The first Chinese-Brazilian project dates back to 1812, when the then Brazilian emperor brought in Chinese workers to develop a tea plantation near Rio de Janeiro, the country's capital at the time. In 1900, a new wave of Chinese immigrants landed in São Paulo. Economic relations between Brazil and China had then been sporadic and remained so until 1949.
Diplomatic relations between the Federative Republic of Brazil and the People's Republic of China were established in 1974. This year therefore marks the 50th anniversary of the establishment of formal diplomatic relations between China and Brazil. Important as it is, the 50 years of Sino-Brazilian relations disguise the fact that Brazil had no diplomatic relations with China for no less than 25 years before 1974 due to ideological prejudice. The pragmatic approach adopted by both sides led to the resumption of formal diplomatic relations, following the thaw in Sino-US relations.
In the five decades since the establishment of formal diplomatic ties, trade and investment between the two sides have surpassed every forecast. The most well-known and frequently mentioned fact is that China has been Brazil's largest trade partner for 15 consecutive years, be it as a destination for Brazilian products or as a source of Brazilian imports. China has contributed for several years to Brazil's trade surplus.
With a limited amount of arable land and inadequate water sources, coupled with rapid urbanization and rising wages, China may increasingly rely on imports of food and raw materials, even though it has the capacity to ensure its own food security. Also, to fuel its GDP growth, even at a slower pace than before, China will require raw materials, minerals in particular. That is good news for Brazilian exporters.
Yet the growing concern among Brazilians over their country's possible "overdependence" on China has prompted the country's authorities to diversify the export structure. The importance of Sino-Brazilian economic ties goes beyond the trade in goods, though. Chinese entities have invested more than $70 billion in Brazil, with about three-fourths of the amount going to the energy sector. Of late, Chinese automobile manufacturers have also become active as investors in Brazil.
The other important dimension of Sino-Brazilian economic relations is the technological partnership. Among other things, Brazil and China have jointly built a series of satellites, an important tool for providing information on the weather.
Furthermore, China has provided a good deal of resources for Brazil via loans. For instance, during Brazilian vice-president Geraldo Alckmin's recent visit to China to attend the COSBAN (High-Level Sino-Brazilian Commission on Consultation and Cooperation) meeting, China promised to provide Brazil with a $1.3 billion loan from the China Development Bank to Brazil's National Development Bank and Banco do Brasil, and a $500 million loan from the Export-Import Bank of China to the Banco do Brasil. During the visit, the two sides also agreed to revive the China-Brazil Fund, established in 2015 but not yet operational.
China's 14th Five-Year Plan (2021-25) emphasizes that the efforts made to realize a number of goals might contribute to strengthening cooperation between the two sides in sectors such as healthcare and biotechnology — these two sectors have high development and growth potential.
Brazil, on its part, has shown renewed interest in overcoming infrastructure constraints on its borders and getting access to the Pacific coast of South America. And it is expected that Chinese investors might contribute significantly to these ventures, by initiating good, technically sound projects.
This is not to say Sino-Brazilian relations are free of challenges. Among the challenges the two sides have to overcome are the strategic use of non-tariff measures by the two countries, the discrepancies between the tariff levels of China and Brazil — which hurts Brazilian exports — Brazil's resistance to formally join the Belt and Road Initiative, and China's trade disputes with big Western economies which impact Brazilian productivity, among others.
Since the two countries are also founding members of BRICS, they can count on a mechanism other than COSBAN and international forums to achieve common goals. As a matter of fact, BRICS is being increasingly seen as a multilateral platform that can help improve global governance.
In today's rapidly changing world where global institutional architecture is being challenged from different angles, there is an urgent need to set clear development and partnership goals. This does not mean that countries should opt out of the partnerships they have with other countries in order to establish a partnership with another country. But a new path of equilibrium must be developed, so as to accommodate new, determining factors and new players. Hopefully, deeper economic and trade relations between Brazil and China will help the Brazilian government to better integrate the country's economy with the global economy.
The author is coordinator, External Economic Relations at IPEA, Institute of Applied Economic Research, Brazil. The views don't necessarily reflect those of the IPEA or China Daily.
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