Brazilian Lula visits Beijing, meets China’s Xi Jinping to strengthen ties

Our relationship with China is extraordinary, and it has become more mature and stronger over time, Lula told Xi, according to Chinese state media. We hope Brazil-China relations can go beyond trade. No one can prevent Brazil from continuing to develop its relations with China.

Lulas’ meeting with Xi follows a parade of recent visits by other world leaders to China, including the leaders of France, Spain, Singapore and Malaysia, as well as Belarusian President Alexander Lukashenko, a close ally of Russian President Vladimir Putin. whom Xi met late. last month in Moscow.

China’s flurry of high-level diplomacy comes as Xi positions China as a diplomatic power broker, proposing a proposal to end Russia’s war in Ukraine and facilitating a rapprochement between Saudi Arabia and the ‘Iran.

German Foreign Minister Annalena Baerbock was also in Beijing on Friday. During her meeting with Chinese Foreign Minister Qin Gang, she said Europe would view any military escalation in the Taiwan Strait as a horror scenario with inevitable repercussions.

It was a position many in Europe felt needed to be reaffirmed after French President Emmanuel Macron raised eyebrows when he appeared to approve of China’s approach to the island of Taiwan which Beijing has never ruled but claims as part of its territory during its own trip to China. capital this month.

Xi rolled out the red carpet on Friday to welcome Lula, who has enjoyed a close relationship with Chinese leaders for nearly two decades. As the two troops paraded Tiananmen Square, which was lined with Brazilian flags, Xi flashed a rare smile.

The trip, Lulas’s third state visit to China, signals a mending of relations after a tense period under Lulas’ predecessor, Jair Bolsonaro, which antagonized Beijing.

Xi described Lula as an old friend of the Chinese people and, according to Chinese state media, said China considers its relations with Brazil a diplomatic priority.

During the meeting between Lula and Xi, the two sides signed agreements on science and technology cooperation, including the expansion of an ongoing satellite project, and customs inspections of animal products, and agreed to expand trade in their respective currencies, according to a joint statement released by Chinese state media. The statement also said that Brazil views positively Xi’s 12-point proposal to end hostilities in Ukraine and that China supports Brazil’s desire to play a greater role at the United Nations, where Lula has pleaded for the Brazil obtains a permanent seat on the Security Council.

Lula traveled with a large entourage of Brazilian government ministers and business executives, and he visited several of China’s leading companies. On Thursday, with the chairman of telecommunications giant Huawei by his side, Lula tried out a virtual reality headset at the Huawei Research Institute in Shanghai, then visited electric vehicle company BYD.

During Lulas’s first term as president, from 2003 to 2011, China went from doing little trade with Brazil to becoming its biggest trading partner. This week, Lula hailed recent moves to bring the two economies even closer together, including an agreement allowing the two to strike deals in their respective currencies.

The move gives Brazilian and Chinese companies the ability to bypass the U.S. dollar for transactions that make up their booming two-way trade, which topped $150 billion last year.

Wider use of the Chinese yuan will likely make the currency more attractive to other countries looking to hedge against fluctuations in the US dollar, as well as those maintaining trade with Russia, mostly in US dollars, in the face of US sanctions against Moscow for its war in Ukraine.

China and Brazil’s move to allow their companies to swap each other’s currencies could encourage Brazil’s neighbors to follow suit, said Cui Shoujun, director of the University’s Center for Latin American Studies. Renmin from China, calling it a big breakthrough.

If some of that volume was settled in yuan, it could create a demonstration effect and encourage more Latin American countries to trade in the Chinese currency, Cui said.

China is the largest trading partner not only of Brazil, but also of Chile and Peru. Last year, China’s two-way trade with Latin America reached $486 billion, more than 40 times the level in 2000, according to data from China Customs.

The West hoped Lula would be a partner. He has his own plans.

Many Central and South American countries holding US dollar-denominated debt faced a crisis in the 1980s when the United States raised interest rates. Experts say this experience has motivated countries to move away from such dependence on the dollar and that this diversification has been accompanied by a steady increase in the region’s trade with China.

There are also synergies with Russia, another country that shares the desire to create an alternative to the US-led world order. Bilateral trade between Russia and Brazil hit record highs last year, mainly thanks to Russian fertilizers, which support Brazil’s agricultural sector. Brazil’s agricultural products, primarily soybeans and beef, make up the vast majority of the country’s exports to China. At the same time, Russia is using the Chinese yuan more than ever amid US sanctions against Russian economic activity.

In Latin America, we see China acting as that alternative [to the U.S.]particularly from a funding and investment perspective, and actually reducing the effectiveness of U.S. efforts to change policy or political behavior in much of the region, said Margaret Myers, director of the Asia and Americas program. of the Washington think tank, the American Inter-Dialogue.

Beijing hailed its deepening economic cooperation with Brazil. After meeting Lula’s adviser Celso Amorim, Chinese Foreign Minister Wang Yi said that with closer ties, China will help promote change in the global governance system.

Brazil sees China as a partner not only to achieve its economic goals, but also to achieve its technological and environmental goals, said Karin Costa Vazquez, a Brazilian researcher at the BRICS Center for Research Studies at Fudan University in Shanghai.

One of the transformations the country must go through is the transition to a low-carbon economy. It’s at the top of Lulas’ domestic agenda, Costa Vazquez said. Technology, sustainability and innovation have been at the heart of Chinese policies; that’s what China can provide.

By embracing Putin, Xi defies the US and exploits a global divide

Although Brazilian and Chinese companies have the option of transacting in yuan, there are many incentives to transact in US dollars, which remains the most widely used currency in the world.

When China and Brazil sign an agreement like this, they’re trying to put in place the infrastructure that would allow Chinese currency to be used, but that doesn’t mean individual companies are going to choose that, said Daniel McDowell, associate professor of political science. science at Syracuse University.

On Thursday at the Shanghai headquarters of the BRICS New Development Bank, which China and Brazil launched in 2015 to serve as an alternative to the International Monetary Fund, Lula saw his successor Dilma Rousseff inaugurated as head of the bank.

In a speech at the bank, Lula said he had long wondered why reliance on the US dollar persisted.

Why can’t we use our own currencies? Lula asked. I know you have all become accustomed to using US dollars. But in the 21st century, we can try something different.