Xi’s Brazil Redux

When Jair Bolsonaro was elected Brazil’s president in 2018, alarm bells clanged in Beijing. Bolsonaro had borrowed a page from U.S. President Donald Trump’s book, loudly accusing the Chinese government of taking unfair economic advantage of Brazil during his presidential campaign. “The Chinese are not buying in Brazil. They are buying Brazil,” was Bolsonaro’s repeated mantra. Even more concerning, he visited Taiwan as a presidential candidate in early 2018, signaling increased support for the self-governed island that Beijing claims as part of its territory.

It was no surprise, then, that China-Brazil relations took a chilly turn once Bolsonaro came to office. He even walked out before a planned meeting with Xi Jinping on the sidelines of the G-20 summit this summer, frustrated that the Chinese president was running late. But Bolsonaro has been changing his tune recently, including making a visit to China in October, under pressure to keep relations with Brazil’s largest trading partner intact.

With that in mind, Xi’s visit to Brazil for the BRICS summit on November 13 and 14 was an important test of just how far China-Brazil relations have rebounded. But it’s overly simplistic to declare, as one headline did, that the 2019 “BRICS summit marks [the] recovery of China-Brazil relations.”

A comparison with Xi’s previous visit to Brazil in 2014 is instructive. In both 2014 and 2019, Xi’s visit was pegged to Brazil’s turn playing host for the BRICS summit. But Xi’s 2014 attendance at the multilateral gathering was coupled with an official state visit to Brazil. This year, he held a brief bilateral meeting with Bolsonaro but was not feted with the ostentatious trappings of a state visit. Accordingly, there was precious little information (or, seemingly, interest) regarding China-Brazil relations specifically in Chinese Foreign Ministry press releases related to the trip. Far more attention was paid to the BRICS summit itself, as well as the state visit to Greece that Xi made en route to Brazil.

Xi and Bolsonaro did strike an optimistic tone in their one-on-one meeting. The Brazilian president declared that “China is an ever greater part of Brazil’s future,” and it’s not hard to see where that sentiment comes from. In addition to being Brazil’s largest trading partner, China has invested over $65 billion in the country since 2005, with nearly half that ($31.7 billion) coming in the last five years, according to data from the American Enterprise Institute’s China Global Investment Tracker. That makes Brazil the largest destination for Chinese investment in South America, attracting nearly 40 percent of total flows to the continent. And trade hit a record high of $110 billion in 2018, helped along by the U.S.-China trade war, as Chinese companies look to source soybeans and other agricultural products from elsewhere.

But those figures conceal the roots of Brazilian discontent. Commodities, especially soybeans, iron ore, and oil, currently account for over 80 percent of Brazil’s exports to China. Diversifying trade with China has been high on the agenda for Bolsonaro – and the right-wing leader is far from alone in voicing concerns that China is hollowing out Brazil’s competitiveness in the industrial sector while exploiting its natural resources. But Xi’s remarks during the bilateral meeting didn’t lead to much hope in that regard. Instead of paying lip service to diversified trade, Xi made a point of mentioning that the two sides should “explore ways to establish long-term, stable and direct supply channels for basic products, including agricultural products, iron ore and crude oil.”

More notable than what happened during Xi’s time in Brazil was what did not happen. In 2014, Xi’s visit to Brazil coincided with the signing of several billion in deals. During Xi’s 2019 visit, the two sides inked only nonbinding agreements in transportation, services, and investment, according to AFP. And Brazil still has not joined Xi’s signature Belt and Road Initiative, though there were reports that Beijing was pushing for such an agreement to be signed in November. Despite constant hyping of the potential benefits for Brazil in Chinese media, Beijing had to settle for a vague agreement to explore the potential for BRI cooperation.

Overall, Xi’s visit left the impression that, while China and Brazil’s relationship may not be backsliding under Bolsonaro, it’s not advancing much either.

More broadly, it’s also telling Xi had no other Latin American countries on his itinerary. This year, Xi was only in the region for two days; he spent more time in Greece alone before arriving in Brasilia. Compare that to 2014, when he coupled his time in Brazil with state visits to Argentina, Venezuela, and Cuba for a 10-day trip in total. Part of that discrepancy is coincidence – a planned stop in Chile was cancelled when Santiago called off its hosting of the 2019 APEC summit due to domestic turmoil. But it’s still notable that Xi chose not to use his time in Brazil as a springboard for a wider regional tour as he did five years ago.

Taking Brazil as a bellwether for China’s broader relationship with Latin America, the shine of optimism we saw in 2014 has worn off. Chinese engagement has slowed even as regional countries speak out more forcefully over imbalanced trade relationships – all while the United States steadily increases pressure on its partners around the globe to scale back relations with Beijing. Anyone who thinks Xi’s brief stopover in Brazil in November turned the tide of those trends should take a closer look.