May 22, 2019

Brazilian Vice President, Hamilton Mourão, was in China for a six-day trip ahead of President Jair Bolsonaro’s trip to the country later this year. The Atlantic Council’s Adrienne Arsht Latin America Center held a conference call just before the China–Brazil High-Level Cooperation and Commission (COSBAN) meeting to assess expectations and possible key outcomes to Brazil-China relations of the visit. The call was moderated by Pepe Zhang, associate director at the Adrienne Arsht Latin America Center.

Luiza Duarte, Asia correspondent at Globo News, who was in Beijing for the visit, kicked off the conversation by highlighting the relevance of the visit, particularly in the context of current trade wars. She stated that the visit flagged to the Chinese government and to investors that Brazil is open for business and to propositions of the Belt and Road Initiative.

On this regard, Ricardo Sennes, partner at Prospectiva Consulting and a nonresident senior fellow at the Adrienne Arsht Latin America Center, forecasted that Vice President Mourão’s visit served to cultivate the bilateral relation for future partnerships in areas such as agribusiness. For Larissa Wachholz, partner at Vallya and an expert on Brazil-China relations, Brazil must take a stance and be firm on its position to join the Belt and Road. She believes Brazil has nothing to lose from partnering with China.

Wachholz believes Brazil must take initiative and drive discussions toward Chinese investments and how they might help the country diversify its exports away from commodities and into infrastructure investment. She adds that Brazil must become more competitive to become more attractive to the Chinese market in comparison to other countries. Zhang added that “the conversation on the Belt and Road Initiative has happened on a broad, regional level. There is a need for more country-specific strategies.”

In the context of the BRICS, its development bank and the opening of its São Paulo branch, Duarte stated that things are not running as forecasted. She explains that there is still no set date for the development bank to open in São Paulo and the BRICS have not been a priority for President Bolsonaro, especially since the development bank focuses on green and blue projects – also not a priority for the federal government. Nonetheless, Sennes added that since financial crises freeze money for investment, the BRICS bank might be a good alternative, especially considering that funding from the US might not be constant, as Wachholz stated.

Having mentioned the role of the United States, Wachholz highlighted “Brazil has been one of the few developing countries that has sustained a good relationship with all major economies in the world: the US, China, and the European Union. We should continue this position in the future.” She believes that despite the change in rhetoric from President Bolsonaro’s administration toward China, there have been no substantial changes in Brazil’s relationship with either the US or China and thus no need to choose to partner with one or the other. For Sennes, “barriers in US-Brazil trade and investment relationship are largely concentrated in specific sectors. There are sensitive issues, but in general the tenor of the relationship is positive.” With regards to the trade relation with China, he considers it to be more balanced, yet believes Brazil could expand its currently limited export portfolio. Agreeing, Wachholz defended that Brazil could become a better negotiator and clearly communicate its desire of diversifying exports since China heavily relies on Brazil for food security. Duarte mentions that “there is an increasing movement of Brazilian states to conduct business with China on their own. A key emerging dynamic to watch in Brazil-China relationship.”

The conversation concluded with a brief discussion on the Chinese company Huawei. Duarte stated that Vice President Mourão was evasive when asked to address Brazil’s position towards recent allegations against the telecom company. Nonetheless, she stated that the government has hosted Huawei representatives and has always spoken favorably about the company. She believes it is too soon for the Brazilian government to choose a side. Wachholz added that Huawei’s operations in Brazil have always complied with Brazilian law, defending that the upcoming public bid for 5G in the country should welcome all companies compliant with Brazil’s requirements.

Overall, Vice President Mourão’s trip to China was a positive one. His visit re-launched COSBAN, setting the stage for greater cooperation between Brazil and China and a successful visit later this year by President Jair Bolsonaro.