China Brazil

Brazil’s Lula to visit China after the two countries sign pact to ditch dollar in trade

Brazilian President Luiz da Silva, sworn in on January, will visit China between April 11 and April 14, according to a report from AFP news agency. Lula and business representatives from Brazil were scheduled to visit Beijing last weekend. However, the trip was postponed after the president was diagnosed with pneumonia.

Earlier this week, Brazil and China stroke a trade deal agreement to carry out trade and financial transactions directly, exchanging yuan for reais – or vice versa – rather than first converting their currencies to the U.S. dollar.

“The expectation is that this will reduce costs… promote even greater bilateral trade and facilitate investment,” the Brazilian Trade and Investment Promotion Agency (ApexBrasil) said in a statement.

The two BRICS members completed a record $150.5 billion in bilateral trade last year, making China Brazil’s largest trading partner.

Brazil,  the biggest economy in Latin America, is not the first country to put in place such a deal with China. Russia, Pakistan, and several other countries have similar currency agreements.

The massive deal between Brazil and China has revived concerns about the US dollar’s future.

Earlier this week, China’s national oil company CNOOC and France’s TotalEnergies completed China’s first LNG trade settled in yuan. Approximately 65,000 tonnes of LNG imported from the United Arab Emirates changed hands in the trade, the Shanghai Petroleum and Natural Gas Exchange  said in a statement.

And in December 2022, during a visit to Saudi Arabia, Chinese President Xi Jinping announced that his country would “make full use” of the Shanghai exchange as a platform to carry out yuan settlements of oil and gas trades. China is Saudi Arabia’s top trading partner. 

The Saudi government approved partial membership in the Shanghai Cooperation Organization, a political and security bloc that includes China, Russia and India, the Saudi state news agency reported Wednesday.