, VI Conference of BRICS Initiative of Critical Agrarian Studies

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Chinese finance for Brazilian agribusiness and infrastructure: Early signs of a new era?
Gustavo de L. T. Oliveira

Last modified: 2018-12-13


What are the features of Chinese finance for Brazilian agribusiness and infrastructure? And does it illustrate a transformation of the global geography of finance away from the hegemony of the US dollar and corporations from the Global North? Since China became Brazil’s primary trade partner in 2009, there has certainly been a palpable expansion of Chinese investments in Brazil. Simultaneously, major Chinese commercial banks established subsidiaries in Brazil, partially to finance operations of Chinese companies investing across petroleum, mining, infrastructure, agribusiness, and myriad industrial and commercial sectors. While capital flows and investment announcements are tentatively tracked by think tanks and academics examining Brazil-China relations, there is still a dearth of information about their dynamics and mechanisms, and significant debate about their macroeconomic and geopolitical implications. In this paper, I present the first authoritative account of Chinese finance for Brazilian agribusiness and infrastructure, and advance three interlinked arguments. First, the apparent boom of Chinese policy-bank-managed loans to Brazil has only minimal expression for agribusiness and related infrastructure so far, and high estimates (whether as hopes or fears) of Chinese private equity fund participation in new corporate vehicles for farmland acquisition turned out to be highly overblown. Second, and largely overlooked by academics and think tanks so far, major Chinese commercial banks have established subsidiaries in Brazil, and while their operations are still relatively limited in terms of assets and loans, agribusiness features prominently in their loan portfolios, and they are clearly setting up strategic positions for long-term transformation of Brazil-China economic relations and the global restructuring of agribusiness, financial, and currency markets. Third, and most significantly, I demonstrate how the financialization of agribusiness trading companies, and the role of financial firms in providing not only credit lines and other financial products but also producing strategic information, generates a new agribusiness-finance nexus in which Chinese trading companies and financiers with interlocking strategic information may increasingly outmaneuver competitors from the Global North and Brazil alike, particularly in the acquisition and construction of strategic infrastructures. However, these dynamics also reveal various forms of commercial-financial integration, transnational on-lending, and global-level mergers and acquisitions (M&As) of multinational companies that complicate standard characterization of both finance as a sector, and the supposedly national character of particular institutions and capital flows. These are certainly early signs of a new global geography of finance, agribusiness, and related infrastructure. But at the same time, Chinese finance for Brazilian agribusiness and infrastructure is evidently not taking place through new forms of South-South cooperation. Rather, it effectively operating as a mechanism through which Chinese financial firms become incorporated into a global capitalist regime still dominated by the Global North. Nonetheless, their incorporation provides conditions for a state-driven effort to internationalize the renminbi in the long term, and challenge the Global North’s hegemony in finance, agribusiness, and strategic infrastructure.


Brazil, China, BRICS, finance, agribusiness, infrastructure, geopolitics, globalization

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