Brazil needs support from China as the economy of the South American nation is undergoing an adjustment period, said a scholar at a Chinese think tank.

“In the fields of finance, energy, transport, agriculture and climate, Brazil needs the support and participation of China… Brazil has a relatively high reliance on external financing, which accounts for 5 percent of [its] GDP [gross domestic product],” Xie Wenze, from the Institute of Latin American Studies, Chinese Academy of Social Sciences, told Chinese state-run news agency Xinhua.

“Therefore, Brazil needs the continuous economic development of China and the stabilisation in the value of the yuan so that [China] can provide Brazil effective support in loans,” Mr Xie was quoted as saying.

He added the two nations should strengthen industrial co-operation, including laying down relevant policies and technical standards.

His remarks came as the Brazilian central bank warned that a deeper-than-expected economic contraction could be expected in Brazil this year. The central bank said on Thursday the Brazilian economy is expected to contract 2.7 percent in 2015, compared with a 1.1 percent decline in its June estimate, news agency AFP reported.