Photo: China-1-yuan-2006. By: Braginjohn Source: WikiCommons
Brazil and China have jointly announced the establishment of a Clearing House to facilitate business transactions and loans between the two nations, bypassing the need for the U.S. dollar. The Industrial and Commercial Bank of China will serve as the operating bank for the Clearing House in Brazil, enabling Brazilian and Chinese businesses to conduct transactions and loans using the yuan instead of exclusively relying on the dollar, as it has been the case until now. This landmark initiative aims to enhance trade cooperation and minimize potential U.S. influence on bilateral business ventures.
For over a decade, China has been Brazil’s primary trading partner, with the volume of transactions hitting a record-breaking $150 billion in 2022. However, Brazil’s trade balance reveals a surplus of $29 billion, primarily driven by raw material exports to China, while the Asian nation predominantly exports higher value-added products to Brazil. The establishment of the Clearing House serves as a strategic move by China to bridge this gap and foster deeper trade relations with Brazil. This endeavor has been a driving force behind the ongoing negotiations, which have been progressing in stages over recent months.
Plaza, N. (2023). Brasil y China sellan acuerdos comerciales Dejando de Lado Al Dólar Estadounidense, CriptoNoticias.
Find out more:
Folha de S.Paulo. Sanches, M. (2023). Como Brasil e China pretendem Fechar Negócios sem USAR Dólar Americano