The return of Luiz Inácio Lula da Silva (PT) to the government offers an opportunity for Brazil to resume its engagement in major global discussions, as was the objective during the years of active and proud foreign policy between 2003 and 2010. However, much has changed in the last years.
On the domestic scene, we have a Brazil that continues to be the promise of a “country of the future”, which has experienced (and still experiences) political polarization and which has plummeted in comparison with other major world economies from a position of the seventh largest world economy in 2010 to tenth place in 2022.
On the international scene, the COVID-19 pandemic, the reductions and expansions of commodity values in global markets, the dismantling of regional integration projects (such as UNASUR), the rise of US-China rivalry and the invasion of Ukraine by Russia are some of these transformations.
China, Brazil’s main trading partner, has also changed significantly in recent years. The country that occupied seventh place in the ranking of the largest world economies (GDP) in 2003, today occupies second place in the same ranking. Beijing significantly expanded its operations in the world, becoming the largest trading partner of countries in Latin America, Africa and Asia. Domestically, it sought alternatives for its development and internal stability with the consolidation of Xi Jinping in power since 2012.
All these challenges are crucial for Brazil’s international insertion, in general, and for relations with China, specifically. The 2023 scenario is different from 2003 for both countries. Over the years, Sino-Brazilian trade relations have grown significantly and both countries have sought to fill each other’s deficiencies (in terms of resources, capital and technology, for example) and have managed to promote political concertation over the years, as within the BRICS .
Bilateral trade with China reached US$135 billion in 2022, and the country currently plays an important role as a foreign investor in the country’s most diverse industries. According to the China-Latin America Finance Database, Brazil received thirteen loans from Chinese banks, totaling US$30.5 billion. The importance of China is evident in the Brazilian agenda, especially in the horizon of Brazilian foreign policy from 2023 onwards.
After assuming the presidency, Lula received a letter from Xi Jinping, expressing his willingness to expand cooperation between the countries. Signaling a desire for balance, without automatic alignments or taking sides, Lula plans to visit China in the first quarter of 2023, with the interest of expanding cooperation beyond trade.
Brazil, China and the changing world
There are historical and current challenges to the Brazil-China relationship, which makes it even more essential to build a “strategic agenda for the future” that leverages public policies through international partnerships and financing – in line with Brazil’s international commitments – in a way that to position Brazil, with the support of China, at the forefront of major transformations and global decision-making spaces. This is the assessment of Karin Costa Vazquez, Associate Professor and Assistant Dean at OP Jindal Global University in India, Research Fellow at the Center for BRICS Studies at Fudan University in China and Senior Non Resident Fellow at the Center for China and Globalization (CCG).
In the article “A strategic agenda for the future for sustainable development in Brazil”, published by CEBRI magazine in 2022, Vazquez points out three major global transformations that are shaping the future of Brazil-China relations, and suggests recommendations.
The first is the shift in the economic center of gravity from the West to Asia and the growing relevance of China to Brazil. If, on the one hand, the boom in Brazil-China bilateral flows brought a favorable trade balance for Brazil, on the other hand it also generated an asymmetric trade structure. “This asymmetry now invites us to think about strategies to diversify and add value to Brazilian exports to China”, evaluates the researcher.
The second transformation is the digital-technological revolution and the inauguration of a more competitive, sustainable and innovative productive paradigm, which has China as the epicenter, emerging on the technological frontier and highlighting the international dispute with the United States. In the words of Vázquez, this paradigm is born in the midst of structural changes in global value chains that will determine countries’ competitiveness and access to markets, as well as the future of work. “China can be a partner in Brazil’s transition to industry 4.0 and digital agriculture, ensuring that both processes occur in a timely, competitive and sustainable manner.”
The third transformation is the global energy transition and the impact of China’s decarbonization on global energy markets. According to the researcher, China is among the world’s largest importers of crude oil, while Brazil is among the main suppliers of crude oil to China, and is heavily dependent on the country for its exports.
Lula has already highlighted the importance of the environmental agenda in the Brazilian and international agenda with his visit to COP 27 in November 2022, and the reconstruction of the agenda in the country with the reformulation of bodies that will look at the environment. China’s 14th Five Year Plan, for example, places significant emphasis on the climate and environment agenda. Such speeches also echo in international events in which China has been projecting itself as a responsible actor.
“We (Brazil) must be attentive to the possible impacts of a contraction in Chinese demand in the medium term and identify elements that may contribute to Brazil’s repositioning in low-carbon industries”, suggests the researcher.
Far beyond bilateral trade
China is a central actor for Brazil’s global reinsertion, as well as for promoting development. Karin Vazquez defends the hypothesis that more than thinking about strategies to diversify and add value to Brazilian exports to China, Brazil must do so within a process of reindustrialization of the Brazilian economy that benefits from partnerships with countries like China for the transfer of technologies and investments in sectors with positive repercussions for the economy, the environment and society.
“A way of articulating Foreign Direct Investment with technological development and the addition of value in agricultural production chains is the creation of Brazil-China Research, Development and Innovation centers, the inclusion of technology transfer/joint development clauses in agreements bilateral investment agreements and incentives for investments in industries that make the greatest contribution to sustainable development,” points out Vazquez.
Fruit of a past that echoes in the present, Karin points out that Lula and Xi Jinping coincide in the vision of a global order based on a new form of human progress, where poverty cannot exist, prosperity is common and harmony with nature is crucial. More than a strategic ally of China, Lula’s leadership gives both countries the possibility of converting complex international challenges into an opportunity to build bridges between great powers, emerging and developing countries to seek joint solutions, as in the BRICS framework. .
“I believe that there is still an appetite in the five countries to carry out the original BRICS motivation. That is, to offer alternatives to global governance. The challenge lies in the form and priority that will be given to issues such as the expansion of the bloc, dialogue with other political-economic and regional blocs, as well as the formulation of joint responses to some of the most pressing development issues of our time, including a just energy transition, health, poverty eradication and food security”, asserts the researcher.
Working closely with China may allow Brazil to regain a prominent international position as a player in the Global South capable of building consensus within and outside the BRICS. Karin Vazquez believes that the revitalization of IBSA, a forum for dialogue that brings together India, Brazil and South Africa, the Brazilian Presidencies of the G20 and the South African and Brazilian Presidencies of the BRICS, could be the engine of this effort in the next three years.
“Brazil could, for example, explore the creation of a Global Alliance for the Eradication of Hunger and Poverty, drawing on its own experience and that of other BRICS countries in the fight against hunger and extreme poverty, promoting the centrality of Brazil and Latin America for the promotion of food security in China and the world, and highlighting the need to redesign food systems to ensure sustainability and resilience in access to food around the world”, concludes the researcher.
In short, the perspective is to expand the relationship between Brazil and China in the coming years of the Lula government, and should serve as a two-way street, while foreign policy informs and guides domestic public policies, and contributes to Brazil’s positive international insertion. . For this, the formulation of a strategic agenda for the future that guides Brazilian foreign policy in the face of major international transformations is paramount.
Filipe Portoresearcher at the Observatory of Foreign Policy and International Insertion of Brazil, OPEB, at the Federal University of ABC.
Alana CamoçaPhD in International Political Economy (PEPI/UFRJ), postdoctoral fellow at the State University of Rio de Janeiro (UERJ) and researcher at the Laboratory of Studies on the Political Economy of China (LabChina).
* This is an opinion article. The author’s view does not necessarily express the editorial line of the newspaper Brazil in fact.
Editing: Thales Schmidt
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