On 1September 2017, in the presence of Chinese President Xi Jinping and the visiting Brazilian President Michel Temer, China Eximbank, represented by Chairman Hu Xiaolian, signed with Banco do Brasil the Major Financing Terms Agreement at the Great Hall of the People in Beijing. According to the agreement, China Eximbank will provide Banco do Brasil with US$300 million working capital loan to be primarily used for addressing the growing demand for trade finance in the context of a closer China-Brazil economic and trade relations. The signing of the agreement will help boost the liquidity of Banco do Brasil and lower the financing cost for Chinese companies in conducting business with their Brazilian counterparts. Such arrangement will enable Banco do Brasil to function as a platform for facilitating the export and import of products, equipments and services between the two countries.

China and Brazil enjoy strong economic and trade ties and high complementarities of their economies. In face of the sluggish recovery of the world economy and falling prices of international commodities, the bilateral trade maintains sound momentum for growth, with trade volume increasing year by year. Currently China has become Brazil’s largest trading partner, export market and source of imports. China’s exports to Brazil mainly include mechanical equipment, computer, communication equipment, instruments, textile, steel and transport utilities. China’s imports from Brazil mainly include iron ore and concentrate, soybean, crude oil, paper pulp and soybean oil.

At present, with the gradual upgrading of product structure and more diversified ways of cooperation, demand for short-term trade finance in both China and Brazil is growing rapidly. However, the insufficient liquidity in Brazil’s financial institutions coupled with high funding costs has to some extent hindered the development of bilateral trade. As a major force supporting China’s foreign trade, investment and international economic cooperation, China Eximbank has adopted innovative financing model to tackle the problems, which is enhancing cross-border banking cooperation to break bottlenecks impeding bilateral trade growth, facilitate funding channels and cooperation between companies. China Eximbank will further contribute to China’s trade and investment cooperation with Latin America, support Chinese companies’ “go global” efforts and greater presence in the region.

The singing of the above mentioned agreement is a significant achievement of the cooperation between China Eximbank and Banco do Brasil. It is also an important manifestation of closer cooperation between financial institutions under the new "1+3+6" framework for practical cooperation between China and Latin American and Caribbean countries proposed by Chinese President Xi Jinping, and the new "3x3" model for industrial capacity cooperation between China and LAC countries proposed by Chinese Premier Li Keqiang. Moreover, it is one of the important deliverables of the Brazilian President Michel Temer’s visit to China. Going forward, China Eximbank will step up its financing support to industrial capacity cooperation between China and Brazil in areas of infrastructure construction and equipment manufacturing, and further promote bilateral relations in general and economic and trade cooperation in particular.