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It looked like an easy win for Xi Jinping in the superpower battle for global influence.
The Chinese leader played host to three Latin American presidents and a gaggle of foreign ministers at a regional summit in Beijing last week. Trade between China and Latin America exceeded $500bn last year, Xi noted in his speech, a 40-fold increase in 25 years.
Then he took a swipe at US President Donald Trump: “There are no winners in tariff wars or trade wars. Bullying or hegemonism only leads to self-isolation.”
Brazilian President Luiz Inácio Lula da Silva, Xi’s star guest, was on message regarding his appreciation and “affection” for China. In tow were a clutch of cabinet ministers who joined the state visit on top of the Latin America-China meeting. About 20 different Sino-Brazilian co-operation agreements were signed, along with about R$27bn ($4.8bn) of planned investments.
Across the ocean, Brazil’s private sector elite and a group of powerful state governors were courting another superpower. In New York for an annual set of business and bank conferences dubbed “Brazil Week”, executives and politicians played down suggestions that the Trump presidency had fundamentally changed the strong business relationship between the two giants of the Americas.
“Brazilian industry is here because it understands perfectly the importance of partnership with the US,” said the president of Brazil’s industry confederation, Ricardo Alban. “We go back more than 200 years together and we will never belittle that history.”
Although Brazil’s chief executives and bankers dislike Trump’s tariffs on steel and aluminium (both Brazilian exports), they are less bothered by his politics. Many of them voted for Jair Bolsonaro, the former Brazilian president known as the “Tropical Trump”.
They are more worried about the profligacy of Lula’s government, which is running an overall deficit of nearly 8 per cent of GDP, forcing up interest rates, weakening the real and deterring often short-term US investors.
“Brazil is more culturally aligned with the US and closer to US values. But Brazilian business people increasingly realise that if they want long-term investment they have more possible partners in China, the Middle East or Singapore than in the US,” said Marcos Troyjo, a former president of the New Development Bank.
But US money still matters. While many executives from Brazil’s booming agribusiness sector were glad-handing Chinese officials with Lula, the chief executive and the billionaire owners of the world’s biggest meat producer, Brazil’s JBS, chose to go to New York, perhaps with an eye on the company’s impending US stock market listing.
Dario Durigan, Brazil’s deputy finance minister, was also in New York and keen to underline that his country was not picking sides. “In a world with a lot of volatility and where people are very unsure [about the future], Brazil is positioning itself as a safe harbour,” he argued.
The relationship between two of the Brics’ founder members is less unequal than some might suppose. Brazil is one of the few nations to run a large trade surplus with China and its dominance of global commodity exports gives it some strong cards.
Brazil supplies nearly 60 per cent of the world’s soyabean exports, while China, the world’s top soyabean importer, has few options for diversifying supplies. (The US is the second-biggest exporter and number three, Paraguay, recognises Taiwan instead of Beijing.) The story is similar with meat, where Brazil also leads exports and China is the top importer.
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Despite the warm words in Beijing, Brazil has not signed up to China’s Belt and Road infrastructure initiative and no big new construction projects were announced during Lula’s visit.
Marcos Caramuru, a former ambassador to China, said Lula’s visit was successful in consolidating political dialogue and a personal friendship with Xi, despite the lack of new joint infrastructure projects.
“Brazil was pointing in both directions last week and seems to be operating well,” he said of the delegations to Beijing and New York. “In China you need the government to make things happen, while in the US you work with the private sector and you don’t need the government.”
Tellingly, Lula’s speech to the China-Latin America forum ended not with a paean to Xi, but a plea for Latin America to unite and forge its own future. If that happens, Brazil, rather than China, may be the winner of last week’s meeting.
michael.stott@ft.com
