What’s next for China and Brazil’s cooperation on green value chains? Experts explain 

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Wang Yi, Former Vice-President of the Institutes of Science and Development , Chinese Academy of Sciences, Fernando Sampaio, Director , Brazilian Beef Exporters’ Association (ABIEC), Cao Derong, President, China Chamber of Commerce for Imp. & Exp. of Foodstuffs, Native Produce and Animal By-Products (CFNA)

• China and Brazil recently signed a joint statement on combatting climate change.
• Three experts outline how this could facilitate cooperation on sustainable supply chains.
• Four key areas highlight the path towards greener trade relations between the two countries.

In April this year, Brazilian President Luiz Inácio Lula da Silva paid a state visit to China, during which an array of bilateral cooperation agreements were signed, including the Joint Communiqué on Further Strengthening China-Brazil Strategic Partnership and Brazil-China Joint Statement on Combating Climate Change. The deepening of cooperation between two major countries from the Global South is of great strategic significance for improving current geopolitical relations – in new fields such as environmental protection, climate change response, and the low-carbon economy.

China and Brazil have committed to collaboratively support eliminating global illegal logging and deforestation, through effectively enforcing their respective laws on banning illegal imports and exports.

In the past, China has actively promoted forest protection and sustainable governance within its borders, and progress has been fruitful. In the future, China and Brazil will play an important synergistic role in the protection of Brazil’s tropical rainforest by creating a sustainable agricultural product trade system and green value chain.

Three experts dive into the implications and prospects of this recent Brazil-China cooperation.

Changing the global governance landscape

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Releasing signals of optimism, our vision leans towards fuelling multilateral cooperation via bilateral exchanges.”— Wang Yi, former Vice-President of the Institutes of Science and Development, Chinese Academy of Sciences

The signing of the China-Brazil Joint Statement on Climate Change served as a beacon of positivity, showing Brazil’s strong will to intertwine climate and nature goals with its economic transition and development. Moreover, this bilateral agreement is capable of leading to multilateral cooperation on a larger scale. Many international multilateral processes – exemplified by the Paris Agreement – start from a bilateral agreement.

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Brazil and China have critical roles to play in jointly promoting Global South-South cooperation.”— Fernando Sampaio, Director, Brazilian Beef Exporters’ Association (ABIEC)

Brazil and China have a shared future in global governance. Up until now, the rules of the game – whether it’s in trade or deforestation, in agenda setting or regulation-making – have mostly been dominated by developed countries. In this regard, developing countries led by China and Brazil, especially BRICS, can jointly draw up a new map.

Instead of setting strict standards, China and Brazil are exploring a more cooperative win-win methodology, under which different stakeholders could exchange their best practices and lessons learnt, as well as co-design the best way forward in building a green value chain. Our collective voice needs to be heard loud and clear in the concert of global governance, generating powerful impacts.

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China and Brazil’s joint efforts in global, common governance will provide insights and experience for other countries, especially developing countries.”— Cao Derong, President, China Chamber of Commerce for Imp. & Exp. of Foodstuffs, Native Produce and Animal By-Products (CFNA)

First, strengthening cooperation in green transformation will make China and Brazil leading climate advocates within developing countries. There is a potential for us to develop a climate cooperation model that is collective, anti-unilateralism and discourages green trade barriers.

In addition, BRICS countries’ agricultural development has a far-reaching impact on the world, whose output value accounts for more than 50% of the world’s total agricultural production and is directly related to 42% population’s livelihood. Based on that, China and Brazil’s green agriculture transformation will contribute to the establishment of the green value chain. It can also enable a more sustainable and stable global agricultural product trade network.

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What’s the World Economic Forum doing about climate change?

Climate change poses an urgent threat demanding decisive action. Communities around the world are already experiencing increased climate impacts, from droughts to floods to rising seas. The World Economic Forum’s Global Risks Report continues to rank these environmental threats at the top of the list.

To limit global temperature rise to well below 2°C and as close as possible to 1.5°C above pre-industrial levels, it is essential that businesses, policy-makers, and civil society advance comprehensive near- and long-term climate actions in line with the goals of the Paris Agreement on climate change.

The World Economic Forum’s Climate Initiative supports the scaling and acceleration of global climate action through public and private-sector collaboration. The Initiative works across several workstreams to develop and implement inclusive and ambitious solutions.

This includes the Alliance of CEO Climate Leaders, a global network of business leaders from various industries developing cost-effective solutions to transitioning to a low-carbon, climate-resilient economy. CEOs use their position and influence with policy-makers and corporate partners to accelerate the transition and realize the economic benefits of delivering a safer climate.

Contact us to get involved.

How to build greener trade relations

China has been Brazil’s largest trading partner for 14 consecutive years since 2009. In 2022, the bilateral trade volume between the two countries reached $171.49 billion, a year-on-year increase of 4.9%. China is undoubtedly the biggest importer of Brazilian soybeans, beef, chicken, pork and other agricultural products. According to China’s customs statistics, China imported 91.08 million tons of soybeans in 2022, of which 54.4 million tons came from Brazil, accounting for almost 60% of the total. Also, 2.69 million tons of beef was imported, and Brazil accounted for 41% of the total with 1.11 million tons.

To build a sustainable trading system and a green supply chain, Wang Yi, Fernando Sampaio and Cao Derong identified four pathways:

1. Establish a better exchange mechanism

To guarantee the smooth flow of information, a better bilateral exchanging mechanism is needed. For public sectors, this means carving out a pathway for an institutionalised cooperation mechanism, building bridges for government-level communication and sustainable cooperation strategy development. For businesses, the journey involves agreeing on a set of shared criteria, which could act as a beacon, guiding the way towards enhanced information sharing among companies and across borders.

Such synergy between the public and private sectors has been underway and shown progress. For example, the Beef Alliance, facilitated by the Tropical Forest Alliance, joins leading businesses in the food industry and civil society groups to set criteria for Brazil’s beef exports that limit illegal deforestation and land conversion. This initiative could drive system-wide change across one of the world’s largest cattle-trade relationships and could become a model for other big economies across the world.

2. Innovative finance for nature

To mitigate the financial gap, mechanisms for investment for nature should be established. Multilateral development banks (MDBs) can play a more critical role to lead nature finance – with a total of $81.7 billion climate finance distributed to the world in 2021. That’s why MDBs should be fully engaged to scale up the climate and biodiversity financing.

But it shouldn’t stop there. We should also harness the power of other green finance tools. Take, for instance, China’s carbon market – it carries potential to halt illegal deforestation in Brazil. By encouraging Chinese companies to purchase carbon credits from Brazilian forests, we can tackle environmental degradation more effectively and turn a new leaf in curbing illegal deforestation.

3. Drive sustainable consumption demand

To unlock the power of the market, consumer’s demand should serve as a driving force. It’s a chain reaction – choosing environmentally-friendly products not only lessens environmental pressure directly, but also encourages business to incorporate sustainable practices into their operations.

Over the past five years, there has been a 71% rise in online searches for sustainable goods globally, but the label of sustainability comes at an extra cost. Consumers, while understanding the importance of sustainable choices, often find themselves constrained by their budgets, and end up purchasing the cheaper, conventional ones. Thus, making sustainability more affordable remains a key challenge – it’s like a puzzle piece we still need to fit into the picture.

4. Facilitate climate and nature synergy

It is time to bring biodiversity to the forefront of combating climate change discussions. Climate change and biodiversity – the twin challenges of the Anthropocene epoch – are inextricably interconnected. According to IPBES and IPCC, 82% of the net carbon land sink is from forests, a crucial habitat for global biodiversity. Similarly, well-managed biodiversity plays a vital role in climate adaptation.

Now, with Brazil to host the UNFCCC COP30, in the Amazonian city of Belém in 2025, we look forward to seeing strengthened synergy between climate goals and biodiversity objectives, and solutions at the climate-biodiversity-economy-society nexus.