Diplomacy between China and Brazil during the years of Xi Jinping’s government has been characterized by systemic components. First, there have been political and ideological changes in a large part of Latin America and the Caribbean (LAC), in countries like Mexico, Argentina, Chile, Peru, Colombia, and recently in Brazil, with the recent triumph of Luiz Inácio ‘Lula’ da Silva. Six of the continent’s most powerful economies are under progressive governments. The commitment to democracy, gender, and environmentalism has shifted new topics higher on the agenda.
Second, Xi Jinping’s new directional priorities—though limited by domestic policy issues much like Mao Zedong, Deng Xiaoping, Jiang Zemin, and Hu Jintao—have addressed foreign policy adjustments in strategic countries such as Brazil. Historically, both countries have established issues of common interest and managed to adopt similar perspectives in important multilateral dialogues such as the G-20 and in the BRICs forums. Some meeting points, such as respect for self-determination, national sovereignty, and rapidly expanding economies, are seen on the bilateral agenda.
A key element that has definitely influenced bilateral relations in recent years was the coming to power of President Jair Bolsonaro (2019), of which some readings can be made. During his political career, Bolsonaro presented himself as the antithesis of the Workers’ Party (PT) administration. This rejection of the political left wing saw a break in the Brazilian tradition established since 1974 of not arguing about the One China policy.
On the other hand, in the first year of the Bolsonaro government, differences of economic co-existence with China arose. Specifically, there was some opposition from the Brazilian manufacturing sector due to competition from Chinese products and the limited access to the Chinese market. From a political-ideological point of view, the Brazilian president was more in tune with the diplomacy proposed by President Donald Trump, of a commercial offensive on Beijing and criticism of the origin of the COVID-19 pandemic. The Chinese government’s concern was expressed in private, arguing that the Brazilian government was not being pragmatic.
These differences established an unprecedented scenario for the Xi Jinping government as ties with Brazil had historically been shaped by deep commercial and political bonds. Chinese diplomacy responded with abrasive rhetoric and, above all, sought to generate an impact on public opinion and Brazilian economic groups associated with the Chinese market. The business community, particularly the agricultural sector, was not in favor of any policy that would alter trade relations with China, especially since they considered it unlikely that the United States would open up to imports of Brazilian agricultural and mining products.
There was a major effort by Chinese diplomacy to reach out politically to the Bolsonaro administration, after months of China being ignored from its economic and political agenda. In line with Brazil’s liberal economic orientation, it was declared that the commercial policy would focus on free trade and would carry out reforms to open up the Brazilian market so that private companies, national and foreign, could invest in state-owned companies such as Petrobrás and Eletrobrás, and in different economic sectors. Companies in which Chinese capital was interested in participating were excluded.
Pressure from the Chinese government was added to lobbying by Brazilian economic sectors, and from 2019, bilateral relations began to improve. Both countries managed to return to frequent multilateral ties, with a renewed thrust for dialogue at the diplomatic level. For Beijing, a close diplomatic relationship with Brazil is important both for its strategy in Latin America and for maximizing its global leadership.
In this sense, Brazil’s abstention at the UN on accusations of human rights violations against Beijing promoted by the U.S. and some European countries was significant. Itamaraty’s internal evaluation was that placing China in the international framework of a debate on human rights could increase tension on the world stage between the two, in addition to undermining Brazil’s capacity for action at the UN to deal with other crises.
Lula and Xi: A New Strategic Partnership?
Lula’s victory in the recent elections in Brazil represents for China an administration that could act in favor of a more active and constructive foreign policy with Beijing in BRICS and South-South cooperation. Greater ties are also expected in the cultural and scientific fields.
Beyond the potentially positive aspects, the bilateral relationship could also encounter certain complexities. The first is related to the position that Brasilia will assume in the current complex Sino-U.S. bilateral relations, especially after the incident over Nancy Pelosi’s visit to Taipei. This represents a challenge for the Chinese government, assuming that Lula declares himself in favor of maintaining a balance between the two countries as he did in his previous presidential tenure. Geopolitical strains in the Indo-Pacific could lead to increased pressure from the U.S. on China’s strategic allies, such as Brazil.
Another aspect is related to the type of multilateral approach that the Lula government will adopt. Although China and Brazil coincide in a multipolar order, there are differences. More caution is expected in the relationship with Washington due to Brazil’s need to generate autonomous lines of international action. It is not clear how this position with the Chinese Foreign Ministry could become manifest in practice with regards to BRICs.
While there is a clear and manifest willingness on Xi’s part to maintain close cooperation with Lula, it should be within a framework of autonomy vis-à-vis the U.S. However, a re-election of Donald Trump in 2024 could strain this relationship.
Another question is whether or not Brazil under Lula will finally join the Chinese Belt and Road Initiative (BRI). Brazilian diplomacy has a tradition of not participating in those multilateral spaces where it is not a founding member, and while there are many Chinese infrastructure projects underway in Brazil, it is one of the few developing countries that has not yet signed a memorandum of understanding with Beijing on the BRI.
The Brazilian government understands that, being the main recipient of China’s Foreign Direct Investment in the region, there is no urgent need to join BRI and thereby avoid affecting its relations with the United States. This poses another complexity for the Chinese government, which intends to invest in the two largest economies in South America; Argentina signed its entry in February receiving a package of agreements worth $23,700 million. However, the direction of the incoming Brazilian administration is not so clear or defined and everything indicates that a debate will ensue about the steps to follow.
Perspectives and Challenges
During his electoral campaign, Da Silva directed a large part of his speech to the country’s economic development, its role in global value chains and in the area of science and technology. Despite having different visions and proposals to overcome the process, China was always considered a factor of discussion.
Focus was also on the new configuration of the international division of labor in which LAC is relegated to the production of agricultural products. Despite the continuous anti-Beijing statements and conditions by the outgoing government of Jair Bolsonaro, Brazil’s commodity-based surpluses with the Asian economy have increased significantly of late.
Da Silva understands that China will be an important strategic partner for negotiating better terms with all international political actors; however, he is aware that the advance of agribusiness towards the Amazon, the re-primarization of the economy and the strengthening of concentrated agricultural sectors are not the way forward for Brazil. In addition, China’s increased presence in markets such as Argentina and Uruguay are increasingly diminishing the importance of Brazilian products.
How Brazil will get China to buy Brazilian technologies and avoid greater technological dependence in key sectors such as 5G is one of the great challenges of the new government. 5G is presented as a new phase of the mobile telecommunications paradigm, with greater capacity for data transfer and connection between objects than 4G. While disruptive and powerful, its emergence and diffusion are a scalable development of the mobile paradigm.
Thus, there currently seems to be a dilemma between the strong ideological-political affiliation between Brazil and the U.S. and the real economic interests linked to China. In other words, the emerging but solid material basis of economic-commercial relations between Brazil and China is at odds with the long-term relations between the South American country and the U.S.