President Lula’s visit to China this week is a signal that both Brazil and China seek to play a significant role in the current post Covid fractured world which is rife with conflict, supply chain constraints, climate change and war. Since the re-election of President Lula in November 2022, he has been re-surgent global in the regional and international arena. Lula has always committed to “put Brazil back on the world stage’ after the nationalist, chaotic years of the Bolsonaro era. In doing so Lula has had a busy international schedule. Brazil under President Lula is committed to a ‘more fair and balanced world order’, solid south- south co-operation and the BRICS grouping.
China is already Brazil’s largest trading partner, and Lula hopes to diversify and expand those trade flows. Several agreements will be signed this week. His delegation reportedly included more than 200 major business leaders, including the billionaire owners of the meat processing giant JBS, half a dozen ministers, three state governors and dozens of lawmakers, among them the senate president, Rodrigo Pacheco. Lula is being received by both Xi and his close ally Li Qiang, the former Communist party chief of Shanghai who was recently named China’s new premier.
Ahead of the visit, China’s Foreign Ministry said that as leaders of “major developing countries,” Xi and Lula would “bring our comprehensive strategic partnership to a new height, and make new contributions to regional and global stability and prosperity.”
China’s exports surged in March as the world’s second-largest economy continued to rebound from Beijing’s harsh “zero-COVID” pandemic policies. Total exports soared 14.8 percent year on year, customs data showed on Thursday, the first rise in six months and a sharp rise from March last year, when lockdowns crippled the economy. Imports fell a smaller-than-expected 1.4 percent.
In response, “I will invite [Chinese President] Xi Jinping to Brazil for a bilateral meeting to show him projects for which we want to attract Chinese investment,” he added, without elaborating on when Xi’s potential visit would take place.
Lula’s visit to China is part of the new Brazilian government’s efforts towards re-establishing international relations, which also include recent trips to Argentina – where the Celac meeting took place –, Uruguay and the US, as well as meetings with European leaders who came to the president’s inauguration in January. This is also Lula’s first trip outside the Western Hemisphere during this third term in office.
The Brazilian delegation to China which began on Thursday in Shanghai had a busy schedule. In the morning, President Lula participated in former Brazilian President Dilma Rousseff’s inauguration as head of BRICS’ (a bloc formed by Brazil, Russia, India, China and South Africa) New Development Bank. This is particularly significant as her experience as President of Brasil, chief of staff under Lula, and chair of Petrobras is important, as she understands foreign relations, administration as well as governance of company boards etc, which is crucial for the NDB.
The NDB is expanding, with new countries set to join and also contribute equity as well as receive loans. Key priorities would be infrastructure development and climate change adaptation mechanism, as well as the ‘Contingency Reserve Arrangement CRA model. Overall the BRICS Finance strategy is growing at bi-lateral level fist, and then scale to global level.
Trade, Investment and Global South – South co-operation key to visit outcomes
Lula was accompanied by a large delegation of business leaders on his trip, many of them from the agriculture industry. Brazil’s exports of soybeans, beef and other commodities to China are crucial to its economy, and Lula seeks to balance this through diversity and technology plans. Lula is also committed to retaining ‘good trade relations’ with key partners, the US and EU and China. His key priorities is to address a) inequality in global south; finance for development; and climate change mitigation and preserving the Amazon, of which substantive funds promised from the North have not been forthcoming.
Bilateral trade between China and Brazil totalled $150bn in 2022 – an increase of 10.1 percent compared with the previous year, S&P Global Market Intelligence analysts Ailsa Rosales and Alejandro Duran Carrete wrote in a briefing note on April 6. Brazil mainly exports iron ore, soybeans and crude petroleum to China, while semiconductor devices account for the largest share of Chinese exports to the Brazilian market, according to data compiled by the Observatory of Economic Complexity.
Co-operation on Global Development and Global Peace agenda
President Lula and President Xi’s foreign policy have greatly converged in the past 3 months in a complex, fractured world. Their joint global-regional priorities are now firmly rooted in a global engagement with multilateral institutions and power centres, with a view of promoting an equitable and peaceful global order. In this regard, Lula has said he also planned to suggest mediating peace talks between Russia and Ukraine during his meeting with Xi on Friday. Among Western leaders, the proposal has only been welcomed by French President Emmanuel Macron so far. In terms of the global developmental domain, both President Lula and President Xi are committing themselves to a new Global Development Initiative’’, as well as a new Global hunger accord aimed at addressing the current world hunger crisis.
This visit and its outcomes also bodes well for Africa and its efforts at rebuilding its economies, which are currently facing a new debt crisis, and weaker than expected post Covid growth prospects, with IMF forecasting South Africa’s GDP growth at a paltry 0.2%, as alarm bells ring as South Africa’s famed ‘loadshedding’ a moniker for a failing state, even its annual Investment summits have failed to attract the relevant FDI needed for growth.
These initiatives by the ‘giants of the global South’ are cementing the role of President Lula and Presidents’ Xi as committed leaders of a fairer world – rooted in the traditions of multilateralism, equitable development, peace and common prosperity for all.
Mr. Ashraf Patel is the digital data and economy associate at the IGD. His research is also supported by the National Institute for Humanities and Social Sciences (NIHSS) and the South African BRICS Think Tank (SABTT). Mr. Patel’s views do not necessarily reflect those of the IGD
This article was first published in the Sunday Independent, 16 April 2023.