A historical fact happened recently here in Brazil. For the first time in 80 years USA has ceased to be the largest trading partner of Brazil.

Guess who is now the largest trading partner of Brazil, accounting for 16% of Brazilian exports and imports? If you thought about China, you are right.

Trade relations between Brazil and China grew more than 60% in recent years and, believe it or not, the competitiveness of some sectors such as textiles, forced hundreds of Brazilian companies to increase productivity to lower costs of production. In a way, the expansion of trade with China has made many Brazilian companies be more competitive.

However, the commercial relationship between the two countries is very uneven. 80% of the purchase of China from Brazil are products such as soybeans, iron and oil, meanwhile Brazil bought manufactured products from China.

This is one of the reasons why the Brazilian president is making his second official visit to China. In the first official visit several agreements were signed, but few were completed. Brazil wants China to invest more here because that way the two countries would benefit.

For now, the only agreement between the two countries is related to the exploitation of huge oil reserves in the Brazilian coast. Chinese state enterprises will invest in Petrobras (Brazilian state company specializing in exploration for oil in the pre-salt layer offshore).

Another agreement was the construction of a Chinese Chery Automobile factory in Brazil. Moreover, large Brazilian companies want to sell manufactured goods to China. The diversification and expansion of trade between Brazil and this giant Asian is seen as essential to the Brazilian government because the sale of commodities, although profitable, does not have a high added value.
But this visit is not only about expanding and diversifying trade between the two countries. Brazil wants a permanent seat in UN Security Council because, according to the Brazilian government, does not make any sense to maintain a group of countries that no longer represents the new world order.

The biggest problem in this case is to convince China that the G4 (Germany, Brazil, India and Japan) deserves a permanent seat at UN Security Council. However it is perfectly understandable that China does not want the participation of India and Japan at the Security Council group because of geopolitical reasons (the strengthening of these countries in some ways represents some kind of decline of Chinese influence in Asia).

Finally, the commercial and political relations between China and Brazil need to mature. Although there is not mistrust between the two countries - because in some ways are complementary (economically and politically) – there are a lot of things missing to the partnership between them to be strategically aligned.