Lula’s state visit to Beijing reveals Brazil’s foreign policy balancing act

Brazilian president Luiz Inacio Lula da Silva will meet with Chinese leader Xi Jinping in Beijing on Friday (April 14), as part of an official state visit to China where the two leaders will discuss climate change, the conflict in Ukraine, and a range of other topics.

Ahead of the meeting, Lula told Brazilian media that China was “an essential partner today for Brazil and for Latin America.”

The two leaders are expected to sign 20 bilateral trade agreements, demonstrating Brazil’s desire to cultivate strong economic ties with China despite the risk of alienating the United States, which has imposed diplomatic and economic sanctions on the Asian nation.

Just two months earlier, Lula visited Washington DC, where he met with president Joe Biden and said that he was looking to “kickstart a new era of relations” with the US.

China is Brazil’s largest global export market, reaching roughly $80.7 billion last year, mainly soybeans, cotton, and crude oil.

Conversely, Brazil is the biggest recipient of Chinese foreign investment in South America—including a subway line in Sao Paolo and a satellite that will monitor deforestation in the Amazon—evidence of how closely the two countries are intertwined.

However, international relations were strained under Lula’s predecessor Jair Bolsonaro, especially during the covid-19 pandemic, after the former president’s son Eduardo Bolsonaro, also a Brazilian lawmaker, blamed the virus on the Chinese government.

The Chinese called the accusation “an evil insult” against China and the Chinese people.

Lula visits Huawei, likely provoking the US

Ahead of his meeting with Xi, Lula visited the Huawei innovation center in Shanghai on Thursday (April 13), where he was shown a presentation on 5G network connectivity, as well as other technological advancements by the Chinese firm. Afterward, Lula tweeted that the company is making a “very strong investment in research and innovation.”

The visit comes as the US, as well as other Western allies, have dubbed Huwaei a security risk, banning the telecommunications giant from doing business with domestic companies and restricting its chip manufacturing and 5G networks. These sanctions led to Huawei’s largest ever annual profit decline last year.

Quotable: Limits to foreign ownership in Brazil

“I want the Chinese to understand that their investment here will be wonderfully welcome, but not to buy our companies. To build new things, which we need.” — Lula said ahead of his trip to China, looking to mend fences with Chinese companies after Bolsonaro’s rhetoric.

Lula calls for a BRICS currency alternative to the dollar

Lula also made headlines during the trip when he called for an alternative currency to the dollar for trade relations between his country and China, saying the informal economic alliance of non-Western industrialized nations like Brazil, Russia, India, China, and South Africa (BRICS) should forge even closer economic ties

“Why can’t an institution like the BRICS bank have a currency to finance trade relations between Brazil and China, between Brazil and all the other BRICS countries?” Lula said while visiting the Shanghai-based New Development Bank, which is the official name for the financial institution he was referring to. “Who decided that the dollar was the (trade) currency after the end of gold parity?”

While they are not an official intergovernmental organization, the governments of BRICS nations meet annually at summits, where they coordinate investments and multilateral policies, and have publicly considered an alternative currency. BRICS is considered a rival of the economic G7 group, led by the US, Japan, and countries in Western Europe.

Russia’s continued inclusion in this economic alliance, despite the country’s illegal invasion of Ukraine, has left the other members in a difficult spot. Notably, Lula has been condemned by the Ukrainian government for suggesting that Ukraine let Russia annex Crimea in order to end the conflict.

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