If it weren't for the flu and pneumonia, 77-year-old Brazilian President Luiz Inácio Lula da Silva's state visit to China would have taken place from March 26 to 31, and he would have been the first foreign head of state to be received by Chinese President Xi Jinping after Xi's reelection earlier that month. After two weeks of delays, Lula arrived in China on April 12 with a larger-than-planned delegation of ministers, governors, parliamentary members and about 240 businesspeople.

Many Chinese media describe Lula, who previously served two presidential terms from 2003 to 2010, as "an old friend of China." "During Lula's first two terms in office, he laid a solid foundation for cooperation between China and Brazil in all aspects. Over the past four years under former President Jair Bolsonaro, although bilateral economic and trade relations maintained rapid growth, communication in other areas didn't progress correspondingly. The return to power of Lula in January has given China a very high expectation that there will be a marked improvement in cooperation between the two countries, especially in the degree of strategic mutual trust," Zhou Zhiwei, Executive Director of the Center for Brazilian Studies at the Chinese Academy of Social Sciences, told Beijing Review.

Beyond trade

During Lula's first two presidential terms, Brazil's economy grew at an average annual rate of 4.4 percent, per-capita GDP tripled, unemployment fell to a historical low and more than 20 million people were lifted out of extreme poverty. In 2010, Brazil's GDP grew 7.5 percent and a poll released by Datafolha in December that year showed that Lula's approval rating was as high as 83 percent, making him one of the most popular politicians in Brazilian history.

In 2022, however, Brazil's GDP growth was 2.9 percent, according to the Brazilian Institute of Geography and Statistics. The country's central bank projected a 0.84-percent economic expansion for 2023 at the beginning of the year.

In an interview with the EBC, Brazil's state-owned public broadcaster, on April 10, he said the government's priority now is to revive stalled economic growth and launch a new infrastructure investment program. He hopes to use his visit to consolidate relations with China, up export to China and attract greater Chinese investment to create new jobs and productive assets such as highways, railways and hydropower plants.

China has been Brazil's top trading partner for 14 consecutive years. In 2022, China's imports from Brazil came in at over $109.52 billion and its exports totaled roughly $61.97 billion. Brazil became the single biggest overseas destination for Chinese capital in 2021, when it attracted 13.6 percent of China's outbound direct investment.

"The Chinese Government announced an around 5-percent economic growth target for this year. This is significant growth for a country with a GDP close to $18 trillion. As the largest trading partner of more than 100 countries, including Brazil, it is encouraging for many governments. This also means that competition for opportunities in the Chinese market will intensify," Evandro Menezes de Carvalho, Director of the Center for Brazil-China Studies at the Getulio Vargas Foundation (FGV) School of Law in Rio de Janeiro, told Beijing Review.

"Trade with China has made important contributions to Brazil's economic development in the past two decades, " Jiang Shixue, senior research fellow with the Chinese Academy of Social Sciences and Director of the Center for Latin American Studies at Shanghai University, told Beijing Review. Jiang believes both China and Brazil need each other as the two economies are highly complementary: China needs to find suppliers of agricultural and mineral products beyond the United States and Australia, and Brazil's best-selling products to the Chinese in 2022 were soybeans (36 percent of total exports) and iron ore (20 percent).

During Lula's visit, China and Brazil signed cooperation agreements covering areas such as healthcare, agriculture, education, culture, finance, industry, science and technology. "Brazil has a huge possibility of developing the process of sustainable domestic reindustrialization through the intensification of exchanges with China," José Ricardo dos Santos Luz Júnior, Co-Chairman & CEO of LIDE China, the China branch of Brazil's global organization of business leaders, told Beijing Review. "Much more than the important commercial relationship that already exists in traditional sectors, we have seen the possibility of increased exchange in areas strongly impacted by innovation and sustainability, including smart manufacturing, Agriculture 4.0, e-commerce, digital economy, digital infrastructure, clean energy and electric vehicles."

On March 29, China and Brazil announced an agreement for trade between them to be settled in their own currencies, ditching the U.S. dollar as an intermediary. It is generally believed this agreement will promote the expansion of trade and investment between the two countries. "It sends an important signal that the two countries are willing to get closer and closer in this sphere, putting more dynamism in their relationship and seeking alternative ways to do business," Pedro Steenhagen, senior specialist at Observe China, an independent think tank based in Brazil, told Beijing Review.

Steenhagen said the yuan is only the eighth most used currency in Brazilian transactions, though commercial and financial relations between China and Brazil have become increasingly relevant. But the deal simplifies financial operations between the two nations and brings increased potential for the diversification of their trade agenda and the expansion of business between them. "Another important point is that it tends to bring more stability to bilateral relations, reducing the possibility that international conflicts affect commercial and financial matters," he said.

Overall partnership

Before meeting with Chinese President Xi Jinping in Beijing, Lula attended former Brazilian President Dilma Rousseff's inauguration as head of the BRICS New Development Bank in Shanghai.

It was during Lula's second presidential term in 2006 that the foreign ministers of Brazil, Russia, India and China met for the first time, marking the BRIC mechanism began to take shape. In 2010, South Africa joined, adding an S to the existing acronym. The special arrangement to witness Rousseff's inauguration highlighted Lula's faith in the effectiveness of the BRICS mechanism and also showed Brazil's commitment to joint efforts for improving the global governance system and promoting multilateralism.

This is also an important reason why both China and Brazil attached great importance to Lula's visit in addition to the economic factors. "China and Brazil share broad common interests in global agendas. An important feature of bilateral relationship is that both countries are large emerging economies and representatives of developing countries. Their understanding of global affairs and initiatives for global security and development are mostly consistent," Zhou said. He stressed that in the complex geopolitical and economic situations, developing countries like China and Brazil must strengthen the coordination of their positions on major international issues and expand their diplomatic cooperation.

Whether it is infrastructure projects under the framework of the Belt and Road Initiative or joint efforts to peacefully resolve the Ukraine crisis, continued cooperation will consolidate the partnership between China and Brazil.

"People usually focus on trade and investment to show that the bilateral relationship is better than ever. Nonetheless, in the complex and sometimes unpredictable world we live in, building profound partnerships is essential," Steenhagen said. "So, my main expectation for the future of the relationship between Brazil and China is that they will have more coordination, integration and people-to-people exchanges, expanding their current agenda and providing the grounds for a true and effective partnership that goes way beyond the commercial sphere." 

Copyedited by G.P. Wilson

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