Brazil-China relations: A comprehensive exploration of economic and diplomatic ties including U.S. dynamics

In recent discussions between Brazilian Foreign Minister Mauro Vieira and Chinese counterpart Wang Yi in Brasilia, both nations emphasized the strengthening of economic cooperation. In essence, Brazil-China ties encompass a multifaceted relationship that intertwines economic and historical dimensions, shaping the global positioning of both nations.

Brazilian Foreign Minister Mauro Vieira and his Chinese counterpart, Wang Yi, recently held a meeting in Brasilia to strengthen economic cooperation. The discussions at the Itamaraty Palace resulted in agreements in key areas such as trade and tourism. Vieira highlighted the positive effects of these deals during a press briefing.

The talks covered not only economic matters but also delved into global geopolitical issues. Vieira disclosed that discussions included the conflicts in Ukraine and the Gaza Strip, with both ministers aiming to explore how China and Brazil could contribute to resolving these international challenges.

Emphasizing the comprehensive review of China-Brazil relations, Vieira reiterated Brazil’s commitment to the one-China principle. He also discussed potential further collaboration between the two nations. Wang Yi acknowledged the existing strong economic ties and expressed a desire to elevate the global strategic partnership to new heights. Both ministers affirmed their commitment to contributing to the unity of developing countries, peace, and global development.

The Chinese minister, Wang Yi, expressed China’s constructive intent to contribute to world trade, peace, and stability within the framework of a multipolar world. Wang underlined the maturity and resilience of the relationship between Brazil and China. He specifically pointed to the intention to strengthen collaboration in crucial sectors like agriculture, mining, and infrastructure. This highlights both nations’ commitment to furthering their partnership and fostering mutual growth and development.

 

History

The early connections between Brazil and China can be traced back to their mutual involvement in the Portuguese Empire, particularly through the participation of Brazil and Macao. One significant historical event occurred in 1812 when Queen Maria I of Portugal, then residing in Brazil, brought Chinese labourers to work on a tea plantation near Rio de Janeiro. Another wave of Chinese immigrants settled in São Paulo in 1900.

Formal diplomatic relations between the Empire of Brazil and the Qing Dynasty were established in September 1880 with the Treaty of Friendship, Commerce, and Navigation. However, there were challenges in negotiations, particularly regarding Chinese labourers, as the Chinese were reluctant to permit Brazilians to hire them due to concerns about their treatment.

Relations between Brazil and China went through changes following the Chinese Civil War (1927–50), and formal ties were re-established with the People’s Republic of China in 1974. In the 21st century, some frustration among Brazilian businessmen arose due to perceived slow progress in certain aspects of the relationship. Brazil officially recognized China as a market economy in 2004, but corresponding changes to trading arrangements were not implemented by 2009.

Despite these challenges, agreements were reached on various issues, and a strong personal relationship developed between the leaders of the two nations. The second BRIC Summit in 2010, held in Brazil, further emphasized the potential for increased cooperation between Brazil and China in political, trade-related, energy, mining, financial services, and agricultural matters.

To enhance dialogue and coordination, Brazil and China established the China-Brazil High-Level Commission for Coordination and Cooperation (COSBAN) in 2004. COSBAN serves as a crucial mechanism for high-level discussions between the two countries, with a focus on areas such as energy and climate change action.

Chinese President Hu Jintao, in an address to the Brazilian Congress in November 2004, highlighted the common experiences of both Latin America and China in gaining national liberation and constructing their countries. He emphasized the potential for mutual support in political matters, economic complementarity, and cultural exchange between China and Latin America.

Between 2009 and 2014, Brazil and China engaged in frequent and effective cooperation, including their participation in the BASIC group to coordinate positions on climate change issues. The 2010 Joint Action Plan guided subsequent bilateral climate change cooperation, emphasizing environmental protection and energy security. However, Brazil’s economic crisis in 2014 impacted its ability to fund initiatives, leading to a decline in Brazil-China cooperation.

Before his presidency in 2018, Jair Bolsonaro criticized China, expressing concerns about Chinese influence in Brazil. However, as president, Bolsonaro adopted a generally pragmatic approach to China, avoiding confrontation. During his presidency, Brazil remained a primary destination for Chinese investment in South America.

In August 2019, China defended Brazil from Western criticism regarding the Amazon rainforest wildfires. The Chinese Ambassador to Brazil dismissed the criticism as “fabricated,” earning thanks from President Bolsonaro.

In October 2019, President Bolsonaro paid an official visit to China, meeting with Chinese leader Xi Jinping. Despite previous criticism, Bolsonaro’s approach during the visit was generally pragmatic.

During the second term of President Luiz Inácio Lula da Silva, his foreign policy goals included rejuvenating the Brazil-China relationship. Lula visited China during the 2023 Brazil–China summit, where discussions included the potential mediating role of Brazil and China in the conflict between Ukraine and Russia. Lula also attended the inauguration of Dilma Rousseff as President of the BRICS Bank in Shanghai, expressing determination to continue developing the relationship with China.

Economic Relations

China has been Brazil’s leading trading partner since 2009, and the economic ties between the two countries have continued to strengthen. In 2022 alone, Brazil exported $91.26 billion worth of goods to China, primarily consisting of soybeans and mineral products. On the other side, Brazil imported $61.5 billion in mostly manufactured goods from China. The total bilateral trade volume for the year amounted to $152.8 billion, marking a substantial 37-fold increase since the beginning of President Lula’s first term in 2003.

In addition to the significant economic engagement, Brazil and China have deepened their diplomatic relations over the past few decades. China officially designated Brazil as its first “strategic partner” in 1993, signifying the importance of the relationship. Furthermore, in 2012, China elevated the partnership to a “global strategic partner,” underscoring Brazil’s crucial role in China’s broader international strategy.

Brazil’s relationship with China is primarily driven by economic considerations. China is a significant buyer of Brazilian exports, accounting for approximately one-third of all outbound shipments. This economic partnership is especially prominent in the agricultural sector, where China purchases a substantial portion of Brazil’s soybeans and beef.

The heavy reliance on Brazilian commodities has not only made China a crucial trade partner for Brazil but has also given rise to a potent pro-China lobby within the country. The Brazilian agribusiness caucus, in particular, has a vested interest in maintaining friendly relations with China, as evident when former President Jair Bolsonaro had to moderate his tough stance against China due to opposition from this lobby.

The intertwined nature of Brazilian politics and trade cycles with China adds another layer of complexity to the relationship. Local politics in Brazil can be influenced by the dynamics of trade with China, further complicating decision-making for Brazilian leaders.

 

Tension Factors

Despite the growing relationship between Brazil and China, there are notable points of tension between the two countries. One major concern for Brazil is the perceived imbalance in bilateral trade. Brazil primarily exports mineral and agricultural commodities, such as soybeans and iron ore, to China. In return, Brazil imports mainly high-value-added manufactured goods from China.

Diplomatically and politically, there are additional strains in the relationship. China has not explicitly endorsed Brazil’s historical pursuit of becoming a permanent member of the UN Security Council. This desire stems from Brazil’s post-World War II alignment with the victorious nations. Despite rhetoric advocating for the reform of the international system to reflect shifts in global power and the rise of the Global South, China has been hesitant to support Brazil’s bid, as indicated in a joint declaration after a recent visit.

Another source of tension lies in Brazil’s reluctance to join Chinese-led initiatives like the Belt and Road Initiative (BRI). Unlike some other countries in Latin America, Brazil has reservations about participating in the BRI. This hesitation is likely influenced by potential political costs for Brazil’s relationship with the United States. Despite being China’s top destination for Foreign Direct Investment (FDI) in 2021, Brazil perceives limited additional benefits from joining the BRI and may be concerned about further entrenching its dependency on China.

 

U.S. Influence

brazil’s close economic ties with China have raised concerns and caused tensions with the United States. Despite being a strong trading partner with China, Brazil has emphasized that it rejects being forced into a binary choice between Beijing and Washington. The country’s leadership, including former President Lula, has expressed a desire for positive relations with both superpowers.

While Brazil and China have deepened their diplomatic engagement since the formation of BRICS in 2009, the relationship faces challenges. Brazil has economic concerns, particularly the imbalance in trade where it exports primarily commodities to China but imports high-value-added manufactured goods. Additionally, Brazil has hesitated to join China-led initiatives like the Belt and Road Initiative (BRI), partly due to potential political costs in its relationship with the United States.

Brazil’s leaders recognize the importance of maintaining a delicate balance between China and the United States. Despite having a strong pro-China lobby, there are reservations among Brazilians about China’s international behaviour. Many trust the United States more on issues like peacemaking and security. The domestic politics of Brazil make it difficult for leaders to distance themselves from China entirely, but they are unlikely to get too close to China.

Both China and the United States are significant sources of foreign investment for Brazil. Brazil receives substantial Chinese investment, and Chinese companies have invested billions in the country. However, the United States remains Brazil’s top source of foreign investment. Brazil aims to diversify its economic ties and not attach itself exclusively to one superpower.

In the realm of technology cooperation, Brazil has pursued collaboration with China despite U.S. attempts to dissuade such partnerships. This includes resisting U.S. pressure to exclude Huawei from its 5G networks and expressing a willingness to build a Chinese semiconductor factory. Brazilian leaders view China’s rise as a positive development, providing a means of balancing against U.S. unilateralism.

As Brazil ascends in the global system and seeks a greater role in geopolitical agenda-setting, it maintains an active role in various international institutions. Brazil is careful about BRICS expansion, supporting certain memberships but expressing concerns that adding more members could diminish its influence within the group. Overall, Brazil seeks to maintain its sovereign independence in international affairs, seeing China’s rise as more helpful than harmful to this objective.