- Lula will work to increase trade and investment with China and use multilateral fora like BRICS to uphold neutrality in the age of strategic rivalry.
- Lula’s suggestion that Brazil and other developing nations mediate for peace is a crucial component of his outreach in China.
- By advocating that Ukraine abandon Crimea in order to achieve peace, he angered Ukriane and many in the West.
- The effect of Brazil assuming the role of a middleman between the United States and China will be for the entire world to see as it gets ready to host the G-20 conference in 2024.
Luiz Inácio Lula da Silva, the president of Brazil, travelled to China last week to fortify ties with that country, which is its largest trading partner. Lula further aimed to garner support for his improbable efforts to bring about peace in Ukraine. As President Lula is back with another Presidential tenure he wants BRICS countries like India, China, and other non-BRIC countries to assist in mediating to end the war. However, his suggestions of equally respecting Russian sovereignty have infuriated Ukraine and some in the West.
The Brazilian and Chinese economies’ shared interest in trade, which improved under Lula’s predecessor, is less contentious. According to the Brazilian government, 20 bilateral agreements were signed between President Lula and President Xi Jinping during his visit.
“I want the Chinese to realise that while their investment will be greatly welcomed here, they shouldn’t refrain from purchasing our enterprises. To construct brand-new things, which we need,” Lula said to journalists on April 6 in Brasilia.Brazilian public works initiatives include a metro line in Sao Paulo, the nation’s commercial hub, which involves Chinese corporations. The sixth satellite to be developed as part of a binational programme, a satellite that would monitor biomes like the Amazon rainforest, is one of the agreements Lula signed in China.
Members of the BRICS group of developing nations, China and Brazil have pushed for changes to the system of handling international political issues that they claim is dominated by the United States. Lula’s suggestion that Brazil and other developing nations, including China, mediate peace is a crucial component of his outreach abroad and includes Russia which is a member of the BRICS. By advocating that Ukraine abandon Crimea in order to achieve peace during a meeting with media in Brasilia last week, he angered Ukriane and many in the West. It may be recalled that Xi and Putin met last month, where they let the American and European leaders know that not everyone was against Russia’s war in Ukraine.
Why is Lula pampering China?
Lula’s goals for Brazil’s relationship with China has changed from the stance he held during his previous presidency from 2003 to 2010. China did not benefit from his previous set of measures. With Brazil’s expansion in the international commodities trade, China’s transition away from formal bilateral loans and towards participation in multilateral forums, and rising hostility between Washington and Beijing, the relationship between the two countries now is very different from what it was during Lula’s first term. Lula ought to keep a sober perspective on China’s more constricted financial resources, interact with China in multilateral fora, and make the most of Brazil’s trade advantages if he wants to safeguard Brazilian interests.
During his first term in office, Lula thought China would cooperate with him diplomatically to realise his goal of giving the countries of the Global South a stronger voice. He regarded China and Brazil, two nations outside of institutions dominated by the West, as being on par. He said that China and Brazil shared a goal of South-South cooperation to “construct a new world geography.” The rising economies of Brazil, Russia, India, China, and South Africa joined forces in 2006 to form the organisation currently known as BRICS as an alternative to alliances dominated by industrialised Western nations. Lula had a key role in this development. Trade between Brazil and China increased from practically nothing to approximately $60 billion by the end of Lula’s first term as president.
Since Lula’s departure ten years ago, these economic ties have developed from promising to crucial. Brazil eventually accounted for 47% of China’s FDI in Latin America, amounting to more than $66 billion since 2010. Brazil has benefited from a proliferation of Chinese development financing, which was boosted during the height of the Belt and Road Initiative (BRI): from 2010 to 2021, Brazil got $22.47 billion from the China Development Bank and China Export-Import Bank. Economic integration persisted despite political upheaval, in large part because of the commodities boom in the late 2000s and early 2010s.
However, as China was interested in their raw commodities during this time, economic links between various Latin American countries and China flourished quickly. Brazil was in the lead as a significant exporter of iron, soybeans, and petroleum.However, since that time, China’s objectives and role in the world have radically changed, making the burgeoning trade and investment connections that were established during Lula’s first term look like a honeymoon phase. Beijing became increasingly hesitant to lend as borrowers like Venezuela and Ecuador struggled to repay their loans, shattering hopes that China could be an alternative funder for Latin American development. Chinese loans to Brazil gradually dried up after reaching a record high of $7.5 billion in 2015, becoming essentially nonexistent by the beginning of the 2020s.
Lula will likely be preoccupied with boosting the economy due to his nation’s slow growth, high unemployment rate, and debt. He will also likely be constrained in his ability to forge new international alliances and unable to rely on rhetoric of South-South cooperation and economic ties to guide Brazil’s relationship with China. But there are some advantages to Lula’s Brazil that suggest adjustments the two nations can make. Lula has exhibited encouraging signs of handling global power dynamics.
China in Latin America
Unlike a decade ago, Xi is no longer need to engage in the same diplomatic battles in Latin America. Until recently, Taiwan was formally recognised as an independent nation by fifteen of the thirty-three Latin American and Caribbean nations. Now, only eight nations in the area still recognise Taiwan despite years of resistance from China. Twenty-one Latin American and Caribbean nations have joined the BRI, and China has forged solid bilateral ties and free trade agreements with Chile, Costa Rica, Panama, and Peru. Even Mexico, the United States’ most steadfast friend in the area, experienced a record amount of Chinese foreign direct investment in 2021, amounting to about $400 million due to pandemic and trade war disruptions. China has a significant economic presence in the region.
The future of Brazil-China relations and Lula’s fifth visit to China are, at best, unduly hopeful. More likely than not, Lula will work to increase trade and investment with China, keep Brazil at the forefront of the fight against climate change, and use multilateral fora like BRICS to uphold neutrality in the age of strategic rivalry. The effect of Brazil assuming the role of a middleman between the United States and China will be for the entire world to see as it gets ready to host the G-20 conference in 2024.
(Aayush is a post-graduate student in International Relations at Kalinga University, Raipur. The opinions expressed are the author’s own)
Balaji Subramanian 
Palak Dogra