China needs a new strategy to deal with Brazil’s new right-wing president

  • Gustavo Oliveira writes that while Jair Bolsonaro campaigned on an anti-China platform, Beijing still has reasons, many of them trade-related, to maintain good relations
  • China’s government can deal pragmatically with the new administration, and the Communist Party can strengthen ties with the Brazilian left
PUBLISHED : Sunday, 13 January, 2019, 1:40pm
UPDATED : Sunday, 13 January, 2019, 10:06pm

Jair Bolsonaro took office on January 1 to serve as the 38th president of Brazil. His term will run until the end of 2022, when he will be eligible for re-election for another four years. This worries the Chinese government, since Bolsonaro campaigned on a virulently anti-China platform.

Brazil is China’s largest commercial partner in Latin America, and China surpassed the US to become Brazil’s No 1 trade partner for the past decade. So there are many reasons to maintain good relations between the two emerging economies.

The basic principle of the Chinese government has been non-interference in the internal affairs of other countries, and a pragmatic willingness to do business with anyone in power. Chinese experts on Latin America say that the Chinese government will reach out to Bolsonaro’s administration, trying to demonstrate the economic importance of the strategic partnership, which was established in 1993 (in fact, China’s first strategic partnership worldwide).

High-level officials in the Brazilian diplomatic corps and the New Development Bank, better known as the BRICS Bank, have also expressed sentiments that Bolsonaro’s campaign rhetoric will be blunted now that he has taken office, as senior officials and Brazilian lobbyists convince Bolsonaro of the importance of maintaining bilateral and multilateral commitments, and sustaining trade that benefits Brazilian businesses.

These arguments carry weight. After all, Brazilian exports to China amounted to US$47.5 billion in 2017, an increase of 30 per cent from the previous year, when Brazil faced recession and exports to the rest of the world increased merely 3 per cent. This resulted in a positive balance of trade of US$20 billion with China. Germany is the only other western country that maintains a positive balance of trade with China.

‘Trump of the tropics’ Jair Bolsonaro sworn in as Brazil’s president

The US-China trade war also brought windfall profits for Brazilian soybean farmers and exporters, who filled the gap of foreclosed US sales to China until last month. In 2018, Brazil exported a record 83.8 million tonnes of soy, 23.1 per cent more than the previous year, the vast majority to China. Brazil’s outgoing and incoming agricultural minsters have both been very vocal that Bolsonaro should and will maintain a policy of market access for Brazilian agribusiness exporters. The same can be expected for Brazilian iron ore and petroleum, the second and third largest exports to China after agricultural products.

But as the US-created trade war shows, strong commercial ties themselves can become a point of contention in the hands of far-right ideologues. And Bolsonaro has played the part, saying that “China does not buy [goods] from Brazil, China is buying up Brazil [itself]!” Bolsonaro’s foreign minister distinguished himself for outlining a new foreign policy centred on aligning Brazil with the US and against China. This certainly confronts the incipient expansion of China’s Belt and Road Initiative to Latin America, which has progressed slowly because of sustained US criticism. In her congratulatory tweet to Bolsonaro, the former US ambassador to the UN, Nikki Haley, stressed that “It’s great to have another US-friendly leader in South America … who clearly understands the danger of China’s expanding influence in the region.”

Washington takes swipe at China’s ‘predatory’ ties with Brazil

Some suggest Chinese businesses should not worry about Bolsonaro’s rhetoric and focus instead on his pro-business promises. But this overlooks the deep-seated anti-China sentiments of Brazilian elites. Industrialists feel unfairly outcompeted by the “dumping” of cheap Chinese manufacturing, and pushed even the China-friendly Workers’ Party administrations to establish more anti-dumping measures against China than most other countries.

Agribusiness elites in congress and in the private sector are reaching an agreement to remove restrictions on acquisitions of farmland by foreigners – restrictions established in 2010 during a moment of anti-China fervour. But they vow to keep specific restrictions on state-controlled companies that target Chinese investors in particular. Brazil also represents one of the world’s largest markets for mobile phones and 5G technology, but China’s Huawei Technologies has been frustrated in its attempts to gain a foothold in the Brazilian market since 2002. With Bolsonaro now at the helm, it is certain that Brazil will join the Trump-led boycott of Chinese 5G technology.

So how can China deal with Brazil’s new anti-China administration? Thankfully, China maintains a dual structure of power. The Chinese government can be pragmatic and not ideological in dealing with the (ideological) Bolsonaro administration. Meanwhile, the Chinese Communist Party (CCP) can seek to strengthen its solidarity with Brazilian leftist parties, social movements, and civil society to weaken the anti-China impact of Bolsonaro’s far-right administration. After all, it was through collaborations with Brazilian communists, journalists, and leftist intellectuals that China was able to establish commercial ties with Brazil during the early 1960s, and gain formal diplomatic recognition from Brazil during the early 1970s – despite the virulently anti-communist military dictatorship that ruled Brazil at the time.

Bolsonaro may relish Brazil’s past military dictatorship, but he won’t be able to rule for 20 years. The Brazilian left is realigning with the awareness that Lula (the popular but imprisoned ex-president who led the Workers’ Party government from 2003 to 2010) may die soon. Soon enough leftist social movements will gain ground in Brazil as Bolsonaro’s pro-business policies start taking effect.

Soybean giant Brazil swoops on US crop as China trade war punctures prices

We are witnessing something similar in Europe, where the gilets jaunes (yellow vests) movement is destabilising French President Emmanuel Macron’s neoliberalism and spreading to the rest of the continent. In Germany, the left is realigning with the Green Party and Aufstehen (Stand up) movement as Chancellor Angela Merkel’s centre-right coalition loses ground. In Britain, a new generation of socialists elevated Jeremy Corbyn to lead the Labour Party and stands poised to take power as the Tories fumble Brexit.

And in South America, the CCP has been invited to participate in the World Peoples’ Assembly in Venezuela this February, where leftist parties and social movements from around the world will gather to strategise against the rise of the far right. If the CCP joins and helps to strengthen this new left, it will weaken far-right movements and lay the foundation for the re-establishment of China-friendly administrations in Brazil and beyond.

Gustavo Oliveira is assistant professor of global and international studies at the University of California, Irvine.