China and Brazil signed a memo Friday in Brasilia in which Brazil said it recognized China's full market economy status.
Chinese Minister of Commerce Bo Xilai and Brazilian Foreign Minister Celso Amorim signed the memo on behalf of their respective governments.
The memo was a major result of Chinese President Hu Jintao's visit to Brazil that began Thursday.
China and Brazil agreed in the memo that they will strengthen cooperation and "appropriately handle" issues arising from border inspection and quarantine.
They also agreed to enlarge cooperation in areas of aircraft making.
Chinese officials said the recognition of China's full market economy status enriched the contents of China-Brazil strategic partnership relations, and will "strongly expand the opportunities of trade and investment."
It will also improve the competition environment for both Chinese and Brazilian firms, said Chinese officials.
China-Brazil trade and economic cooperation has been growing quite fast over the past several years. Two-way trade grew 58.4 percent during the January-September period this year.
Chinese statistics show that China-Brazil trade volume hit 9.296 billion US dollars the first nine months of the year, more than that of the whole year of 2003.