How much and how China invests in Brazilian agriculture – and why this bothers the US

As in other sectors of the economy, China's presence in Brazilian agriculture is growing rapidly throughout the production chain. More than just ensuring domestic food supplies, these investments reflect the Asian country's broader ambition: to consolidate its influence in an increasingly multipolar geopolitical context, reducing US dominance.

This movement is not going unnoticed by Americans. In July, in the U.S. intelligence agency budget bill for fiscal year 2026, Arkansas Senator-elect Tom Cotton (R-Ark.) included an investigation into Chinese influx into the Brazilian agricultural sector and its impacts on the supply chain, the global market, and food security.

For Alberto Pfeifer, a senior researcher at Insper Agro Global and coordinator of the International Strategy Analysis group at the University of São Paulo (USP), the initiative comes as no surprise. "There are already intelligence services, or espionage services, if that's the American term, mapping this," he says.

"The senator simply lays bare a reality: that China has an interest in better understanding Brazil's agricultural production and providing multidimensional security. Some talk about food security, but I prefer the term 'multidimensional security,' because it's not just about food, it's about energy, territorial, social, political, environmental—in short, multiple."

For him, in an interdependent world made up of multiple global actors, it is natural for China to invest in Latin America, and also for this to disturb American dominance in the region.

"This is no longer the world of the Cold War, where there was an absolute separation between two poles. In a context where, based on the cartography desired by the current American administration, it appears that it will be a world of zones of influence, of a condominium of power, and not of polarization, the United States' natural sphere of influence is America, and therefore, a greater Chinese presence disrupts, distorts, and upsets this balance," he explains.

According to him, this is why the United States is so attentive to this Sino-Latin American connection, particularly in relation to the largest provider of multidimensional security to the world, which is Brazil.

Sanctions on Brazil have nothing to do with trade, says researcher

This further explains the Donald Trump administration's offensive against the country led by Luiz Inácio Lula da Silva (Workers' Party) in recent months. As Pfeifer describes in an article co-authored with economist Marcos Jank , the movement is not "about judicial proceedings, nor virtual censorship; much less about commerce," but "about a reconfiguration of the spheres of projection and dominance over territorial neighborhoods."

After establishing, in April, a 10% tax on all Brazilian products entering the United States, Trump raised the tax, albeit with a series of exceptions , to 50% – the highest imposed by the American government on another country.

In the letter announcing the tariff increase, released on July 9, the US president cited, among other reasons, the case facing former president Jair Bolsonaro (PL) in the Supreme Federal Court (STF), which Trump classified as a “witch hunt”.

On the 15th, the Trump administration also opened an investigation against Brazil, through the Office of the United States Trade Representative (USTR), into Brazilian actions, policies and practices considered “unreasonable” or “discriminatory” and that “burden or restrict American trade.”

The investigation order mentioned the Pix payment system, the trade of pirated products on Rua 25 de Março in São Paulo, illegal deforestation for agricultural purposes, the protection of the ethanol market, corruption, the protection of intellectual property, and preferential tariffs adopted by Brazil in trade with partners such as Mexico and India.

On the 30th, the US government, through the Treasury's Office of Foreign Assets Control (OFAC), included Supreme Court Justice Alexandre de Moraes on the list of authorities sanctioned under the Magnitsky Act, which provides for the freezing of assets and properties in the United States and prohibits US citizens from carrying out any transactions with those affected by the measure for an indefinite period.

The US government justified the decision by claiming that Moraes is responsible for “an oppressive campaign of censorship, arbitrary detentions that violate human rights, and politicized prosecutions, including against former President Jair Bolsonaro.”

Prior to this, the minister, his family members, and other members of the court had already had their American visas revoked, preventing them from entering the United States.

More recently, former Health Minister Alexandre Padilha, his wife and daughter, as well as Mozart Julio Tabosa Sales and Alberto Kleiman, were also banned from entering US territory for their involvement in the creation of Mais Médicos.

The United States calls the program a “coercive labor export scheme by the Cuban regime that exploits medical workers through forced labor.”

On August 12, in a report published by the US State Department, Brazil was cited as a country where the human rights situation worsened in the year 2024.

The document cites as examples of the framework actions taken by the STF to censor Bolsonaro (PL) and his allies, the blocking of X and the deaths caused by military police.

In a letter sent by Trump to Bolsonaro last weekend, the American president confirms the political motivation behind the tariff hike.

"I share your commitment to listening to the voice of the people and am deeply concerned about the attacks on free speech—both in Brazil and in the United States—coming from the current administration. I have strongly expressed my disapproval, both publicly and through our tariff policy," he wrote.

For Pfeifer, the tariff hike imposed by Trump on Brazil is far from being limited to a trade issue. "Some people have started making the comment that the United States is pushing us into China's lap, as if the Americans were so foolish as to not foresee this kind of move," he argues.

"The United States expects a change of government in Brazil"

"The United States is expecting a change in government, or a shift in Brazil's international position. It's a government-to-government relationship: the United States is expecting a change in Brazil's presidential term. This is the final American calculation," the researcher states.

The Insper researcher explains that as Brazil moves closer to China, it will likely face more sanctions from the United States, of all kinds—political, legal, and economic—which will likely worsen the domestic situation, impacting the social context and weakening the Brazilian government.

"There's an implicit game being played between three global economic agents or political actors: Russia, China, and the United States," Pfeifer points out. "I don't know to what extent China will also want to engage in friction with the American government in this region, which the United States has already stated, demonstrated, outlined, and made very clear is its sphere of influence," he says.

He explains that it's an interrelated game, in which zones of influence are predominant, not exclusive. Russia over its immediate region, evidenced by the conflict with Ukraine; China over territories like Taiwan and Hong Kong; and the United States over the entire American continent.

"The Chinese will trade, trade, and invest with Brazil until it poses a threat, an affront to American interests in the region. Then the Chinese will back down, because they don't want the same thing happening in their region; they don't want the Americans getting involved in Taiwanese issues, for example."

Sales to China represent 30% of Brazilian agricultural exports

The growing Chinese appetite for Brazilian produce in recent years is impressive. According to data from the Ministry of Agriculture, Livestock, and Supply (MAPA), in 2024, Brazil exported US$164.3 billion in agricultural products. Of this amount, US$49.7 billion, or 30.2%, corresponded to sales to China, Brazil's main trading partner.

To give you an idea, the value is more than double the amount imported in agricultural products by the 27 countries of the European Union together – US$32.2 billion, or 14.1% of the total.

The main Brazilian items shipped to the Asian country in the sector, in 2024, were soybeans (US$ 31.6 billion), beef (US$ 6 billion), cellulose (US$ 4.6 billion), cotton (US$ 1.7 billion), sugar (US$ 1.4 billion) and chicken meat (US$ 1.3 billion).

In 2000, China's share of Brazilian agricultural export revenues was 2.7%, and the Asian country was only the sixth largest destination for the sector, behind the EU, the United States, Argentina, Japan, and the United Kingdom.

While the total value of Brazil's agricultural exports grew 699% over 24 years, the amount spent annually by China on Brazilian agricultural products soared 8,747%.

China invested almost R$400 billion in Brazil in 16 years

In addition to acquiring commodities and goods from Brazilian agribusiness, China's growing interest in Brazilian agriculture also occurs through acquisitions, joint ventures, and asset purchases, as well as granting credit, supply contracts, and investments in logistics and infrastructure.

According to the most recent survey by the Brazil-China Business Council (CEBC), between 2007 and 2023, the Asian country invested US$73.3 billion – almost R$400 billion at the current exchange rate – in 264 projects in Brazil.

Of this amount, agriculture directly received US$2.4 billion (3% of the total), but a large part of the other Chinese investments in Brazil also benefit agribusiness by helping to develop the country's industry and infrastructure in order to expand production and facilitate the flow of exports.

The Brazilian electricity sector, for example, attracted US$33.2 billion in Chinese capital between 2007 and 2023, equivalent to 45% of the total for the period. The manufacturing industry received investments reaching US$5.3 billion (7%), while infrastructure projects attracted US$3.3 billion (5%) from Chinese companies.

Considering the stock of investments in the period, Brazil is the fourth country that received the most contributions from China abroad, being the only one considered developing among the five largest recipients of Chinese productive capital in the world.

The United States leads with US$193.6 billion, followed by Australia (US$102.6 billion) and the United Kingdom (US$99.9 billion).

Chinese investment in Brazil grows 33% amid decline in foreign investments worldwide

In 2023 alone, the latest year available in the CEBC survey, Chinese investments in Brazil totaled US$1.73 billion, an increase of 33% compared to the previous year.

The growth occurs against a relatively low baseline, given that there was a 78% drop in investments the previous year. Even so, it reveals an atypical Chinese renewed interest in the Brazilian economy, given that foreign investment in Brazil overall fell 17% in 2023, according to the Central Bank (BC).

The Organization for Economic Cooperation and Development (OECD) calculated a 7% drop in the global flow of foreign investment and a 13% drop in the inflow of external resources into the Brazilian economy.

The United Nations Conference on Trade and Development (UNCTAD) indicated a 2% drop in foreign investment in the world, in general, and a 10.2% drop in foreign contributions to Brazil.

"China has been adopting a more cautious and selective stance towards foreign investment for several reasons," says an excerpt from an analysis by Bradesco, which sponsored the CEBC survey.

"The prioritization of the domestic agenda and the more austere global geopolitical environment are leading the Asian country to adjust its strategies and focus on strategic partners, including Brazil," the bank's analysts continue.

Although the United States maintains its position as the main source of foreign direct investment in Brazil, China has significantly increased its capital participation in the country in recent years.

According to a Central Bank report, contributions from companies with ultimate American control over Brazilian companies jumped, between 2010 and 2023, from US$109.7 billion to US$272.9 billion, an increase of 148.7% in 13 years.

China, in turn, jumped from US$7.9 billion to US$53.2 billion, equivalent to a 575% increase in the indicator over the same period. As a result, the Asian country jumped from 16th to 5th among the sources of foreign capital invested in Brazil.

China expands its participation in the entire Brazilian agricultural production chain

One of the largest grain trading companies currently operating in Brazil is Chinese state-owned Cofco International. The company, which operates in 36 countries, entered the Brazilian market a decade ago when it acquired control of the Dutch company Nidera, which already operated in Brazil selling soybean and corn seeds, and of Noble Agri, then a unit of the Singaporean Noble Group, which already had four sugarcane mills in Brazil's Center-South region.

In 2018, Nidera was sold by Cofco to Syngenta, the world's largest manufacturer of agricultural pesticides and one of the largest seed suppliers, which a year earlier also came under the control of a Chinese company, ChemChina.

The list of investments in Brazilian companies by Chinese companies in recent years is extensive. It includes, for example, the trading and input supply companies Fiagril, in Mato Grosso, and Belagrícola, in Paraná, which were acquired in 2017 by the former Hunan Dakang, now PengDu, the agricultural arm of the Shanghai Pegxin Group.

In the same year, Dow AgroSciences' corn seed assets in Brazil were acquired by Chinese companies Yuan LongPing High-Tech Agriculture and CITIC Agri Fund Management for US$1.1 billion. The deal included full access to the Brazilian corn germplasm bank.

China invests in Brazilian logistics and ports to transport agricultural products

In the logistics sector, one of the biggest highlights occurred in 2022, when Cofco won the 25-year concession for the STS-11 terminal, in the Port of Santos (SP).

The first phase of the project was inaugurated in March of this year, following an investment of US$285 million. With construction completed next year, the company expects to reach 14.5 million tons of grain handled annually at the terminal, which will be the largest in its portfolio outside of China.

The Chinese giant recently acquired 23 locomotives and 979 railcars to transport up to 4 million tons of soybeans, corn, and sugar annually to the Port of Santos terminal. The grains will arrive via the Rumo railroad connecting Rondonópolis, Mato Grosso, to the city of São Paulo, while the sugarcane derivatives will use the Cofco road-rail terminal in Votuporanga, São Paulo.

This isn't the only Chinese involvement in Brazilian port terminals. In 2017, control of the Paranaguá Container Terminal (TCP) was acquired by China Merchants Port (CMPort), a Hong Kong-based operator, for US$935 million, equivalent to R$2.9 billion at the time.

Since joining the CMPort portfolio, which has port terminals in 25 other countries, TCP has grown from an annual movement of 810,000 TEUs (unit equivalent to a 20-foot container) to 1.56 million TEUs in 2024, according to a recent statement from the operator.

Last year, TCP joined the so-called ESA route, which connects port terminals in Buenos Aires, Montevideo, and Santos directly to the Asian market, passing through Singapore, Hong Kong, and the Chinese cities of Yantian, Ningbo, and Shanghai.

Earlier this year, CMPort also announced an agreement to purchase the only private Brazilian port terminal prepared to operate very large oil tankers (VLCC), in the Port of Açu (RJ).

The auction for Tecon 10, Brazil's largest container terminal, at the Port of Santos, which has yet to be scheduled, is also attracting interest from Chinese operators. Cosco, a Chinese state-owned shipping company, and CMPorts have reportedly contacted the government and the National Waterway Transportation Agency (Antaq) for more information about the auction.

The companies could also form a consortium with another state-owned company from the Asian country, the China Communications Construction Company (CCCC).

With a projected investment of R$6.45 billion and a contract with an initial term of 25 years, extendable for up to 70 years, the project will place the Port of Santos among the 20 largest in the world, allowing the movement of 10 million containers per year.

Although Brazil chose not to join the Belt and Road Initiative, also known as the New Silk Road, Lula promised, at the end of last year, a "synergy" between the Chinese program and projects of interest to Brazil from the New PAC.

The New Silk Road consists of a trillion-dollar Chinese program launched in 2013 that foresees the implementation of works and investments to expand markets for China and the country's presence in the world through infrastructure works, including highways, railways, ports and advances in the energy sector, such as oil and gas pipelines.

One of the initiative's major ventures in South America is the Port of Chancay in Peru, inaugurated last November by Cosco. The megaport, the result of a US$1.3 billion investment from the Chinese government, is expected to reduce costs and timeframes for imports and exports between China and Latin American countries across the Pacific Ocean.

In June, Brazil and China signed a study agreement for the construction of a railway linking the Chinese port in Peru to Brazilian territory. The Brazilian government envisions a route passing through the states of Acre and Tocantins, connecting to the West-East Integration Railway (FIOL) in Bahia.

Fiol itself, a 1,527 km project between Ilhéus and Caetité, in Bahia, will have Chinese investment, according to an agreement signed between the Chinese Fund for Investment in Latin America (Clai-Fund), the China Railway Engineering Group (Crec), the Bahian government and Bahia Mineração.

Investments also include the production of SAF and agricultural machinery and financing

The advance of Chinese capital in the Brazilian countryside promises to continue in the coming years. In May, during a government delegation visit to China, businesspeople from the Asian country announced a total of R$27 billion in investments in Brazil through the Brazilian Trade and Investment Promotion Agency (ApexBrasil).

A participant in the meeting, the Chinese company Envision, stated that it will invest up to R$5 billion in the production of sustainable aviation fuel (SAF) from sugarcane in Brazil.

In the same official mission, the Ministry of Agrarian Development and Family Farming (MDA) and the Ministry of Agriculture and Rural Affairs of China signed a memorandum of understanding to promote the mechanization and technological advancement of family farming in Brazil.

The document provides for the strengthening of institutional, investment, and research relations between China and Brazil in the small-scale agricultural sector, with a focus on advancing technologies, specialized machinery, and the application of renewable energy, especially for family farming and small farmers.

Indirectly, China has also increased its investments in the Brazilian agricultural sector through financial institutions. In 2012, the Industrial and Commercial Bank of China (ICBC) obtained authorization to operate in Brazil, offering financing for bilateral trade and domestic infrastructure and manufacturing, with strong potential to meet agribusiness demands.

The bank was responsible for carrying out, in 2023, the first transaction in Brazil with Chinese currency, without using the dollar, a model defended by Lula for commercial transactions between BRICS member countries.

In June of last year, the National Bank for Economic and Social Development (BNDES) signed a contract with the China Development Bank to finance infrastructure and industrial projects in Brazil, in the areas of electricity, manufacturing, agriculture, mining, water, climate change and green development.