Perhaps nothing has shaped Latin America and the Caribbean in the last decade more than China's new engagement, which has been newly manifested in Chinese Premier Li Keqiang's ongoing official visit to four South American nations.

Brazil is the first stop, because the country is not only the largest economy in South America, but also occupies prominent positions in several intra-regional organizations, such as the BRICS, the G20, the BASIC (Brazil, South Africa, India, and China grouping in climate change negotiations).

Actually, it is the second time in less than a year that a top Chinese official visits Brazil, which reflects the strategic importance China attaches to the Sino-Brazilian relations. 

Brazilian President Dilma Rousseff echoes Chinese endeavor enthusiastically. As one Brazilian official once put it, the bilateral ties are a relationship between the largest developing country in the Western hemisphere and the largest developing country in the Eastern hemisphere.

Trade is the first engine that drives Sino-Brazilian economic dynamics. China is the largest trading partner of Brazil, while Brazil is China's largest trading partner in Latin America. According to Brazilian statistics, bilateral trade between the two countries increased 13-fold in value terms between 2001 and 2013. 

As China secures natural resources from this trading relationship, Brazil also wins a lot from China. China's import arguably is the primary reason for Brazil to escape the 2008 global recession relatively unscathed. Large Brazilian companies benefit substantially from Chinese demand. Vale became one of the largest mining companies in the world. Petrobras, not only experienced a huge boost in productivity and export, but also received Chinese investment in deep-sea oil fields. Embraer opened its first airplane factory overseas in China and the country became its second largest consumer behind the US.

However, the slowdown in China and the plunge of global commodity prices, coupled with Brazilian domestic problems, have dragged down the growth of the Brazilian economy. In 2014, the economic growth rate stood at just 0.1 percent.

Li's visit gives a big boost to the sluggish economy, as he offered reassurance that Chinese import demand will be sustained in the long term. In addition, China agreed to import Brazilian beef, which will further expand the trading composition. 

The second engine that supports bilateral ties is investment. A transcontinental railway project linking the Atlantic Ocean to the Pacific Ocean through Brazil and Peru has been endorsed by Li, which will allow Brazil to receive and ship products from the Pacific side, lowering the export and import costs. This is also an opportunity for China to export its railway technology, thus sustaining the sector in a context of domestic economic slowdown.

Foreign direct investment in Latin America fell sharply last year as investors turned their attention to other regions. According to a recent analysis by FDI Markets, capital investment in the region fell 39 percent, while the number of greenfield FDI projects declined 16 percent in 2014. In the context, investment from the Chinese side provides timely help.

A major shift appeared in China's investment sector last year. For the first time in history, China's outward direct investment (ODI) overtook inward foreign direct investment (FDI) in 2014, making the country a net capital exporter. Although China is only the 12th largest investor in Brazil, the future potential to be tapped is enormous.

It can be argued that China-Brazil relations are in a transitional phase. Both sides are engaged in surpassing commodities trade and deepening cooperation in other aspects. For example, China and Brazil's roles in emerging institutions such as the Asian Infrastructure Investment Bank and the BRICS Development Bank are clear indicators of such trends.

Brazil was the first country to have a strategic partnership with China in Latin America. As a long-standing partner, Brazil will play a major role in the cooperation plans between China and Latin America, not only in the economic sphere, but also in the political arena.

Cui Shoujun is director of the Center for Latin America Studies and a research fellow of the National Academy of Development and Strategy, Renmin University of China (RUC); Gaio Doria is a research fellow at the Center for Latin America Studies, RUC. opinion@globaltimes.com.cn