In July 2025, Brazil's Itaú Asset Management launched an ETF tracking the E Fund China A50 ETF, marking a key milestone in the cross-border ETF connectivity program between the Shanghai Stock Exchange (SSE)and Brasil, Bolsa, Balcão (B3). For global investors, particularly those across Latin America, this development signals not just a new product, but a new era of access to China's fast-evolving capital markets.

Following the successful debut of Bradesco's CSI 300 ETF in May, the Itaú listing becomes the second ETF launched under the SSE-B3 framework, and a sign of accelerating momentum. Both funds enable Brazilian investors to gain direct exposure to China's top-performing listed companies—without navigating complex onshore structures or regulatory requirements.

A Curated Entry into China's Economic Core

The China A50 Index, tracked by Itaú's latest ETF, includes many of the most influential and capitalized firms on China's A-share market, spanning industries from financial services to consumer tech. For foreign investors eyeing China's structural transformation—from infrastructure and energy to high-end manufacturing and domestic consumption—this ETF provides a focused, liquid, and locally regulated channel.

“ETF connectivity allows Brazilian and regional investors to participate in China's growth story more seamlessly and efficiently,” said an executive at Itaú's institutional client division. “It's a significant diversification tool at a time when developed markets face increased volatility.”

The appeal is practical: Latin American capital allocators can now access Chinese equity indices through locally listed products, avoiding currency mismatches, capital control risks, or the complexities of QFII and Stock Connect mechanisms.

Policy-Backed Infrastructure, Market-Led Momentum

This ETF connectivity is the fruit of a March 2025 Memorandum of Understanding signed between SSE and B3, under the guidance of the China Securities Regulatory Commission (CSRC). Though both exchanges had cooperated in data-sharing and promotional exchanges since 2005, this MoU formalized a new level of integration—focusing on market infrastructure alignmentand regulatory interoperability.

For China, the program is part of its broader push for "high-level opening-up" of the financial system, attracting long-term institutional capital. For Brazil, it strengthens São Paulo's position as a regional investment hub with ties to Asia's most dynamic economy.

“ETF connectivity reflects deepening financial trust between China and Brazil,” said a capital markets professor at Fundação Getulio Vargas (FGV). “It's both symbolic and practical—a model for other South-South financial partnerships.”

Growing Financial Ties—and a New Bilateral Logic

This connectivity program also mirrors broader macroeconomic trends. Since Brazilian President Luiz Inácio Lula da Silva's 2023 state visit to China, the two countries have expanded cooperation in local currency settlements, green finance, and infrastructure investment.

“The use of RMB in trade and investment has grown significantly. This reduces FX risk and increases bilateral trade efficiency,” noted Roberto F. Rossi, Brazil's Secretary for International Affairs at the Ministry of Finance.

The ETF initiative is a natural extension of this trajectory. As bilateral trade diversifies beyond commodities into clean tech, semiconductors, and digital infrastructure, capital market tools must evolve to match that breadth.

For international banks, fund managers, and corporate treasuries, this means one thing: China is no longer a satellite market—it's becoming a strategic anchor in Latin American portfolios.

Implications Beyond Brazil

Though currently limited to two ETFs, the SSE-B3 scheme is likely just the beginning. The SSE has signaled interest in expanding the product universe to include thematic ETFs—particularly in ESG, smart manufacturing, and AI-related sectors. These mirror areas where both China and Latin America have overlapping strategic priorities.

Moreover, the program offers a template for regional replication. Exchanges in Chile, Colombia, or Mexicomay eventually explore similar connectivity mechanisms with Asia, positioning their markets as investment bridges rather than end points.

A Financial Bridge with Strategic Weight

In a world of shifting geopolitical alignments and decoupling narratives, the China–Brazil ETF program tells a different story: one of financial interdependence built on mutual benefit. It's a reminder that capital markets don't just reflect economic trends—they shape them.

For foreign investors navigating fragmentation in traditional financial centers, this emerging ETF corridor offers not only exposure but resilience. In the long run, it may serve as a cornerstone of a Global South financial architecturethat is more multipolar, more accessible—and more relevant.