China-Brazil ties set to open new chapter

It is in the interest of both countries to support bilateral economic development

With the swearing-in of Luiz Inacio Lula da Silva for the third time as the president of Brazil on Jan 1, it is expected that the country’s relationship with China will improve. President Xi Jinping sent a congratulatory message to Lula da Silva on his inauguration as Brazil’s president.

In fact, overall bilateral ties should be more smooth while economic relations between the two sides have grown.

China has been the main destination for Brazilian exports since 2009 and an important source of imports, while Chinese investment in Brazil plays an important role, even if at a lower level than before, in boosting the country’s economy. Yet there have been a number of episodes related to sensitive issues such as politicization of the origin of the novel coronavirus and the ill-treatment of Chinese telecom firms, leading to undiplomatic remarks by some officials.

However, that does not mean the China-Brazil High-Level Commission for Consultation Cooperation (COSBAN) has not been effective in strengthening bilateral relations and eliminating potential conflicts. In fact, the COSBAN’s strategic plan sets the road map for bilateral initiatives up to 2031.

Now that Lula has been sworn in as Brazil’s president, the new government is expected to adopt a different approach to foreign policy, including relations with China, as it is likely to be based on Lula’s earlier policy of open dialogue on bilateral and global issues based on equality.

Domestic as well as global situations have changed quite significantly since Lula first became Brazil’s president. But it is likely that the voices supporting bilateral economic development remain high, because it is in the interest of both countries. The other issue of common interest is fighting climate change.

China’s 14th Five-Year Plan (2021-25) lays emphasis on pursuing “higher-quality development” instead of quantitative growth, as well as increasing imports of goods and services. In the report he delivered to the 20th National Congress of the Communist Party of China, President Xi said China was committed to ensuring “the security of food, energy and resources as well as key industrial and supply chains”, which means the emergence of a new consumption pattern that would create business opportunities for middleincome economies such as Brazil.

At the same time, the commitment to the UN’s 2030 Agenda for Sustainable Development will prompt Brazil to make its production method and domestic consumption patterns more sustainable and eco-friendly. And both China and Brazil know that huge investments are required to develop new, low-carbon technologies in order to achieve the Paris Agreement targets.

Brazil seems well positioned to reduce carbon emissions and capitalize on the opportunities ahead. As a big, competitive exporter of food products and clean energy, it can provide a good deal of the required green goods and services.

On the other hand, China has adopted a proactive policy on financing “green activities” in developing economies as a way of contributing to the 2030 Agenda. This is one of the potential new areas that can foster bilateral ties, with the aid of Chinese investment in industries and services and initiatives to reverse deforestation in some places.

The possible areas where Chinese enterprises can invest in Brazil include low-carbon agriculture, biotechnology, renewable energy, smart cities and the digital economy.

It is widely believed the Brazilian economy has comparative advantages because of its rich reserves of natural resources and hence it should play a more active role in sustainable global development and international relations.

Improving China-Brazil relations has become even more important in view of the protectionist measures likely to be adopted by the main players in international trade, disguised as environment-based barriers. This, in itself, might create new opportunities for bilateral trade.

Another area in which Chinese investors can invest is Brazil’s health sector, including the medical equipment manufacturing industries. The COVID-19 pandemic has made it all the more important for Chinese investors to invest in Brazil’s health sector, because it will make healthcare, medicines and medical equipment more easily accessible to the Brazilian people and hospitals.

That economic relations between Brazil and China will improve is quite clear and predictable. But Brazil will adhere to its traditional diplomatic policy of maintaining a good relationship with all partner countries.