What it is and how it impacts Brazil

The Chinese president’s visit crowned a new level in the relationship between the two countries. In an event that drew attention due to protocols, honors and a strong security system, cooperation agreements were signed that promise to open spaces for new Brazilian agricultural products in the Chinese market, our main trading partner.

The biggest impact of the meeting, however, was due to Brazil’s non-adherence to the main Chinese investment project abroad, the “Belt and Road”, also known as the New Silk Road.

Abbreviation for two Chinese projects – the Silk Road Economic Belt and the 21st Century Maritime Silk Road – the name is a reference to the network of trade routes that, in ancient times, connected the East to the Roman Empire. The luxurious fabric invented by the Chinese won over Europeans and became the main commercial product.

As in the past, the ambitious project, called in English Belt and Road Initiative (BRI), wants to logistically connect China to countries in Asia, Europe and Africa, through infrastructure financing in different countries.

In this way, China intends to facilitate the flow of industrial production, expand markets and increase its political, economic and cultural projection in the world.

Contrary to the expectations of the Asian giant, however, Brazil chose not to formally join the plan and only agreed to a cooperation plan between the BRI and projects of interest to Brazil.

“We will establish synergies between Brazilian development strategies, such as the New Industry Brazil (NIB), the Growth Acceleration Program (PAC), the South American Integration Routes Program and the Ecological Transformation Plan, and the Belt and Road Initiative “, said the Brazilian president in his speech.

Caution in negotiating with the Chinese came from Itamaraty

Caution in negotiating with the Chinese was advised by Itamaraty, following the Brazilian diplomatic tradition of avoiding direct alignments with countries or economic blocs.

The idea is to preserve relations with the United States, which has China as its main economic competitor and geopolitical adversary in the world. Predictions prior to the pandemic indicated that the Asian country could overtake the American economy by 2028.

“What Brazil did was well designed because it can enjoy all the benefits of the Belt and Road, including resources, trade flow and infrastructure, but without formalizing membership, something that could offend the United States”, says Lívio Ribeiro, researcher associate at FGV Ibre and partner at BRCG Consultoria.

Informally, the Americans had already sent a message to the Brazilian government. The United States Trade Representative, Ambassador Katherine Tai, who attended an event in São Paulo in November, even warned about possible developments.

“If Brazil is considering the Belt and Road Initiative, it will need to take into account not only its own risk appetite and risk management strategies, but also the risk profiles and considerations of other countries, especially key partners,” he said. in an interview with Folha de S.Paulo.

Brazil may use rapprochement with China to extract concessions from the US

For Vinícius Rodrigues, professor of Economics and International Relations at Fundação Armando Alvares Penteado (FAAP) and doctor in International Relations from Nuffield College, Brazil’s departure from the issue was strategic.

By establishing only cooperation treaties, Brazil tries to have the “bonus” of receiving necessary resources for investments, “without bearing the burden” of political alignment. Furthermore, you can use the episode as a bargain in agreements with other commercial partners.

“[A aproximação com a China] it can be used to improve our commercial relations with the West itself, especially the USA”, states Rodrigues, remembering that the American negotiations regarding the expansion of trade with Brazil have not been “significant”.

The agreement with China could, according to him, favor bilateral negotiations after the inauguration of President-elect Donald Trump, who has already revealed his intention to impose tariffs on imports of products around the world.

“The ideal is to use China’s interest to extract maximum concessions from both sides”, argues Rodrigues. “Perhaps this way the West will offer something in return to Brazil in terms of infrastructure or even technology, with more substantive partnerships, as it has honestly never offered.”

New Silk Road already reaches 147 countries

Since it was launched in 2013, at the beginning of Xi’s term, the BRI has already consumed US$1.029 trillion in works in countries on five continents, according to data from the Council on Foreign Relations (CFR), the North American study center on international relations. Since then, 147 countries have joined or are interested in joining the plan.

In Latin America, among the 20 countries that are already part of the project, the highlight goes to Peru, where a megaport was opened in November in the city of Chancay, 80 kilometers north of Lima.

Cosco Shipping Company, a Chinese state-owned container transport company, financed the work, which consumed US$3.4 billion (around R$19.7 billion) over eight years.

The idea is to transform Peru into an important logistical center for trade between o South American continent and Asia, reducing the period for transporting goods from 40 to 28 days.

Brazil will be able to use the port to transport its agricultural production, especially soybeans, to China. The Minister of Planning and Budget, Simone Tebet, visited Peru in March to “learn about the plans and strategies to boost South American integration routes”.

“[O acesso ao porto] It is an example of an advantage that Brazil can enjoy, benefiting above all agribusiness, which depends heavily on the Chinese market”, states Rodrigues. “The reduction in transportation time and cost will increase the competitiveness of our products, including to other destinations on the Pacific coast, creating another advantage in trade with the United States.”

China “plants flag” in Latin America

For Lívio Ribeiro, Brazil needs to catch “the sting” of Chinese interest in the continent, which has “taken the United States’ sleep”.

“It seems relatively clear that China has ‘planted its flag’ especially in the Andean countries. It is spreading its tentacles across the historic American backyard,” he says. “For a long time, the United States has ignored Latin America, nothing less than Mexico. Now they must want to regain their zone of influence and this is interesting for us, who managed, without joining the Chinese project, to maintain a respectful approach”.

Rodrigues shares the vision. “[Se aderisse à Rota da Seda]then yes, the country would establish a very compromising degree of rapprochement with China”, he says.

For him, it is “very risky to align with any country, even more so with China”. “This is indisputable. Because all the countries that are part of the project end up under pressure to not only have economic collaboration, but political collaboration with the country. Even Europeans couldn’t escape it. An example is Italy, which joined the project and then left, recalls Rodrigues.

Italy joined the BRI in 2019 and left in December 2023, through the efforts of Prime Minister Giorgia Meloni.

New Silk Road has anti-Western dimension

In the experts’ assessment, Brazil’s position will require diplomatic efforts to avoid clashing with Western interests.

“The New Silk Road has a strong political dimension and an anti-Western political dimension”, says Rodrigues. “What Brazil has to avoid at this moment is taking sides, much less taking sides against the West.”

The concern is amplified by the moment of global geopolitical tension in which initiatives such as Brics – a group of emerging countries whose members include China and Russia, historical American rivals – question US hegemony and suggest a multipolarized economic and political model.

For Rodrigues, Brazil’s permanence and commitment to strengthening the BRICS does not, in itself, mean an anti-American stance.

“If it were up to China and Russia, this could be true,” he says. “But for Brazil, India and South Africa, it is not, under any circumstances, interesting to have a speech against the United States and Europe. Brazil even managed to block Venezuela from entering the bloc, in line with American interests.”

The professor notes that India and China are enemy countries, but remain in the bloc. India buys oil from Russia and is courted by the Americans and Europeans precisely to contain China. “We live in a world where the idea of ​​multiple alignments is growing,” says the economist. “As long as it is possible to maintain them, the better for countries like Brazil.”

Critics of Brazil’s alignment with the bloc’s countries argue that there is veiled support for Russia in the war against Ukraine and for Hamas terrorists in Israel’s war against terror in the Gaza Strip. China finances Iran, which in turn finances Hamas.

“Brazil is not entering into a pact against the West, participating in the BRICS,” says Ribeiro. “I don’t buy the thesis that we are adhering to the ‘axis of evil’. However, the class photo is getting uglier, it’s unmistakable. Saying that we are ideologically aligned with Iran, Saudi Arabia and Venezuela makes things worse. We’re hanging out with a strange crowd.”