Brazil's President Lula on quest to repair Brazil-China relations

After the defeat of Jair Bolsonaro in the second-round presidential run-off in October last year, Chinese President Xi Jinping expressed willingness to work alongside Luiz Inácio Lula da Silva to further “the comprehensive strategic partnership between China and Brazil, for the benefit of the two countries and its peoples”.

As Lula returned to the presidency in January, China sent a delegation of prominent officials, including Vice President Wang Qishan to his inauguration - with Lula receiving a letter from Xi describing how “the China-Brazil relationship has become a model of relations between major developing countries with rich connotations and broad prospects”.

Lula is all set to embark on an official visit to China on March 26 as he pushes to strengthen ties with international partners during his third mandate. He is expected to meet Xi, Prime Minister Li Qiang and President of the National People’s Congress Zhao Leji.

Lula was originally scheduled to leave for Beijing on Friday, but the trip has been moved to a later date after he contracted pneumonia. The newspaper O Globo reported that his departure is pending a health assessment

According to Karin Costa Vazquez, a researcher at Fudan University in Shanghai, “The visit is an opportunity for the two countries to renew bilateral ties and project positive leadership in the world.”

“For Brazil, the visit takes place within the first 100 days of President Lula’s administration and marks the importance of China as a strategic partner. For China, the visit takes place immediately after the Two Sessions, signalling Brazil’s relevance in the making of Xi’s new era,” she tells TRT World.

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Bilateral discussions are set to focus on trade, investment, re-industrialisation, energy transition, climate crisis and global security in the capital, Beijing.

At least 20 trade deals are expected to be signed while Lula is also set to visit the New Development Bank – formerly the BRICS Development Bank – in Shanghai.

Over 200 business people and 90 representatives from Brazil’s agriculture sector are set to join Lula’s Brazil delegation on his fourth trip to the Asian giant.

Despite bilateral trade reaching a record $150.5 billion last year, Virginia Busilli, a researcher and professor at the Catholic University of Cordoba says Lula’s visit follows a recent period of “unprecedented tension” in Sino-Brazilian bilateral relations.

During Bolsonaro’s tenure, some analysts accused his administration of Sinophobic rhetoric towards Beijing, notably with China demanding explanations regarding an allegedly “highly racist” tweet.

“In this sense, Lula will seek to relaunch the political harmony achieved through bilateral ties at the beginning of the century, in an attempt to repair the damage in diplomatic matters experienced during the presidency of Jair Bolsonaro (2019-2022),” Busilli argues.

Between 2003-2010, during Lula’s first two mandates, Latin America experienced a commodities boom, as both nations forged strong commercial and diplomatic relations. Brazil exported soybeans, iron ore and crude oil and in turn has received the largest Chinese loans in the region, around $66 billion and equating to 47 percent of China’s investment in the region.

According to Busilli, one of Lula’s foreign policy objectives was to increase Brazil’s global influence and to change international trade.

According to Vazquez, “Lula’s quest for autonomy further leveraged Brazil-China relations in 2009 until it reached an all-time high towards the end of his second term. In 2009, China became Brazil’s largest trade partner and in 2012 China became the main destination for Brazil’s exports in the world.”

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The Sino-Brazilian Strategic partnership established in 1993 morphed into a Global Strategic Partnership in 2012 amid what Busilli says was “an expanding bilateral relationship and growing mutual trust” during former president Dilma Rousseff’s tenure.

Lula, one of the founders of BRICS — an economic grouping that includes Brazil, Russia, India, China, and South Africa – pushed for "economic autonomy" among developing nations and independence from the US dollar.

Lula said the aim of BRICS was “to create something strong, capable of helping the development of the poorest parts of the world”.

This time around, BRICS’ financial arm, the New Development Bank (NBD) will have ex-president Rousseff as director, replacing Bolsonaro’s Marcos Troyjo.

Some analysts forecast Lula could use it for development projects in the country, following the Asia Infrastructure Investment Bank (AIIB) which approved the first project in Brazil last year. 

Over time, both nations have solidified ties through the Sino-Brazilian High Level Commission for Coordination and Cooperation (COSBAN) - the main mechanism for regular dialogue between Brazil and China with11 subcommittees, a joint Action Plan and a 10-year cooperation plan.

As Lula pushes to re-establish Brazil’s standing internationally, he has already travelled to Argentina and the US. Busilli suggests Lula is likely to maintain his traditional “pragmatism” in foreign policy, “betting on good relations with the US while approaching and relaunching his ties with Beijing.”

However, she argues that Lula’s bid to strengthen economic and political cooperation takes place in a different context to 2003 amid the US-China geopolitical tension and the challenges posed by the Russia-Ukraine War.

While Lula has received criticism for not sending arms to Ukraine, some reports suggest Lula is safeguarding Brazil’s interests through a strategy of non-alignment while promoting a peaceful dialogue amid an increasingly multipolar world.

Busilli suggests it is “feasible” that Lula and Xi discuss Brazil’s proposal “to participate in an eventual multinational dialogue process to end the war between Moscow and Kiev” and the push for a China-Mercosur Free-Trade Agreement (FTA), something Lula has called “possible”.

However, José Augusto Guilhon, Professor of Political Science and International Relations at the University of São Paulo argues that Lula's trip takes place amid a period of “serious domestic obstacles” from the Amazon to the “polarised political climate,” noting similarities to Lula's previous tenure when he argues Brazil's leader shifted “from domestic politics to building an international profile.”

“Brazil desperately depends on rebuilding international expectations regarding Lula’s promises of stopping deforestation, especially in the Amazon. After 100 days in charge, deforestation more than doubled in the country. China is not the ideal choice to tour in order to restore international trust,” Guilhon tells TRT World.

But, with regional neighbours such as Argentina already signed up to the Belt and Road initiative last year, Busilli says Brazil does not need to join to receive Chinese capital as large-scale infrastructure investment projects have already been carried out in the country. She suggests Brazil’s potential entry into the BRI would be “a rather symbolic gesture with a geopolitical overtone, at a time when the initiative is losing momentum.”

However, China’s footprint is across 23 of 27 Brazilian states with cooperation and investments in mining, agriculture, industry, telecommunications, finance and medicine. 

Last year, Vazquez says, “more than 20 percent of Brazilian imports came from China and concentrated on goods of medium and high technological complexity” while “China was the destination of approximately 30 percent of national exports, with agricultural commodities concentrating more than 70 percent of Brazil's sales to the Asian giant.”

She argues this points to an opportunity to consider “new paths for international trade and the need to diversify and add value to Brazil’s exports to China.” 

Busilli says China is “stronger economically and geopolitically than Brazil. The asymmetry in the bilateral relationship is much greater than at the beginning of the 21st century, and favourable to Beijing.”

“Lula will have to negotiate a greater diversification of his export pattern and greater investments in an already mature economic relationship, providing greater warmth and political harmony in the ties, in line with a relaunch of Brazil on the international scene,” she adds.

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