Brazilian and Chinese officials have launched a joint Brazil-China investment promotion fund in order to increase productive capacity.

Representatives from Brazil's ministry of planning and the China Latin American Industrial Cooperation Investment Fund (Claifund) made the announcement on May 30, at the 2017 Brazil Investment Forum in Sao Paulo.

The fund, now in operation, will have an initial sum of $20 billion to finance investment projects in Brazil that are of interest to both countries.

At the signing ceremony, Chinese Ambassador to Brazil Li Jinzhang said the fund is the result of a long-running joint effort and reaffirms the countries' strategic bilateral ties.

"The fund reflects a higher level of cooperation for both countries, as well as cooperation between China and Latin America," Li said. "It will create a new model of financial cooperation."

According to Dyogo Oliveira, Brazil's Planning Minister, commerce between China and Brazil has enjoyed rapid growth in recent years, as have investments as well. As one of the major countries investing in Brazil, China has helped significantly in the country's social development.

"China boosted its interest in Brazil by initiating the fund. It is an innovation in the cooperation of both countries," Oliveira said.

According to Li, the new fund will serve as a mechanism to promote investment by bringing the public and private sectors of both countries together on a variety of projects.

"As soon as the fund is established, both sides will be committed to various areas of cooperation under the agreement, including infrastructure, resource, equipment manufacturing and agriculture," said Li.

"Both sides fund together, manage together, discuss together and make decisions together," Li added.

The innovative mechanism is the first of its type in Latin America, as Brazil becomes the first country in the region to participate in a fund that is jointly governed by China.

"This launch is of particular importance as it confirms the mutual confidence Brazil and China share," said Oliveira. "It is taking place at a time when we and our international partners are seeking support for projects in infrastructure, energy and technology."

According to Brazilian President Michel Temer, who delivered a speech at the opening ceremonies of the Investment Forum, the country has emerged from severe economic recession since the first quarter of 2017.

"With the prices of goods and the jobs market back on track, the Brazilian government would like to send the signal that the economy has gone back to growth," said Temer.

"More than 40 countries have investments in Brazil, covering more than 20 fields," Temer said. "The government will promote reform in labor and social security in order to create a more convenient and safer environment for investors."

Li expressed confidence that the fund would play an important role in the productive capacity cooperation of the two countries.

According to the new agreement, projects approved by the fund's board of directors will receive financing from Claifund, the Brazilian Development Bank and Caixa Economica Federal, Brazil's federal savings bank.

According to the agreement, for every dollar put up by Brazil's financing sources, China will put up three, with the initial $20 billion comprised of $5 billion from Brazil and $15 billion from China. Both sides have said they are willing to provide more financing, if projects call for it.

Brazil's Agriculture Minister Blairo Maggi also spoke highly of the fund. "China's trust toward Brazil is ever greater. Brazil is a great supplier of raw materials, trade is always growing. The fund is very important and goes in this direction," he said.

"If it finally becomes a successful project, this mode of cooperation will be copied in other countries as well. As far as I am concerned, this fund will undoubtedly be prosperous," said Li.

Oliveira said that China and Brazil should build more platforms of communication and promotion of interaction in a variety of areas.

"BRICS is stepping into its second decade, and the ninth meeting of BRICS leaders will take place in China's coastal city Xiamen in September," said Oliveira. "This is another important moment in the two countries' relationship."

China and Brazil established a comprehensive strategic partnership in 2012; three years later China became Brazil's leading trade partner.