Last month, the Brazilian Ministry of Finance submitted an application for the issuance of panda bonds to the China National Association of Financial Market Institutional Investors. The goal is to issue the first sovereign bonds denominated in RMB within China. Brazil will become the first Latin American country to register and issue sovereign panda bonds. Panda bonds are RMB bonds issued by foreign governments, international development agencies, and large multinational organizations within China. Non-Chinese institutions can raise funds without worrying about exchange rate fluctuations.
"Lulaito promotes panda bonds, Brazil has an ambitious plan to enter the Chinese bond market." According to Bloomberg's report on July 17th, the Brazilian Ministry of Finance revealed at the beginning of the month that the government hopes to raise about 10 billion yuan, and the first 'panda bond' transaction could take place as early as this year.
Reports indicate that this will be the first time a Latin American country issues pandas bonds. It is also part of the Brazilian government’s efforts to diversify its financing sources, reduce its dependence on the US dollar, and deepen financial cooperation with China.
China and Brazil have long been closely linked in economic and trade relations. By 2025, their trade volume is expected to reach $171 billion, a growth of 8.2%. Brazil exports $100 billion to China, while importing $71 billion from China. China has been Brazil’s largest trading partner for 17 consecutive years.
Brazilian officials hope that the government's first issuance of panda bonds will set a precedent for Brazilian corporate borrowers, thereby opening up new financing channels. This initiative is particularly relevant for exporters like Vale, Vega Group, JBS, and Embraer, which have close income transactions with China.
"For companies with significant operations in China and the ability to benefit from a diversified investor base, this is a more targeted market. China has been working towards greater openness for foreign issuers and seeking to attract as many companies as possible to build a more stable market, which will be done progressively."
According to US media, this plan aligns with Lula’s broader strategy – to closer relations with China, the largest emerging economy among the BRICS countries, and to broaden Brazil’s financing options, enabling it to reduce its dependence on the US dollar while not completely abandoning it.
Brazilian treasury officials believe that there is still room for Brazil to increase the proportion of its debt linked to foreign currencies. Currently, this proportion is 4% of the total debt. This year, Brazil issued bonds worth 5 billion euros, which is the largest global debt transaction in the country's history, and it is also the first time in over a decade that Brazil has issued euro-denominated bonds.
For Brazilian companies, using foreign currencies more extensively, combined with existing trade relationships, could expand financing options. At the same time, maintaining closer ties with Asian investors is also becoming an increasingly attractive factor.
Bloomberg reported that in 2023, Brazilian pulp producer Eldorado Brasil Celulose completed an export transaction settled in RMB and real, avoiding the US dollar. This transaction reflects the company’s strong trade ties with China, allowing it to officially launch RMB-based business operations.
On July 15, the People’s Bank of China released a set of latest figures: In the first half of 2026, the issuance of Panda Bonds exceeded 160 billion yuan, an increase of 69% compared to the previous year. As of the end of June 2026, the cumulative issuance reached over 1.3 trillion yuan, with more than 110 issuers involved, covering 24 countries and regions across five continents: Asia, Europe, Africa, South America, and North America.
