The GWM factory, setting up in Brazil\u2019s industrial heartland of S\u00e3o Paulo state, is just one of several recent Chinese investments in the country\u2019s clean energy sectors that bring manufacturing onshore. Further north, in the state of Bahia, the world\u2019s largest electric vehicle maker, BYD, has already started<\/a> production of Brazil\u2019s first domestically built battery\u2011electric passenger car, at a plant that was previously owned by Ford.<\/p>\n\n\n\n BYD has two other factories in Brazil: a foothold<\/a> in the south-eastern city of Campinas, established in\u202f 2015, which makes electric\u2011bus chassis and solar\u2011panel modules; and a plant<\/a> in Manaus, Amazonas state, that assembles lithium\u2011iron\u2011phosphate battery packs for BYD buses.<\/p>\n\n\n\n Both the GWM and BYD plants will initially assemble cars from kits imported from China, but the plan is to gradually increase the number of components manufactured in Brazil. \u201cFrom next year, we will localise several items. We need to be a local company, to produce in Brazil \u2013 not just to take advantage of government incentives, but to export to the wider region,\u201d said Ricardo Bastos, GWM Brasil\u2019s director of institutional affairs, in an interview with Dialogue Earth.<\/p>\n\n\n\n Investments by GWM, BYD and Chinese wind turbine maker Goldwind, which purchased<\/a> a former General Electric factory in 2024, align closely with President Luiz In\u00e1cio Lula da Silva\u2019s \u201csustainable<\/a>\u201d reindustrialisation agenda.<\/p>\n\n\n\n \u201cManufacturing output is a permanent conversation in Brazil, but this government is particularly keen on pursuing industrial policies, so there is plenty of space for looking favourably at Chinese investment that goes into manufacturing,\u201d Armando Castelar, coordinator of applied economics at the Brazilian Institute of Economics (IBRE), told Dialogue Earth.<\/p>\n\n\n\n On his state visit to Beijing in May, Lula secured several commitments by Chinese firms to invest in clean energy manufacturing, including from turbine maker Windey to build<\/a> an assembly plant in Bahia. Lula also came back with a USD 1 billion commitment from Envision Energy to build<\/a> a sustainable aviation fuel complex, and a plan from automaker GAC to break<\/a> ground on a new EV plant in Brazil by 2026.<\/p>\n\n\n\n Energy cooperation between China and Brazil is not new. In the 1990s, China looked to Brazil for engineering know-how, with turbines for the Three Gorges Dam manufactured<\/a> in S\u00e3o Paulo. By the 2010s, the dynamic had flipped, and China became a major source of investment and technology for Brazil\u2019s energy sector.<\/p>\n\n\n\n China\u2019s State Grid \u2013 the world\u2019s largest utility company \u2013 has played a central role in developing Brazil\u2019s electricity grid. It entered the market in 2010 and, after a series of high-value acquisitions, began competing in energy auctions. Deploying the \u201cultra-high voltage\u201d transmission technology it developed to bridge vast distances in China, the firm built<\/a> two lines that span the length of Brazil \u2013 and it continues to construct<\/a> some of the country\u2019s most ambitious transmission projects.<\/p>\n\n\n\n Oil has become another pillar of energy cooperation since the 2010s. In 2009, state oil company Petrobras tapped<\/a> a USD 10 billion oil-for-credit line from China Development Bank, beginning a relationship that has seen China become one of Petrobras\u2019s largest creditors and export markets<\/a>.<\/p>\n\n\n\n Chinese investment in Brazilian renewables started with hydropower, which still dominates Brazil\u2019s energy mix. Since 2015, China Three Gorges has deployed more than\u202fUSD 5 \u202fbillion in hydro acquisitions<\/a> and upgrades<\/a>. State Power Investment Corporation followed suit<\/a>, paying USD 2.4 billion for the S\u00e3o\u202fSim\u00e3o dam in Goi\u00e1s state, but both firms have since pivoted to Brazil\u2019s wind-rich Northeast region.<\/p>\n\n\n\n Lula also returned from Beijing touting a pledge from China General Nuclear to invest<\/a> more than USD 500 million in a renewable\u2011energy complex in Piau\u00ed, also in the Northeast, adding to an ever-growing pipeline of Chinese-led wind and solar projects in the region.<\/p>\n\n\n\n These investments are part of what Claudia Trevisan, executive director of the Brazil-China Business Council, described to Dialogue Earth as a \u201cnotable increase in Chinese-led projects linked to sustainability.\u201d<\/p>\n\n\n\n With vast potential for growth in its already significant solar, wind and biofuels sectors, as well as a huge electricity market and a grid that is already made up of 90%<\/a> low-carbon sources, many analysts are excited about Brazil\u2019s green future.<\/p>\n\n\n\n \u201cBrazil has the potential to emerge as a green energy hub, not just for Latin America, but for the world \u2013 and I think China sees this potential,\u201d Paulo Feldmann, an economics professor at the University of S\u00e3o Paulo, told Dialogue Earth.<\/p>\n\n\n\n On signing<\/a> the \u201cFuel of the Future\u201d law, which locks in demand for low-carbon fuels, Lula vowed\u00a0in October 2024 that Brazil will \u201cdeliver the greatest energy revolution on Earth\u201d. Chinese officials and executives also appear optimistic. The CEO of Goldwind has spoken<\/a> of Brazil\u2019s But the twin goals of industrialisation and green transformation do not always align, with surging imports presenting challenges to local manufacturing hopes. Last year, the Global South overtook<\/a> the Global North as the main export market for Chinese solar panels. Meanwhile, emerging EV markets like Brazil remain small in absolute terms, but they are growing<\/a> fast and overwhelmingly dominated<\/a> by Chinese exports.<\/p>\n\n\n\n Both these trends have been positive from a climate perspective. In Pakistan, ultra-cheap Chinese panels have triggered<\/a> a grassroots solar boom, and according to Rodrigo Sauaia, the CEO of Brazilian industry group Absolar, a similar phenomenon is underway in Brazil \u2013 \u201cwe could talk about a solar transformation in the past ten years,\u201d he told Dialogue Earth.<\/p>\n\n\n\n \u201cAs the Global South looks to decarbonise, China\u2019s scale and ability to deliver low-cost clean energy technologies make it an indispensable partner,\u201d said Aya Adachi, an associate fellow at the German Council for Foreign Relations. However, Adachi noted that these countries are not simply looking to import products \u2013 \u201cthey are adopting<\/a> local content requirements and tariffs to encourage more value-added production\u201d, she says, noting that \u201cbetween 2016 and 2024, around two-thirds of global trade defence measures targeting China came from developing countries\u201d.<\/p>\n\n\n\n Edgar Barassa, an expert in e-mobility with Barassa & Cruz consulting, highlighted risks for local industrial capacities. \u201cThe challenge is that Chinese firms \u2013 facing domestic overcapacity in EVs and batteries \u2013 are incentivised to export surplus production or assemble vehicles abroad with minimal integration.\u201d Speaking to Dialogue Earth, he warned that \u201cif left unchecked, this dynamic risks entrenching a peripheral role for Brazil in the clean tech value chain\u201d.<\/p>\n\n\n\n In an attempt to confront this challenge, Bras\u00edlia has combined an arsenal of sticks and carrots to bring production onshore. Among these, the Brazilian development bank (BNDES) has unlocked<\/a> BRL\u202f300\u202fbillion (USD 54 billion) in subsidised credit under the New Industry Brazil strategy, while the auto\u2011focused Mover programme<\/a> provides tax credits to firms so long as they relocate production to Brazil and channel a share of their turnover into domestic research and development.<\/p>\n\n\n\n On the defensive front, the government has reinstated<\/a> import duties on electric vehicles, rising to 35% by July 2026; re\u2011imposed tariffs on solar panels, raising<\/a> them to 25% in November 2024; and approved<\/a> a hike in tariffs on completed wind turbines, from 11.2% to 25% by January 2026.<\/p>\n\n\n\n To some extent, Beijing and its corporate champions also face a dilemma \u2013 whether to keep relying on exports of ultra-competitive Chinese products or to invest in local manufacturing, placating Brazilian demands for investment and helping turn Brazil into a launchpad for Latin American exports.<\/p>\n\n\n\n Brazil can be a base for Chinese production to export to South America,\u201d says GWM\u2019s Bastos, \u201cbut for this, we must comply with a lot of local content rules\u201d.<\/p>\n\n\n\n Concern about \u201cunbalanced trade\u201d with countries in the Global South is increasingly prevalent among Chinese think-tankers. Liu Hongzhong, for instance, who teaches economics at Xi\u2019an Jiaotong University in Shaanxi, urges<\/a> \u201cmore balanced and sustainable economic and trade cooperation with countries in the Global South\u201d.<\/p>\n\n\n\n According to Adachi, \u201cBeijing is aware of the tensions created by growing trade imbalances with the Global South, but unlike its often forceful responses to trade actions by high-income nations, China has largely avoided retaliating against developing countries\u201d.<\/p>\n\n\n\n The clutch of manufacturing deals that Lula secured in May are evidence that Beijing is listening, but the jury is still out on how successful Brazil will be in capturing more of the cleantech value chain from China.<\/p>\n\n\n\n \u201cI am cautiously optimistic,\u201d said Barassa, \u201cbut the challenge lies in translating memoranda of understanding into investment projects that generate measurable socio-economic outcomes\u201d.<\/p>\n\n\n\n Celio Hiratuka, an associate professor at the State University of Campinas, echoed this sentiment: \u201cIt\u2019s too early to tell if the government has been successful,\u201d he told Dialogue Earth. \u201cGWM appears serious about selecting suppliers and is betting on local content, but I think that BYD is still testing the market \u2013 their strategy might be to postpone the moment they need to [begin to] produce here in Brazil.\u201d <\/p>\n\n\n\n![\"Two](\"https:\/\/dialogue.earth\/content\/uploads\/2025\/08\/President-Lula-and-Lei-Zhang-at-the-signing-of-an-agreement-_Ricardo-Stuckert_Palacio-do-Planalto_5fac444a54.jpg\")
<\/div>A \u2018notable\u2019 increase<\/h2>\n\n\n\n
\u201cunrivalled\u201d wind resources, while \u201cgreen development\u201d was placed at the centre of China-Brazil cooperation last November, when the two countries signed an agreement on aligning China\u2019s Belt and Road Initiative with Lula\u2019s New Industry Brazil<\/a> and Ecological Transformation<\/a> plans \u2013 even if Brazil has continued to snub membership of China\u2019s flagship overseas investment initiative.<\/p>\n\n\n\nSticks and carrots<\/h2>\n\n\n\n
I am cautiously optimistic, but the challenge lies in translating memoranda of understanding into investment projects that generate measurable socio-economic outcomes<\/blockquote>Edgar Barassa, expert in e-mobility<\/cite><\/div><\/div>\n\n\n\n
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