How China’s state insurer is turning Brazil’s credit crisis into an export advantage

Brazilian importers buying from China are turning to the state-owned Chinese credit insurer, Sinosure, to sustain trade flows that reached US$158 billion in 2024.

Photo: Shutterstock With one of the world’s highest benchmark interest rates among major economies, Brazilian importers who buy from China are turning to a state-owned Chinese credit insurer to sustain trade flows that reached US$158 billion in 2024.

Facing working capital lines that cost upwards of two per cent a month, equivalent to roughly 27 per cent a year according to market calculations, mid-sized importers are securing deferred payment terms directly from Chinese suppliers through credit limits backed by Sinosure, the China Export and Credit Insurance Corporation.

No Brazilian bank is involved, and no domestic credit line is consumed.

Sinosure is one of the world’s largest trade credit insurers, with a total insured volume of US$1.02 trillion in 2024, up 10 per cent from the previous year.

Short-term export credit alone exceeded US$860 billion, covering roughly one in four dollars of China’s total merchandise exports.

The insurer does not move money.

It guarantees payment to Chinese exporters if a foreign buyer defaults.

Under the standard structure, a defaulting buyer has 30 days to settle before the supplier can file a claim.

If Sinosure pays out, the importer’s credit limit is frozen, and the debt is referred to international collection.

The scale of the instrument reflects the depth of the credit problem it is addressing.

Brazil’s Selic rate stands at 15 per cent, among the highest of any major economy, the International Monetary Fund said.

In a 2023 assessment of emerging-market trade finance, the World Bank also estimated the country’s trade finance deficit at US$49 billion, part of a broader financing gap for small and medium enterprises, estimated at about US$600 billion.

Overseas buyers have no direct channel to apply for credit limits or submit financial documentation to Sinosure, whose systems are built around Chinese exporters.

That gap created a market for consultancies that navigate the process on behalf of foreign importers.

Axton Global, a firm operating in 82 countries, is one of them, handling applications, uploading financial data, negotiating with suppliers and securing credit limit approvals that typically take about 21 days.

Igor Sokolov, a managing partner at Axton Global, said the difference in risk appetite between Sinosure and commercial credit in

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