Closer Ties Expected Under Lula

Luiz Inácio Lula da Silva, a Workers’ Party candidate and former President of Brazil, won a narrow victory over Jair Bolsonaro, the right-wing incumbent, on October 30. He is going to serve a four-year term beginning on January 1, 2023.

The relationship between China and Brazil is expected to go upward after Lula’s returning to office. During Bolsonaro’s presidency, his ideology-driven diplomacy has affected political relations between the two countries. By contrast, Lula maintained a positive attitude toward China during his previous two presidential terms from 2003 to 2010. Under his new presidency, the two countries are likely to see closer cooperation in global governance, economy and trade.

New opportunities

The future left-wing government led by Lula, however, is to face a right-leaning congress. Congress election results revealed the strong clout of the conservative force in Brazil’s politics. Bolsonaro’s supporters are mainly from this camp. There are concerns that they might cause disruptions to China-Brazil cooperation, but a country’s diplomatic policy is almost always based on its authorities’ judgement of its own national interests as well as the current and future international landscape. There is reason to believe economic and trade exchanges between China and Brazil are able to fend off negative ideological influence.

Moreover, many right-wing groups are beneficiaries of China-Brazil cooperation, particularly those engaged in agribusiness. The two countries’ economic ties are benefiting a wide range of industries in Brazil including mining, agricultural and industrial sectors. Thus, interference from the right-wing camp in China-Brazil relations is limited.

In August, Lula talked about the risk of “de-industrialization” in Brazil in the wake of the influx of Chinese products. There should be a rational analysis of this statement. Industrialization serves the country’s national interests. After a half century of import substitution, Brazil established a relatively complete industrial system in the 1980s. Today, it is essential for Brazil to enhance its industrial competitiveness. It’s unwise to blame Brazil’s deindustrialization on Chinese goods or to see the influx of Chinese goods as the major factor hindering Brazil’s industrialization. Instead, Brazil needs to increase its inputs into technologies and innovation in its manufacturing sector.

In this sense, Brazil’s reindustrialization strategy offers a good opportunity for China-Brazil cooperation. China’s experience in revving up innovation may be relevant to Brazil. There already exist arrangements for industrial cooperation between the two countries. For instance, a fund established in 2015 for this purpose can help Brazil acquire badly needed investment and equipment. Industrial capacity cooperation enables them to complement each other in different segments of the manufacturing industry and thus integrate their value chains, making bilateral economic and trade relations more diversified.

Promising areas

China has made a historic success in removing absolute poverty. In his former tenure, Lula also made achievements in helping millions of Brazilians escape absolute poverty. However, poverty in Brazil is worsening amid the COVID-19 pandemic. How to address this chronic problem is a priority for the incoming Lula administration. In the digital era, the two need to further their cooperation to improve people’s wellbeing.

In terms of environmental protection, under Bolsonaro, the crack was widening between Brazil and Western countries. For instance, some in the European Union (EU) see Brazil’s honoring of environmental protection commitments as a precondition for a free trade agreement between the South American trade bloc Southern Common Market and the EU. Their rift mainly lies in policies concerning the Amazon region. There are already detectable adjustments in Brazil’s environment policy. There may be opportunities for more international cooperation in Amazon when Brazil adopts Lula’s new environment policy.

When it comes to economic development and investment, Lula hints at absorbing more foreign investment. Regular investment and trade mechanisms have taken shape between China and Brazil in recent decades. Brazil has yet to join the China-proposed Belt and Road Initiative, which aims to promote connectivity along and beyond the ancient Silk Road routes, but it might change its mind in the future. Besides, China’s investment in local infrastructure is expected to maintain the current robust momentum. More importantly, their hi-tech cooperation is to be enhanced. Lula’s outlook on international affairs shares a lot in common with China’s and thus there is a bigger possibility for coordination and cooperation on global issues such as pandemics.

Global affairs

The BRICS grouping, consisting of Brazil, Russia, India, China and South Africa, began to form during Lula’s former eight-year presidency. Lula stressed stronger cooperation among major emerging economies through the BRICS mechanism, believing Brazil has a lot to win from such collaboration.

Global governance is expected to become a major area for China-Brazil cooperation. To a large extent, the understanding of global affairs by Brazil’s Workers’ Party, led by Lula, is in line with China’s, both striving for a fair and equal international order under multi-polarization. Actually, the two countries continuously coordinate with each other through multilateral mechanisms such as BRICS and the Group of 20 for this goal. The fact that BRICS countries often voice the same demands shows developing countries can sing the same tune.

China’s proposals for global governance conform to Lula’s vision for Brazil’s role as a developing country. Brazil is a partner that China works with in advancing the Global Development Initiative, a platform launched by China at the UN for sharing experiences, enhancing cooperation and promoting multilateral synergies for development. The bilateral cooperation should not be limited to trade and investment, but it’s also important for the two to jointly improve global governance.

Together with Brazil, several other Latin American countries have seen the return of left-wing governments. Given their strong desire to have the final say on their own affairs, they will try to win a more equal and independent status in their respective relations with the United States.

Meanwhile, these governments may work to promote the integration of Latin America, particularly of South America. Accelerated regional integration will in turn push forward cooperation with Asia, Africa and Europe. Diversified partnerships are likely to reduce Brazil’s disproportionate reliance on the United States.

The author is a research fellow with the Institute of Latin American Studies, Chinese Academy of Social Sciences.