When Luiz Inácio Lula da Silva (PT) lands in the Chinese capital in the coming days, he may try to repeat an old formula, but its outcome is uncertain. With a history of neutrality in international relations and negotiating even with enemies, Brazil returns to the international arena, after the isolation of the government of Jair Bolsonaro (PL), with a difficult task: to balance itself in the face of growing tension between China and the United States. United.
The world’s two largest economies exchange sanctions and accusations of espionage at a rapid pace. Beijing’s non-alignment with the position of the United States and the North Atlantic Treaty Organization (NATO) in the face of the war in Ukraine further deepens the differences.
Lula will be in China from the 26th to the 31st of March and will be accompanied by a delegation that includes the president of the Chamber of Deputies, Arthur Lira (PP-AL), of the Senate, Rodrigo Pacheco (PSD-MG), and ministers of five folders: Agriculture, Science and Technology, Finance, Health and Foreign Affairs. A delegation of more than 240 businessmen is also planned.
The president of Brazil will visit the capital Beijing and Shanghai. According to sources heard by Brasil de Fato and who are directly involved in the reception of the Brazilian delegation in China, Dilma Rousseff (PT) should be sworn in as president of the New Development Bank (NBD), better known as Brics, on the 30th. Chinese territory, the Brazilian government expects to sign around 20 agreements in the areas of agriculture, science and technology, environment, economy, trade and investment.
Source: Ministry of Development, Industry, Commerce and Services / Brasil de Fato
The first trip to a non-Western country in Lula’s new term takes place after the president visited Argentina, Uruguay and the United States itself, where he only had one day on his agenda. The interaction unfolded in a promise of US investment for the Amazon Fund – without effective developments – and the recent visit of the US Trade Representative, Katherine Tai, to Brasilia.
For Ana Tereza Marra, professor at the Federal University of ABC (UFABC) and Coordinator of the China Group of the Brazilian Foreign Policy Observatory (OPEB), the results in the bilateral relationship with the US are still timid, but there is a “political rapprochement” ongoing with the White House. As for China, the visit promises because the Chinese can offer more, he assesses.
“The US wants to invest in the climate, but it depends on Congress approving the resources and then it may invest or not invest. They made that Chips Law, which is this thing of them trying to change the global supply chains of semiconductors and bring the production for the US and US allied countries, they have money to invest in other countries, but at the same time that exists, they wave to Brazil, even if they don’t have anything concrete”, says the UFABC professor to Brasil de Fato . “China, by its very nature and its relations with Brazil in recent years, manages to make things concrete more quickly.”
Regarding the ability of the Itamaraty and Brazil to manage to maintain their historic position of neutrality and negotiation in the midst of an increasingly intense and fragmented global scenario, Marra believes that it is still not possible to know the limits and possibilities of this posture.
Source: Ministry of Development, Industry, Commerce and Services / Brasil de Fato
But the researcher points out that the White House today puts more energy into the relationship with Europe and President Joe Biden does not exert the same level of pressure as his predecessor, Donald Trump – who made an active campaign to stop the expansion of Chinese companies in the market. of 5G in Latin America. Meanwhile, believes the UFABC researcher, the US fails to make offers, or threats, to enlist Latin American countries in its anti-China alliance.
“What China is looking for is pragmatism more than alignment, the US is looking for Brazil’s alignment, China wants Brazil to be pragmatic and embrace opportunities. today it is not a requirement at all costs”, says the UFABC professor.
trip priorities
Lula’s trip could result in agreements that boost the reindustrialization of the Brazilian economy, one of the goals declared by the government. In this sense, two initiatives may gain prominence: the purchase by a Chinese company of a vehicle factory abandoned by Ford in Camaçari, Bahia, and possible partnerships in the area of semiconductors.
The expectation is that the Chinese company BYD, leader in the sale of hybrid and electric cars in the world (1.85 million units in 2022), will buy the factory abandoned by the US company in 2021. China holds the largest market for this product in the world. world, in addition to dominating the chain of critical minerals essential for the energy transition.
Assembly line of a BYD electric truck in Huaian, China / AFP
The governor of Bahia, Jerônimo Gonçalves (PT), will accompany Lula to China and told the newspaper Correio that talks with BYD are “in the final stages” and are “almost ending”.
In the semiconductor sector, Brazil is also looking for space. The chips that power cell phones, computers and video games are increasingly essential to the global economy. They are now also needed for cars, appliances and other items. The scarcity of this vital input for the technology industry has closed factories around the world and its military use causes China, the United States and the European Union to invest hundreds of billions of dollars in the sector.
The figures for this industry segment are superlative. The USA promises more than US$ 100 billion in subsidies and tax exemption to encourage the production of semiconductors through its Chips Law – approved last year, the project determines the investment of billions of dollars in the sector, with clauses that limit the trade with China. The European Union, on the other hand, talks about mobilizing US$ 48 billion to increase its participation in this market.
Faced with this scenario, the Chinese seek to guarantee their technological autonomy. In an interview with the British newspaper Financial Times, a source with access to the Chinese government said that Beijing will subsidize the sector “without any budget restriction” to “overcome US restrictions”.
Biden at the construction site of an Intel semiconductor factory in Ohio / Saul Loeb / AFP
Making deals with Beijing and Washington may not be the way to go, as the United States acts to isolate China. Its semiconductor investment program prevents companies that receive state funds from expanding their activities in China for 10 years, in addition to pressure from the White House that caused a vital company in the sector located in the Netherlands to stop exporting its products to the Chinese.
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Although Brazil is far from being able to mobilize the necessary resources to compete for leadership in the semiconductor sector, the country may have an asset: the National Center for Advanced Electronic Technology (Ceitec). According to a representative of the Brazilian state-owned company, Ceitec is “the only company in Latin America that has a functional clean room infrastructure and a line of industrial equipment for the production of semiconductors”.
The Minister of Science, Technology and Innovation, Luciana Santos, accompanies Lula in China and has already stated in interviews that recovering Ceitec, which Bolsonaro tried to privatize and close, is one of the priorities, which signals possible agreements and negotiations.
How not to be a “sacrifice zone”
In 2022, Brazil sold US$31.78 billion worth of soybeans to China, in addition to tens of billions of dollars worth of iron and oil. The Chinese manage to export to Brazil products with greater technological refinement, such as solar panels and telephone equipment.
The soybean production chain in Brazil is linked to large estates, transgenics and the intensive use of pesticides, so that an increase in the Chinese appetite for the product could mean the growth of environmental and human rights violations in Brazil.
To prevent the country from becoming a kind of “sacrifice zone” for Chinese economic growth and the enrichment of Brazilian landowners, researcher Ana Tereza Marra argues that some public policies can be adopted.
Soybean harvest in Brazil / Silvio Avila/ AFP
“One way of trying to improve the quality of economic relations is to attract Chinese investments to Brazil that are directed to sectors of strategic interest to the government. The government has to be clear about what these sectors are and what projects it wants to propose for China to finance”, says the teacher to Brazil in fact. “That is the target of the Lula government, they are investments that will help the reindustrialization of the country”.
The UFABC researcher points out that the Chinese government made the strategic decision not to plant soybeans because of the environmental effects of cultivation, such as high water consumption. The authorities’ plan was, then, to import the product — and Brazil is the main supplier of soy consumed in China.
To mitigate a trade agenda that should not be profoundly altered in the short term, the UFABC professor defends that Brazil negotiates with China about investments in environmental and conservation projects, a “compensatory mechanism”.
“For that, we have to be clear which are these strategic sectors and we have to have projects to propose in these sectors. This is an important aspect, it is obvious that China will not arrive here with the projects ready and will do what is Brazil’s decision to do”, he evaluates.
Editing: Patricia de Matos
