Fri | Dec 6, 2019

Economy in mind, Bolsonaro changes tack on China

Published:Friday | November 15, 2019 | 12:27 AM
China's President Xi Jinping, left, walks with the Brazil's President Jair Bolsonaro, upon Xi Jinping's arrival for a bilateral meeting on the sidelines of the 11th edition of the BRICS Summit, at the Itamaraty Palace, in Brasília, Brazil, Wednesday, Nov. 13, 2019.

In the months before last year’s presidential election in Brazil, Jair Bolsonaro described China as predatory and thumbed his nose at the Chinese government by visiting Taiwan, Beijing’s arch-rival.

Now, as a more pragmatic president, Bolsonaro welcomed Chinese President Xi Jinping to an international summit that began Wednesday in Brasilia, the capital.

The first item on the agenda for Bolsonaro, a far-right leader who has sometimes tried to hang the communist label on his political rivals in Brazil, was a bilateral meeting with Xi.

He received Xi at the foreign relations ministry with smiles and handshakes, and the two signed a handful of memoranda. It’s a sign of how Bolsonaro views China as critical to his ambitions to rejuvenate Brazil’s sluggish economy.

“China is an ever greater part of Brazil’s future,” Bolsonaro said in a speech after the two leaders met, adding his government will devote due care, respect and consideration to China.

Gone is last year’s fiery campaign trail rhetoric about China being a rapacious power intent on exploiting Brazilian resources.

China is, after all, Brazil’s biggest trading partner.

As China expanded rapidly in the 2000s, eventually becoming the world’s second-largest economy, it relied on commodities from producers. Brazil, Latin America’s largest economy, shipped soybeans, iron ore and crude to satisfy China’s expanding appetite. Those three products account for more than 80% of Brazil’s exports to China.

Bolsonaro said his government wants to diversify exports to China, and welcomed a signal from China’s government that it wants to help Brazil add value to output.

Xi’s visit for a meeting of leaders of the BRICS emerging economies – Brazil, Russia, India, China and South Africa – is his first to Brazil since 2014.

But his relationship with Bolsonaro has already been blossoming.

Just last month, Bolsonaro travelled to Beijing for economic and other accords, including the exemption of Chinese nationals from Brazil visa requirements. Xi received him at his car and they walked side by side on a long, red carpet.

“Bolsonaro discovered how important China is to Brazil and that he can do business with China. And he’s more or less happy with that,” said Maurício Santoro, professor of international relations at Rio de Janeiro’s state university.

Before he became president, Bolsonaro praised the US and often said China can buy from Brazil, but not buy Brazil itself – rhetoric that continued for a while after he took office on January 1.

The hostile remarks didn’t last.

Brazil is dependent on foreign investment, especially from China.

Confirmed Chinese investments in Brazil between 2007 and 2018 totalled almost US$60 billion, more than any other Latin American country, according to the Brazil-China Business Council, a Brazilian research centre.

Investments faltered in 2018 ahead of Brazil’s election, part of a broader decline stemming from investor caution.

Not picking sides

After Bolsonaro won the presidency, he took his first trip abroad to the US, then in the midst of a growing trade dispute with China. But Brazil didn’t get caught in the middle.

“Brazil has all the reasons to work with both countries and not pick sides,” said Pepe Zhang, associate China director at the Washington-based Atlantic Council. “So far, it’s doing a good job.”

In August, amid Western criticism of Brazil’s handling of fires raging in the Amazon, China defended Brazil’s sovereignty over the region. Bolsonaro, on Wednesday, described China’s support as “a grand gesture that strengthened us a lot.”

Xi said China intends to increase trade and investment, and will eye opportunities for cooperation in areas including agriculture, electricity, oil, and infrastructure.

“With even greater trust, we are going to work together to guarantee China and Brazil’s friendship advances in the right direction, overcomes all difficulties, and arrives with firm steps to a brighter future,” Xi said.

As Brazil-Chinese diplomacy advances, there are delicate issues to navigate.

The United States, for example, is pressuring the Brazilian government to exclude Chinese telecommunications giant Huawei from its auction next year to provide a 5G network.

The US State Department says that Huawei poses cybersecurity risks and that it will review the way it shares intelligence about Venezuela with Brazil if Huawei is allowed to provide 5G service.

The US and Brazil consider Venezuelan President Nicolás Maduro to be illegitimate and want him to resign.

China, which extended billions of dollars in oil-backed loans to Maduro’s administration, continues to support his regime.

Bolsonaro knows he won’t find common ground with Xi on Venezuela, and will likely focus on luring more Chinese investment and trade, said Santoro, the international relations professor.

One of Bolsonaro’s main challenges is boosting economic growth, with Brazil headed towards its third year of subdued activity after two years of deep recession. He handed the reins of economic policymaking to a University of Chicago-trained economist, Paulo Guedes, who is taking steps to improve business conditions, carry out a vast privatisation programme, and reduce trade barriers of Brazil’s protected market.

Guedes said in a speech Wednesday at a BRICS event that his team is discussing with China the possibility of creating a free-trade area.

Some Brazilians were concerned that Bolsonaro as president would assume a “bipolar vision of the world” and closely align with the US at the expense of China relations, said José Pio Borges, president of Cebri, a Brazilian research centre that studies China.

“Now, after all these reunions and initiatives, it’s clear that Brazil wants to have relationships with everyone,” Borges said.

– AP