less capital-intensive ventures, but linked to innovation and energy transition. This fragmentation across multiple smaller initiatives makes tracking difficult and reduces political visibility, while simultaneously expanding reach across multiple sectors.

This shift is not just tactical, but structural. The Chinese economic model allows the state to maintain direct control over large corporations. While Western companies are subject to pressure from shareholders and quarterly results, Chinese companies have centralized decision-making, allowing them to absorb short-term losses to achieve long-term goals.

According to Uehara, this centralization gives Chinese companies "a little more determination" to invest. Many of them are state-owned, whose interests are primarily economic—having business and resources to ensure profitability. But their alignment with the Chinese state's objectives is undeniable.

Analysts point out that Brazil needs to recognize this reality. The problem worsens without a cohesive national policy to protect Brazilian interests.

Energy: the sector most dependent on China

China has consolidated its presence in infrastructure and energy, areas that pose the greatest risk of dependence. Between 2007 and 2024, electricity accounted for 45% of total investment, reflecting the purchase of hydroelectric plants and transmission lines.

Last year, the segment absorbed 34% of new resources, but led in number of projects with 56% of the total — there were 22 projects, the highest number ever recorded in a single year.

This pattern reveals a consolidation strategy: by expanding the number of initiatives in energy infrastructure already under their control, Chinese companies deepen their presence and make any future attempt at reversal more costly.

Most of these new ventures focus on sustainability and green energy, but Chinese interest in traditional sources has not waned. In 2024, oil extraction accounted for 25% of investments in Brazil, reaching approximately US$1 billion, one of the highest recorded in the last decade.

Foreign presence in the electricity sector raises concerns about energy security and the country's decision-making autonomy in the event of geopolitical tensions. Uehara acknowledges that there is discussion about the vulnerability countries face in "sensitive areas" such as energy, since control over generation and distribution confers significant leverage in crisis scenarios.

Chinese investments in Brazil demonstrate control over commodity flows

China's expansion into national logistics completes its siege on key sectors. Control over commodity flow systems—basic products such as grains and minerals—gives Beijing leverage for economic and geopolitical influence.

Cofco International, a Chinese state-owned agricultural trading company, has won the concession for the STS-11 terminal at the Port of Santos (São Paulo), the largest operation in its portfolio outside China, with an expected investment of US$285 million in the first phase. The company also purchased 23 locomotives and 979 railcars to transport up to 4 million tons of commodities annually to this facility.

China Merchants Port took control of the Paranaguá Container Terminal (PR) in 2017 and announced an agreement to purchase the only private Brazilian port terminal prepared to operate large oil tankers in the Port of Açu (RJ).

Other Chinese state-owned companies, such as Cosco and CCCC, have expressed interest in the auction for Tecon 10, Brazil's largest container port facility, located in the Port of Santos, whose concession will require an investment of R$6.45 billion.

The siege on agribusiness

This concentration of port control is no coincidence: it guarantees Beijing not only preferential access to Brazilian commodities, but also the ability to influence prices and trade flows.

Cofco's control over the flow, "from seed to port," allows China to guarantee the continuous flow of resources necessary for its economy, transforming Brazil into a distribution center for the Asian market.

The Chinese presence extends beyond infrastructure. In agribusiness, which accounted for 23.4% of Brazil's GDP last year, penetration extends across the entire production chain.

State-owned Cofco International is one of the largest grain traders in Brazil. In a restructuring move among Chinese companies, it sold its Netherlands-based subsidiary Nidera, which operates in the seed segment, to Syngenta, also owned by the state-owned ChemChina group.

Knowledge transfer and gene banks

Strategic assets such as Dow AgroSciences corn seeds were transferred to Beijing-based groups in a transaction that included full access to the Brazilian corn gene bank. This collection contains varieties and information on the plant's adaptation to the country's climate and soil. The buyers were Yuan LongPing High-Tech Agriculture and CITIC Agri Fund Management. The transaction represents the transfer of knowledge accumulated over decades of research adapted to Brazilian conditions.

The consolidation of China's presence, from input production to port logistics, has generated an international backlash. Republican Senator Tom Cotton included in the budget bill for American intelligence agencies a requirement to investigate Chinese expansion into the Brazilian agricultural sector, citing impacts on the supply chain and global food security.

Chinese Investments in Brazil: Critical Minerals in China's Sights

China has expanded its presence in critical minerals—elements essential for the energy transition and cutting-edge technologies, including niobium, tantalum, and lithium. Brazil has the world's second-largest reserves of rare earths.

China Nonferrous Metal Mining Group acquired the Taboca mining company in Presidente Figueiredo (AM), which operates in the exploration of tin, niobium and tantalum, while BYD, which also produces electric cars in Bahia, acquired mining rights to two lots in a lithium-rich region in the Jequitinhonha Valley (MG) in 2023.

According to CEBC, the mining sector absorbed 13% of the investment in 2024, totaling US$556 million. The risk is that Brazil will limit itself to exporting raw materials, as the country does not yet have the technology necessary to transform these minerals into higher-value products, such as batteries and electronic components, analysts consulted by Gazeta do Povo point out.

Geographical expansion amplifies Chinese influence

China is also changing Brazil's regional dynamics. Last year, Chinese companies invested in 14 Brazilian states, six more than the previous year, the highest number recorded since 2019. The Southeast still leads the total number of ventures between 2007 and 2024, with 54%, but its share of the invested value has declined, falling from a peak of 79% in 2021 to 48% in 2024, one of the lowest levels in the CEBC's historical series.

The geographic dispersion is no accident: it reflects a diversification strategy that reduces the political visibility of the Chinese presence and hinders the articulation of a coordinated national response. Decentralization has led to an increase in Chinese presence in other regions, with the South receiving 17% of investments in 2024, the Northeast 14%, and the North 7%, indicating that Beijing is seeking greater capillarity and regional reach.

Geographic expansion may bring benefits to regions lacking capital, but it also means that Chinese influence spreads to several regional economies, creating multiple points of simultaneous dependence. The consolidation of a presence in sectors such as energy and logistics is present in much of the North and Northeast, reinforcing the strategy of occupying spaces and securing essential resources for the Chinese economy.

Lack of national response to consolidated control

Chinese control over strategic Brazilian assets has gone from a trend to a consolidated reality. The fragmentation of the project into smaller projects and its expansion to 14 states by 2024 reveal its sophistication: it reduces political visibility while expanding its reach and hindering coordination of a national response.

Alexandre Uehara, from ESPM, emphasizes that Brazil needs to define mechanisms to tie down these Chinese investments and ensure they are not redirected if other markets become more attractive. Brazil's vulnerability increases because the country negotiates with a centralized regime capable of imposing long-term goals with greater determination than Western companies pressured by quarterly results.

U.S. Senator Tom Cotton's reaction highlights that the issue transcends bilateral relations. This is a geopolitical dispute in which Brazil has become a valuable player. The central question is not whether Chinese capital should be welcomed, but defining under what conditions and in which sectors this presence can advance.

International experience offers avenues. Australia has implemented mandatory review mechanisms for foreign investments in sensitive sectors, with clear national interest criteria and government veto power. In 2019, the European Union created a regulatory framework that allows member states to block investments that threaten security or public order.

These mechanisms do not prevent investments, but ensure that they occur under conditions that protect national interests — something that Brazil still needs to build.