CBN丨China-Brazil currency swap deal provides positive example in China-LAC cooperation

摘要：The PBOC also renewed a bilateral currency swap agreement with the central bank of Brazil on the same day, with a total value of 1

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China-Brazil financial cooperation highlights vitality in China-LAC community with a shared future;Hong Kong seeks to ink free-trade deals with Gulf nations.

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The central banks of China and Brazil on Tuesday inked a memorandum of understanding (MOU) on financial strategic cooperation, according to the People's Bank of China (PBOC).

The PBOC also renewed a bilateral currency swap agreement with the central bank of Brazil on the same day, with a total value of 190 billion yuan, or 157 billion reais. The agreement is valid for a period of five years and can be renewed upon mutual consent, it said.

The increasingly close economic and trade relationship between the two countries calls for strengthening financial collaboration. Since 2009, China has consistently been Brazil's largest trading partner. According to Chinese customs statistics, bilateral trade reached $188.17 billion in 2024, a year-on-year increase of 3.56 percent.

China primarily exports machinery, chemicals, telecommunications equipment and textiles to Brazil, while importing iron ore, soybeans, crude oil and pulp.

The significant level of trade has highlighted the need for a more stable and efficient settlement mechanism, as the traditional dollar-based system exposes businesses on both sides to the volatility of the dollar exchange rate and incurs additional transaction costs.

Beyond trade facilitation, the China-Brazil currency swap mechanism also creates a more stable financial environment for mutual investment, and help the South American country tap into yuan liquidity to stabilize its foreign exchange market

This development not only underscores the deepening of financial ties between China and Brazil, but also serves as a positive example for other Latin American countries grappling with the volatility of the international financial market.

In 2024, China-LAC trade surpassed $500 billion for the first time, more than 40 times the amount at the beginning of this century. Over 20 LAC countries have joined the Belt and Road Initiative by signing different cooperation memoranda with China, and Colombia confirmed its participation in the BRI during the the China-CELAC (the Community of Latin American and Caribbean States) Forum in Beijing on Tuesday.

From Chancay Port to the Phoenix Park Industrial Estate, numerous major projects have taken root and yielded fruitful results. In cutting-edge sectors, such as new energy, photovoltaics, electric vehicles, digital technology and cross-border e-commerce, China-LAC cooperation continues to expand, with mutual benefit and win-win cooperation providing strong momentum for the partnership.

Trade between China and Colombia hit a record of 48.34 billion yuan in the first four months of 2025, an 8.5 percent increase year-on-year, marking the highest trade volume ever recorded for the same period, according to data from China’s General Administration of Customs on Wednesday. Colombia has become China’s third-largest source of imported coffee and fresh-cut flowers. From January to April, China imported 470 million yuan of Colombian coffee, representing 14.2 percent of its total coffee imports. Fresh-cut flower imports from Colombia rose 14.6 percent year-on-year to 13.6 million yuan, representing 10 percent of China’s total in that category.

GBA express

Hong Kong Chief Executive John Lee Ka-chiu on Tuesday sought Kuwait’s support for free trade agreements between the SAR and Gulf Cooperation Council members during his visit to Kuwait, which chairs the GCC this year. Lee added that Hong Kong could support Kuwait’s Vision 2035, which aims to establish the country as a regional financial center, as the city is ready to offer valuable expertise in law, finance, and talent development.Shenzhen has established a 5 billion yuan investment fund for the semiconductor and integrated circuit industry, with focus on building, reinforcing and expanding the industrial chain around Shenzhen's major integrated circuit manufacturing clusters. Shenzhen's semiconductor and integrated circuit industry investment fund completed its business registration on Tuesday, and it is managed by Shenzhen Capital Group. CATL’s retail book-building has received over HK$147 billion via margin financing, marking an oversubscription of 63 times, as local lenders race to attract orders with offers, media reports today. More than 20 cornerstone investors from around the world have committed a total of US$2.63 billion to the IPO. It is seeking to raise at least HK$31 billion from its IPO in Hong Kong. The Chinese battery giant's listing is scheduled for May 20.

Industry and company news

Yunnan province's coffee exports surged 122 percent to 310 million yuan in the first quarter from a year earlier, CCTV reported, citing official figures. The southwestern Chinese province exported 3.25 tons of coffee last year, up 358 percent from 2023.China's Wandong Medical, the medical devices unit of Midea Healthcare, inked a deal with Brazil's VMI Group on May 12 to set up a JV in the South American country focusing on the research, development, and localized production of high-end medical equipment, including MRI, CT, and Cath lab, Midea said yesterday.Baidu is reportedly in talks with Swiss Post-backed public transport service provider PostAuto to debut its Apollo Go robotaxi service in Switzerland. The Chinese tech firm may also launch its driverless ride-hailing service in Türkiye.Global electric vehicle sales are expected to exceed 20 million this year, accounting for more than one-quarter of overall sales, according to the Global EV Outlook released by the IEA today. EVs are projected to reach around 60 percent of the total in China this year, it added.Chinese e-commerce giant JD.com's first-quarter net profit surged 53 percent to 10.9 billion yuan, according to its latest earnings report. Quarterly revenue totaled 301.08 billion yuan for the quarter ending in March, up 15.8 percent from a year earlier. Revenue from new businesses, which includes food delivery this year, rose 18 percent to 5.8 billion yuan, compared with a year-on-year decline of 19 percent in the same period last year. JD.Com's food delivery business average daily orders will soon exceed 20 million, with the number of registered stores surpassing one million, JD's CEO Sandy Xu said yesterday. The instant delivery service brings new users to the Chinese e-commerce platform, as its active users surged over 20 percent in Q1, achieving a double-digit growth for the sixth consecutive quarter.China's State Administration for Market Regulation (SAMR) and four other government departments recently summoned three major Chinese food delivery platforms—JD.com, Meituan, and Ele.me—to address core issues in the food delivery industry, the regulator announced Tuesday. The companies were asked to abide by laws and regulations, compete fairly and safeguard the legitimate rights and interests of consumers, business operators and food delivery workers.

Asia-Pacific highlights

China today launched two direct international road freight routes to Hanoi, with trucks departing from Nanning and Kunming. This is the first time Chinese freight vehicles enter Vietnam under the Greater Mekong Subregion Cross-Border Transport Facilitation Agreement.Cambodia has seen a significant uptick in the number of Chinese tourists to its famed Angkor Archeological Park in the first four months of 2025, with a total of 36,368 Chinese holidaymakers visited Angkor during the period, up 29 percent year on year.China and Saudi Arabia have signed contracts at a forum on Tuesday in Beijing that exceeded $4 billion to increase their agricultural cooperation.