Lessons from China for Brazil

Jorge Arbache - Professor of Economics, board member, analyst, writer, speaker, and business columnist specializing in Latin America.

15 de maio de 2025

China’s heavy dependence on energy imports to sustain its growth became one of its main points of strategic vulnerability. However, instead of treating this limitation solely as a problem to be mitigated, China transformed its energy insecurity into one of the driving forces behind industrialization, technological innovation, and even global leadership.

What few anticipated was that this transition—initially driven by a defensive need—would evolve into a far-reaching and long-term economic offensive. This is precisely where a key lesson lies for Brazil: that natural advantages, when combined with strategy, can be converted into productive, commercial, and even geopolitical power.

Indeed, China became the world’s largest oil importer around 2017, with a significant portion of that oil passing through the Strait of Malacca—a chokepoint vulnerable to geopolitical tensions. But China may be even more vulnerable to the effects of a potential international conflict that disrupts supply transit through the South China Sea. For a country pursuing strategic sovereignty, such dependence could be deemed unacceptable.

China sought to reduce this vulnerability not merely by replacing energy sources, but by creating an entirely new industrial ecosystem around clean technologies: solar and wind energy, batteries, electric vehicles, hydrogen, green digital infrastructure, and more. This represents a paradigm shift. The energy transition was not seen solely as an environmental requirement, but as part of a broader project of autonomy, productive modernization, and active international engagement.

The Chinese government coordinated industrial, innovation, and trade policies to support and catalyze this transformation: long-term planning with specific targets for renewable energy, energy efficiency, and emerging technologies; structured domestic demand, with incentives for solar generation, electric vehicle adoption, the development of charging networks, and public procurement policies; the formation of national champions, with financial, regulatory, and technological support for companies; control of critical supply chains, with mastery of refining and processing of minerals like lithium, cobalt, rare earths, and graphite; and external financing as a tool of influence, with the export of equipment and infrastructure through the Belt and Road Initiative. This latter initiative—part of China’s response to its strategic vulnerabilities—unsurprisingly focused on connectivity investments in West Asia.

As a result, China is significantly expanding its renewable energy matrix and has built global leadership in key value chains essential for advancing the climate agenda—in 2024, two-thirds of new global investments in renewables occurred in China. Thus, from being a net energy importer, China has become an exporter of clean energy solutions. This helps explain why President Xi is taking a leading role in the global climate agenda.

The trade and technological surplus generated by this green industrialization, therefore, helps to fund the very project of autonomy and energy security. If the climate agenda strengthens China’s political and economic position, it’s plausible to assume this helps explain why the United States withdrew from the Paris Agreement and other climate initiatives.

Brazil, unlike China, does not start from a position of energy scarcity. On the contrary: it has one of the cleanest electricity matrices in the world, with about 90% of its electricity generated from renewable sources. Additionally, it holds vast capital and natural resources—sun, wind, freshwater, biomass, forests, biodiversity, fertile lands, and many critical minerals, including niobium, copper, lithium, graphite, and high-grade iron ore, along with large reserves of rare earth elements. The country also has a recognized industrial capacity, universities, and companies with technological and production expertise.

The major difference lies in how these advantages are mobilized. While China used the energy transition as a central pillar of its national development policy, Brazil still treats these advantages largely as primary assets to be exploited in an uncoordinated, short-term, and extractive manner—with low value addition, institutional fragmentation, and no coordinated strategy.

But this can change. The new logic of global productive relocation—driven by the pursuit of greener, safer, and more resilient supply chains—opens space for the powershoring strategy: the trend of multinationals and countries relocating energy-intensive industries to places with abundant clean, secure, and low-cost energy.

Brazil, with its plentiful renewable energy, can attract green electro-intensive industries such as steel, aluminum, biofuels, fertilizers, among many other sectors and their value chains. However, this requires planning, infrastructure, and a modern industrial policy based on sustainability, innovation, technology, and value addition. The appropriate response would be a policy of industrializing comparative advantages—bringing together common interests from agriculture, manufacturing, services, and mining.

China’s lesson is clear: natural resources and clean energy only translate into development when tied to a coordinated economic strategy. For Brazil to seize this opportunity, a few elements are crucial: a long-term vision that makes the energy transition and natural capital structural pillars of national development—not mere byproducts; green industrialization that supports value chains around clean energy—from sustainable agriculture to electric mobility, green chemistry, responsible mining, and digitalization; conversion of vast and rich natural capital into an asset class; targeted public and private financing using public banks, concessions, and regulatory frameworks to unlock investments in strategic sectors; intelligent international integration, with active participation in new clean global value chains and use of economic and commercial diplomacy to attract partnerships and companies; and innovation as a driver, with investments in science, technology, and workforce training to ensure Brazil becomes a provider of solutions—not just commodities. The BRICS and COP30 could serve as platforms for these agendas.

What China shows us is that the energy transition and natural capital, when well-articulated, are more than a matrix shift: they are a development strategy, a tool of sovereignty, and a source of geopolitical power. Brazil holds many of the resources the world is seeking in the era of decarbonization, but unlike China, it still lacks a clear strategy to turn this wealth into technology, innovation, income, skilled employment, and global leadership—and, in doing so, reduce poverty and inequality while promoting broad, shared, and clean development. It's time for Brazil to turn its abundance into a strategic lever. The window of opportunity is open, but it may not remain so for long.

This post was originally published in my column in the economics and business newspaper Valor Econômico on May 15, 2025.

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