Xi Jinping closes G20 summit, state visit to Brazil amid growing US-China competition

As the world's two largest economies vie for influence in South America, Brazil finds itself at the heart of the struggle for global power. The choices the country makes in the coming years could reshape the region's economic and political trajectory, analysts say.

Chinese President Xi Jinping's recent visit to Brazil for a state visit and the G20 summit marked the 50th anniversary of diplomatic relations between the two countries and highlighted Beijing's growing influence in South America amid intensification of competition between the United States and China.

Xi's visit resulted in the conclusion of 37 trade and diplomatic agreements with Brazilian President Luiz Incio Lula da Silva. The agreements covered agriculture, renewable energy and infrastructure development, signaling a closer partnership between the world's second-largest economy and Latin America's largest country.

Brazil has the largest Chinese investment in the South. There is a lot of Chinese money here, said Mauricio Santoro, a political scientist and international relations expert and author of Brazil-China relations in the 21st centuryin an interview with VOA.

And the Chinese and Brazilians are very supportive of the development of green technologies, wind and solar energy. So there is huge potential there.

During the visit, Xi and Lula discussed strengthening economic cooperation between China and Brazil, as well as solving key global issues, including trade, sustainable development and geopolitical challenges. Despite the large number of agreements, experts suggest that many of them were largely symbolic, focusing on reaffirming commitments rather than implementing concrete policies.

Signing 37 deals is huge. It's likely they won't have practical effects in the short term, Livio Ribeiro, an expert on Sino-Brazilian trade, told VOA. Most of them are very broad and not very specific. However, ties are becoming closer. They become stronger. I think that's the point.

China's growing influence

China has emerged as Brazil's largest trading partner, with bilateral trade valued at nearly $160 billion in 2023. Trade between the two countries grew nearly 10% in the first 10 months of 2024, China's official Xinhua news agency reported. Over the past decade, Chinese investments in Brazil, particularly in the energy and infrastructure sectors, have increased.

As China strengthens its footprint in South America, the United States has emphasized soft power strategies, particularly in the fight against climate change, a central part of Lulas' international agenda. The Biden administration increased its climate funding to $11 billion per year and contributed $50 million to the Brazilian Amazon Fund.

However, analysts say China's rise poses challenges to U.S. influence in South America. Bilateral monetary agreements between Beijing and countries like Brazil and Chile allow trade in China's currency, the renminbi, gradually undermining the dollar's dominance in the region.

Most US administrations view Latin America as a problem. As a source of instability, unwanted immigration, organized crime, border unrest, etc., Santoro said. But when China turns to Latin America, it mainly sees opportunities.

The Trump factor

The new Trump administration could change the dynamics of U.S.-China competition in the region, and Trump's proposals, including a possible sweeping tariff on Chinese imports, could alienate South American countries and bring them closer to Beijing, according to experts.

With Trump taking office in January 2025, the balance of power will shift, Ribeiro told VOA. And for me, the big question is whether Trump, knowing and understanding that he is losing Latin America, is going to try to win it back or whether he is just going to let it go.

He said higher interest rates in the United States and a stronger dollar could exacerbate economic challenges in South America, devaluing local currencies and increasing borrowing costs. Such volatility could make Chinese partnerships more attractive.

Chinese officials “do not believe that Trump will be able to establish good relations with the leaders of these countries,” Santoro said.

The balance of Brazil

President Lula has maintained a cautious approach, strengthening ties with China without alienating the United States. Its decision not to join China's global infrastructure project, the Belt and Road Initiative (BRI), reflects a strategy to preserve Brazil's diplomatic flexibility, experts said.

This is precisely how Brazil should handle the situation, Ribeiro told VOA. Because he [Lula] did not sign the Belt and Road Initiative. So the United States cannot say that we are moving towards the opposition.

Analysts note that Brazil can potentially still benefit from the BRI project, for example through a Brazil-Peru transcontinental railway project that remains in the planning stage while balancing diplomacy between global rivals, analysts say.

We exchange more and more [with China]. We use the infrastructure. We receive Chinese money. So the integration that comes with the Belt and Road is reaching us, Ribeiro said.

Some experts see opportunities for Brazil in the rivalry between the United States and China.

If China suffers economically from the imposition of US tariffs, it could very likely strike a deal with Brazil to bring that trade to us, using our established trade partnership, Brazilian writer Sergio Farias said in an interview with at VOA.

I think there is a good chance that Brazil will benefit from this.