Foreign Affairs
Partnership China-Brazil and the wasted potentials
There are opportunities for a more dignified relation with Beijing, based on the developing national industry and technology exchange. But Bolsonaro’s diplomacy is vassal to the USA: Problem is not ideological, but blindness.
Written originally in Portuguese, by Diego Pautasso, Outras Palavras, 27/01/2021, 4:42pm
Even though the establishment of relations between Brazil and China dates back to the 19th century, when the Treaty of Friendship, Commerce and Navigation was formalised between the countries in 1881 and the Brazilian consulate in Shanghai opening in 1883, the greatest building of closer relations only solidified towards the last quarter of the 20th century. In fact, after the revolution of 1949, the relations between the nascent People’s Republic of China and Brazil broke, in the shadow of the Cold War. Thus, the Brazilian diplomacy prioritised contacts in Taiwan, establishing an embassy in Taipei in 1952, and the Chinese leaders pursued greater efforts in the relations with communist parties and groupings ideologically aligned with them, in the detriment of central relations with their own national states.
Only in 1974, during the government of Ernesto Geisel (1974–1979), were relations with China re-established. On the Brazilian side, the universalist foreign policy, of extreme perspicacity in the protection of national interests, conducted by Azeredo da Silveira and emphasising the motto of “Pragmatism Ecumenical and Responsible.” Not only did it renew ties with Beijing, as it also recognised the government of The People’s Movement for the Liberation of Angola (MPLA) and moved commercially closer with the Union of Soviet Socialist Republics (USSR) and countries from Eastern Europe.
On the Chinese side, the reform and opening policies aimed to overcome isolation, making a tactical manoeuvre to get closer with the United States of America: the so-called “Ping-Pong Diplomacy”. In this perspective, the self-declared anti-communist Geisel re-established relations with China in favour of shared agendas, such as the defence of territorial waters extension to 200 miles, non-interference in internal issues of nations, cooperation among Third World countries and to the opposition of protectionism in developed economies.
The rapprochement solidified, with events such as the presidential visits of Joao Baptista de Oliveira Figueiredo and Jose Sarney to China, in 1984 and 1988 respectively. Moreover, the 1990s were marked by a greater economic synergy between the two nations, forward with a perspective of economic opening in Brazil and the process of acceleration in the Chinese development. In this context, the first minister Zhu Rongji coined the expression “strategic partnership” to define the relations of China with Brazil in 1993, the first international Chinese partnership with this motto.
After China entered the World Trade Organization (WTO) in 2002, commercial and economic ties with Brazil increased, and in 2009, China became Brazil’s major commercial partner. Far from trivial, this fact says a lot about Brazil and its own current transformations in the body of the global order: finally, it has broken the enduring status of American predominance as a main Brazilian trade partner, which persisted since 1929. And evidently, it should serve as a reference to illuminate the decisions of Brazil, not only about bilateral relationships, but also about the opportunities and global challenges of the 21st century.
Accordingly, looking at the bilateral commercial activities: In 1974, the year of the resumption of diplomatic relations. In two decades, Sino–Brazilian commercial flow went from 19.4 million to 1.2 billion in 1994, reaching 36.1 billion in 2009 and increasing to US$ 62.357 billion in 2019.
In the context of the coronavirus pandemic, between January and June 2020, China was the destination of 33.8% of all Brazilian exports (up from 28.5% in the same period in 2019), to a total of US$ 34.3 billion, while the imports corresponded to 12% (US$ 16.6 billion), resulting in a surplus of US$ 17.6 billion. By comparison, the USA — the second main destination of Brazilian exports for the period — absorbed only 8.5% of exports.
In the field of scientific and technological cooperation, the agreement of cooperation in science and technology for the implementation of China–Brazil Earth Resources Satellite (CBERS) was signed in 1988, which since then led to the launching of six satellites (1999, 2003, 2007, 2013 and 2018). Another synergetic cooperation has been between the Brazilian Agricultural Research Corporation (EMBRAPA) [Empresa Brasileira de Pesquisa Agropecuária] and the Chinese Academy of Agriculture Sciences (CAAS) [Academia Chinesa de Ciência da Agricultura].
Within the diplomatic scope, the creation of the China-Brazil Commission of High Level of Coordination and Cooperation (COSBAN) [Comissão Sino-Brasileira de Alto Nível de Concertação e Cooperação] and the Brazil–China Enterprise Coalition (CEBC) [Conselho Empresarial Brasil–China] stand out, as do the signature of Joint Action Plans (PAC) [Planos de Ação Conjunta] in 2004, the latter for the periods of 2010–2014 and 2015–2021, the rise of the Strategic Partnership entailed in 1993 to Global Strategic Partnership in 2012, and the institution of Decennium Plan of Cooperation [Plano Decenal da Cooperação] (2012–2021).
Furthermore, in the course of the first decade of the 21st century, Brazil fostered joint action with China in the revision process of quotas to the International Monetary Fund (IMF), in the commercial and financial institutionalisation of the G20, the establishment of the BASIC and the creation of the BRIC (posteriorly BRICS). In fact, the latter has as its main branches the creation of the New Development Bank (NDB) [Novo Banco de Desenvolvimento (NBD)] and the Contigent Reserve Agreement (CRA) [Arranjo Contigente de Reservas (ACR)], formalised at Fortaleza Summit in 2014.
Foreign direct investment (FDI) from China into Brazil has also strengthened, especially since 2010. Currently, the Chinese FDI stock in Brazil is around US$ 80 billion, clearly oriented toward productive activities and with a trend to assume more and more convergence in the Brazilian demand for robustness in the country’s infrastructure.
A reflection and information: in the list of the Fortune 500 largest (2019), there are 119 Chinese companies, and of its 25 largest, no less than 24 are public/state-owned, highlighting diplomatic and corporative interests intertwine of the Asiatic country. Therefore, it is appropriate to observe that neither; if one side China hasn’t employed force to manage its interests, nor it is appropriate to forge Brazil’s national interests in the bilateral relation. In other words, it’s Brazil’s responsibility to conduct Chinese interests and to insert them in the neighbouring Latin America on projects of the Belt and Road Initiative (BRI) [Nova Rota da Seda] to support its objectives in the region. It then deals, as an opportunity for Brazil to impulse initiatives of regional integration and to overcome bottlenecks in the infrastructure sector, which for more than 40 years have had less than 2% of the GDP in investments, and these days sees itself even more fragile by the dismantle, in parts, of the largest national building contractors due to the “works” of the Operation Car Wash.
The China–Brazil relationship continues to develop, despite Brazil entering a continuous cycle of political and institutional instability since the demonstrations of June 2013, passing over the overthrew of Dilma Rousseff, the interregnum of Michel Temer’s government to the ascension of Jair Bolsonaro. Since then, flagrant uncertainties in relations to Brazil’s direction on international activity have emerged, especially around the erratic leadership of Brazilian diplomacy by the Chancellor Ernesto Araujo, responsible for causing a rupture in the traditional conduct of the Ministry of Foreign Affairs.
It’s worth remembering that, the father of Brazil’s diplomacy, Baron of Rio Branco, during his tenure at the Itamaraty encountered a situation where the USA was gradually occupying a central role, that in former times belonged to Great Britain. Self-confessed conservative and son of the monarchist Viscount of Rio Branco, the Baron didn’t establish the so-called alliance non-written with the Americans out of admiration for their ideology or government systems, but instead consciousness on the relationship importance in guaranteeing the stability and the development of Brazil at that moment in history. In the same way, Getulio Vargas didn’t avoid, in the middle of the Second World War, establishing the equidistance pragmatism between the Nazi Germany and the USA to guarantee the best conditions of re-equipping the Armed Forces and the installation of an advanced steel plant in Brazil, that turned out to be the one located in Volta Redonda.
In contrast, the current leadership of the Brazilian diplomacy is persistently equivocal, even in relations with its main commercial partner, China. During his electoral campaign, Bolsonaro made countless references to China as a country that would be “buying Brazil”. In fact, he visited Taiwan in 2016 when he was a federal deputy, violating the One China principle. Former Education Minister Abraham Weintraub came out affirming that China had hidden information about the coronavirus from the rest of the world in order to profit with sales of medical equipment, and Chancellor Ernesto Araujo named the coronavirus as the “commievirus”. In the same vein, right-wing militants have held political demonstrations in which they reported a supposed Chinese intervention in the country’s domestic affairs, although there isn’t any evidence about this.
Moreover, the foreign policy of Araujo opts for a subservient alignment to Washington without any palpable return, while removing itself from important integration initiatives and regional dialogues with the UNASUL (Union of South American Nations) and the CELAC (Community of Latin American and Caribbean States), engendering unnecessary conflicts with important commercial and strategic partners, such as the Arab world, Europe and South America.
Despite the mismanagement of Brazil’s diplomacy, the complexity and the relevance of bilateral relations with China hinder sudden alterations in its management. In the end, important ministers, pressure groups (agribusiness, industries, etc.) and opinion formers (intellectuals, media segments, social organisations) know the importance of China to Brazil and for its acceptance within a new global order. For this reason, in spite of frictions, the government tried to soothe relation with China, as shown in the Vice President Hamilton Mourao’s leadership — together with the China-Brazil Commission of High Level of Coordination and Cooperation — when he said that he would not oppose the partnership with Huawei to implement 5G in Brazil. Furthermore, China conducts its diplomacy with pragmatism, not allowing temporary and sectorial issues to interfere in what is crucial to bilateral relations in strategic partnerships.
Based on the information and past history of the relations between China and Brazil, it is appropriate to offer some considerations about the opportunities and challenges. First, the agenda of Brazil’s exports to China is in fact represented in majority by primary products, of which in 2018 about 82% were soya (42.5%), crude oil (22.3%) and iron ore (17%). However, one ought to consider: 1) Brazil’s primary sector has a considerable effect link with industry and innovation, and 2) the insourcing of exports and on deindustrialisation processes or national competitive loss has profounder roots, stretching back to the middle of 1980s: in the interim, industry contribution to GDP fell from 27% to about 10%. Second, in 2019 China represented 80% of our surplus and in the course of the preceding decade as the country’s main commercial partner, it provided a balance of 109.5 billion dollars. Without such figures, the balance of exports and imports of manufactured goods would suffer with a strong narrowing in the trade balance.
The real question is, therefore, another one: how can we forge an international engagement capable of promoting both sovereignty and national development through state policies and not just one of transitional governments? In other words, the gains in relations with China, which are already considerable, are only inclined to be enhanced in accordance with the national developmental strategy adopted. To rephrase: with a coherent policy on ICT (industrial, commercial and technological), we can capitalise on the science and technology cooperation to attract productive investments and to implement infrastructure works, as well as to connect them to multilateral political articulations. In the present circumstances, it’s wise to extract the best of the competition between the USA and China, either by disputes over 5G or in the process of stretching the New Silk Road, such as had been done by Rio Branco and Getulio in former times, opting for either alignment or equidistance, depending on our objective gains, and not on ideological issues.
The current moment, however, is one of confusion, as part of the ruling elite continues with its heart in Miami, even if the pockets are more and more dependent on Shanghai, blurring Brazil’s international engagement and obstructing necessary progress for long-range achievements of the national interest.
