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Cyril Ip

For now, Brazil is saying no – but yes.
On Monday in Beijing, Celso Amorim, special presidential adviser for international affairs, said the country would not be joining China’s Belt and Road Initiative, a trillion-dollar transnational infrastructure programme launched a decade ago.
However, in the same breath, Amorim also said Brazil would use some of the belt and road framework to find “synergy” between Brazilian infrastructure projects and the investment funds associated with the initiative.
Observers say the announcement reflects divisions within the Brazilian administration over the initiative but it should not affect ties with China, its biggest trading partner, as it looks for a framework that best meets its needs.
Before the announcement, there had been some hope that Brazil would sign up for the initiative during Chinese President Xi Jinping’s visit to the Latin American country this month.
Amorim, alongside Chief of Staff Rui Costa and Gabriel Galípolo, head of Brazil’s Central Bank, visited Beijing last month, to lay the groundwork for the visit.
But, according to Marco Fernandes, a Brazilian geopolitical analyst in Beijing, there was a lack of consensus in President Luiz Inácio Lula da Silva’s government.
Officials at the economy and foreign affairs ministries opposed the idea over concerns that the plan offered few immediate benefits for Brasilia and could complicate ties with Washington. However, Agriculture Minister Carlos Favaro argued that membership could counter protectionist measures from the United States and the European Union amid a long-time battle between the US and Brazil over protections for ethanol and other products, as well as rivalry in exports of farm goods, like corn, cotton and soybeans.
Brazil exports mostly low value-added commodities to China, which generates limited wages and tax revenue, and does not require much innovation. To improve its economy, Brazil is looking for ways to move up the value chain to areas such as renewable energy, minerals processing, telecommunications and artificial intelligence.
“Although China is Brazil’s largest trading partner and Brazil had around a US$50 billion surplus with China last year, their trade pattern is still very unbalanced,” said Fernandes.
Selective – rather than wholesale – involvement in the belt and road could be a better way to do this.
“Amorim said that Brazil was looking for ‘synergy’ with the belt and road and, more importantly, he said that Brazil wanted to elevate its economic partnership with China, which I believe is the key issue of that matter,” Fernandes said.
“I don’t think they went to China just to say, ‘we are not interested in strategic Chinese investments’.
“There is a need to shift the pattern of Chinese investments in Brazil according to our current strategic demands.”




According to Zoon Ahmed Khan, a foreign-policy analyst and research fellow at Tsinghua University’s Belt and Road Strategy Institute, there is much room for the two countries to engage through frameworks that predate the initiative.
“Brazil and China have a history of economic cooperation, and the specific benefits derived from signing a belt and road agreement may perhaps be more symbolic than tangible,” Khan said. “Through Brics, G20 and multiple bilateral mechanics, Brazil’s cooperation with China will only be enhanced.”
Brazil’s decision has drawn comparisons to India’s longstanding reluctance to join the initiative. Both countries are members of the China-backed Brics grouping of emerging economies but Khan said the two were different.
“Contrary to many analyses comparing this to India’s decision, for Brazil, the overarching signal is not to limit cooperation with China but instead to expand it,” he said.
“Brazil sees China as the key player in the [South American] region, especially with respect to its core challenges concerning infrastructure, overall development, food security, and so on.”
Still, it was possible that Brazil would miss out on some key opportunities and representation in initiatives that are specifically curated for the scheme.
“This could mean the Global Development Initiative, and general cooperation on issues such as agriculture, poverty alleviation, technical transfers, and [technical and vocational education and training],” Khan said.


Josef Gregory Mahoney, a professor of politics and international relations at East China Normal University in Shanghai, said the decision might also have been influenced by a “poisonous” media landscape that weighs heavily on Brasilia’s balancing act with Beijing and Washington.
“There has been a tremendous amount of poisoning the well with various false descriptions of the [belt and road] and what it aims to achieve,” Mahoney said.
“This is the media milieu that local leaders have to weigh, in addition to the fact that Brazil needs to maintain good trade relations with both the US and China.”
US trade representative Katherine Tai has urged local officials to assess the risks of joining China’s plan, saying they should “really think about what the best pathway forward is for more resilience in the Brazilian economy” and look at the trade partnership through an “objective lens” and a “risk management lens”.
The Chinese embassy in Brasilia called Tai’s comments “irresponsible” and “disrespectful” and said Brazil’s sovereignty in choosing its trading partners “should be respected”.
“What appears to be the case is that American policymakers as well as influential people in Latin America who support closer relations with the US have been promoting various discredited narratives about the belt and road, for example that it creates debt traps, that it exists as a means to accommodate Chinese overcapacity, and so on,” Mahoney said.
Leaders in South America could risk losing votes at home if they acted against those narratives as they tried to balance finding new investment for Latin America’s largest economy with maintaining amicable ties with the West, its main source of foreign direct investment.
“Because Brazil does have good relations with China, it can seek alternative forms of engagement that would perhaps compensate for refusing to join the initiative,” Mahoney said.
“However there might also be a short-term delay, in other words, Brazil might wait to see what happens with the US presidential elections and what sort of direction the administration takes after its inauguration early next year to [decide upon] how it wants to deal with its relationship with China.”
As reported by the Post last month, Lula was advised by diplomats to delay any announcement about joining the Chinese initiative until after the US presidential election.
“For example, if Brazil finds itself facing a trade war under the Trump presidency then we might see a Brazil that is more inclined to join the belt and road. However, a decision was needed now because it was hoped that this partnership might be announced during President Xi’s upcoming visit.”


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Belt and Road Initiative

No – but yes. Why Brazil is staying open to  China’s Belt and Road Initiative without joining it

Brazil is looking for synergy with China’s Belt and Road Initiative. Photo: AFP

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Diplomacy

Brasilia is not signing up for Beijing’s infrastructure scheme – but that doesn’t mean it’s not interested


Brasilia is not signing up for Beijing’s infrastructure scheme – but that doesn’t mean it’s not interested.


Brazil