Testing the limits of China and Brazil’s partnership

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Harold Trinkunas

Harold Trinkunas explores the relationship between Brazil and China, which is largely grounded in trade and investment. Brazil trades nearly twice as much with China as with the United States, a gap that has been widening as a result of trade diversion resulting from the U.S.-China trade war. Brazil and China also have shared common interests in the BRICS (Brazil, Russia, India, China, and South Africa) grouping of emerging powers. Since taking office in January 2019, however, Brazilian President Jair Bolsonaro has challenged the historical trends in the Brazil-China relationship by taking a critical stance on China and adopting a highly pro-U.S. position. Bolsonaro’s foreign policy positions vis-à-vis China have largely mimicked those of the Donald Trump administration. Now, as both Bolsonaro and Trump face wide criticism of their handling of the COVID-19 pandemic, Trinkunas warns that such close U.S.-Brazil relations are unlikely to persist beyond these two like-minded presidents. Brazil-China relations, on the other hand, are likely to grow closer once again on the basis of commercial interests.

Learn more about Global ChinaBrazil is China’s most important economic and political partner in South America, as well as a key participant in the Brazil, Russia, India, China, and South Africa (BRICS) grouping of emerging powers that China increasingly leads. When it comes to global aspirations, China and Brazil have historically been in sync on their critiques of the liberal international order, if not on their preferred remedies. Historically, their prescriptions for foreign policy differ in important ways. China would prefer a world order that better accommodates its interests, and it is becoming less reluctant to use the threat of force in foreign policy to maintain its ascendancy in its geopolitical neighborhood. Brazil traditionally has preferred a rules-bound liberal international order that applies to everyone, especially superpowers. Unlike China, it foreswears the use of coercion in international affairs, even to protect its interests in its immediate neighborhood, South America.

Since President Jair Bolsonaro assumed office in January 2019, this historical pattern has been upended. Bolsonaro and his foreign policy team have adopted a strongly pro-U.S. (specifically pro-President Donald Trump) agenda internationally, including engaging in frequent critiques of China. Domestically, the partnership with China has been controversial with some sectors. Specifically, the partnership is criticized by the Brazilian manufacturing sector, which faces strong competition from Chinese products and lacks reciprocal access to Chinese market, and by nationalist-populist voters who support Bolsonaro. Agricultural export interests, by contrast, favor a strong relationship with Beijing because China is a major market for their products.

While initially restrained in response to criticism from the Bolsonaro administration, Chinese diplomats have struck back in 2020 in interviews and op-eds with local media.[1] This confrontational dynamic is a marked departure from the historical trend in Brazil-China relations, which has trended toward deeper economic and political relations. China has a long-term interest in a close diplomatic relationship with Brazil, important both for its strategy in Latin America and maximizing its global leadership. Beijing is unlikely to want this tension to become the “new normal” in its relations with Brazil. In the face of the COVID-19 pandemic, the Bolsonaro administration has steered an erratic course between conciliatory rhetoric, seeking Chinese assistance against the novel coronavirus, and further criticism.[2] Despite the preferences of its current foreign policy team, Brazil has important long-term strategic interests in maintaining a working partnership with China.

EVOLUTION OF THE CHINA-BRAZIL “STRATEGIC PARTNERSHIP”
Brazil’s path toward emerging power status has been a rocky one, as it has tried different strategies to secure a seat at the table to negotiate a place in the international order commensurate with its aspirations. It has vacillated between collaborating with the United States, as occurred during World War II and during the 1990s after the end of the Cold War, and charting its own autonomous path to great power status during the Cold War and during first decades of the 21st century. Each time, Brazil’s aspirations have been undermined by profound crises in its domestic political and economic arrangements that have belied its claim to great power status.[3]

During the periods when it sought international autonomy, Brazil has found in China an attractive partner in criticizing the liberal international order fostered by the United States in the wake of World War II.

During the periods when it sought international autonomy, Brazil has found in China an attractive partner in criticizing the liberal international order fostered by the United States in the wake of World War II. Brazil’s military government established diplomatic relations with the People’s Republic of China in 1974, ending its recognition of the Republic of China (Taiwan), and China and Brazil entered a “strategic bilateral partnership” in 1993, initially focused on economic and technological cooperation, but eventually evolving into a more global partnership.[4] Both prioritized relationships with the Global South based on solidarity, non-intervention, and mutual respect, deliberately contrasting their approach with that of the superpowers. In particular, they criticized the degree to which the United States ignored the rules of the rules-based liberal order it purportedly championed. What bound the two countries together was a critique of the international system as stacked against the developing world. Both China and Brazil have sought rapid economic and technological development (although China has had much greater success) and have pursued industrialization as an important means to international autonomy and a seat at the table of the world’s major powers.[5]

One of the signature institutions via which China-Brazil international cooperation has become more formalized is the BRICS partnership. BRICS brings together Brazil, Russia, India, China and South Africa to address global concerns of mutual interest. A club of “emerging powers” (although Russia is arguably declining), BRICS has served as a venue for mutual admiration, for club deals among the members, and sometimes for proposing an alternative world order. Particularly when seeking reforms in the liberal international order, the BRICS countries have proposed alternatives to existing institutions such as the BRICS Development Bank (an alternative for the World Bank) and the Contingency Reserve Arrangement (an alternative for the International Monetary Fund).[6] Both China and Brazil have found BRICS a useful mechanism to signal to the incumbent great powers that rising states have both the capacity and the interest in establishing their own global institutions, even though these are yet nascent and may not prosper.

ECONOMIC FOUNDATIONS OF THE BRAZIL-CHINA RELATIONSHIP
China and Brazil’s relationship is grounded on an expansive trade and investment relationship. China began to trade abroad with South America in significant terms after 2000, initially focused mostly on acquiring commodities to supply its rapidly growing industrial base and feed its population.[7] Brazil is one of the most productive agricultural export economies in the world, rivaling the United States in this area, as well as a significant exporter of mineral products. By 2019, bilateral trade reached over $100 billion, making China the main destination for Brazilian exports.[8] The China-U.S. trade rivalry under the Trump administration benefited Brazil as China shifted its food trade away from the United States, and Brazil’s highly competitive agricultural exporters were eager to take up the slack.[9] After 2005, when China began to invest abroad, Brazil also became a significant destination for its foreign direct investment, first in the commodities sector, but then in a wider array of infrastructure projects. By 2017, over half of China’s investments in South America were destined to Brazil.[10] Although not formally a target for China’s signature Belt and Road Initiative, Brazil’s global interests and export markets are clearly affected by China’s overseas investment programs, not least of which because it tends to shift the global economic center of gravity away from the United States, one of Brazil’s other major international trading partners.[11]