Friday’s meeting between Chinese President Xi Jinping and Brazilian President Luiz Inacio Lula da Silva in Beijing saw both leaders praising the strength of their nations’ ties. The summit takes place at a time when Xi has portrayed China as the head of a global system free from American influence.
According to Chinese official media, Lula told Xi that “our relationship with China is extraordinary and it has grown more solid and mature over time.” “We hope that the relationship between China and Brazil may extend beyond trade. Nobody can prevent Brazil from deepening its relations with China.
Lula’s meeting with Xi comes after a string of recent visits to China by other international leaders, including those of France, Spain, Singapore, and Malaysia. Xi also recently met in Moscow with the president of Belarus, Alexander Lukashenko, a strong supporter of Russian President Vladimir Putin.
China has recently engaged in a flurry of high-level diplomacy as Xi presents China as a diplomatic power broker, putting up a plan to end Russia’s war in Ukraine and serving as a mediator for a reconciliation between Saudi Arabia and Iran.
On Friday, Annalena Baerbock, the foreign minister of Germany, also visited Beijing. She stated during a meeting with the Chinese Foreign Minister Qin Gang that any military buildup in the Taiwan Strait would be seen in Europe as “a horror scenario” with “inevitable repercussions.”
Many in Europe felt the position needed to be reiterated after French President Emmanuel Macron sparked controversy by appearing to support China’s approach to Taiwan, which Beijing has never ruled but claims as part of its territory, during his own trip to the Chinese capital this month.
Lula, who has had a close relationship with the leaders of China for almost two decades, was welcomed by Xi on Friday by rolling out the red carpet. Xi gave a rare smile as the two inspected the military in Tiananmen Square, which was decorated with Brazilian flags.
The trip, which marks Lula’s third state visit to China, shows that the two countries’ strained ties have improved since Jair Bolsonaro, Lula’s predecessor, enraged Beijing.
According to Chinese official media, Xi called Lula “an old friend of the Chinese people” and declared that China viewed relations with Brazil as a “diplomatic priority.”
According to a joint statement released by Chinese state media, during the meeting between Lula and Xi, the two sides signed agreements on science and technology cooperation, including the extension of an ongoing satellite project, and on customs inspections for animal products. They also decided to increase trade in their respective currencies. The statement said that China supports Brazil’s desire to play a bigger role at the UN, where Lula has pushed for Brazil to obtain a permanent seat on the Security Council, and that Brazil welcomed Xi’s 12-point plan to cease hostilities in Ukraine.
The trip, which marks Lula’s third state visit to China, shows that the two countries’ strained ties have improved since Jair Bolsonaro, Lula’s predecessor, enraged Beijing.
According to Chinese official media, Xi called Lula “an old friend of the Chinese people” and declared that China viewed relations with Brazil as a “diplomatic priority.”
According to a joint statement released by Chinese state media, during the meeting between Lula and Xi, the two sides signed agreements on science and technology cooperation, including the extension of an ongoing satellite project, and on customs inspections for animal products. They also decided to increase trade in their respective currencies. The statement said that China supports Brazil’s desire to play a bigger role at the UN, where Lula has pushed for Brazil to obtain a permanent seat on the Security Council, and that Brazil welcomed Xi’s 12-point plan to cease hostilities in Ukraine.
Wider adoption of the Chinese yuan is likely to increase the currency’s appeal to other nations seeking to protect themselves against the sway of the US dollar as well as those maintaining trade with Russia, which is currently largely conducted in US dollars in light of American sanctions on Moscow over its involvement in the conflict in Ukraine.
According to Cui Shoujun, the director of the Center for Latin American Studies at Renmin University of China, the decision by China and Brazil to allow their businesses to transact in each other’s currencies may inspire Brazil’s neighbors to do the same. He called it “a big breakthrough.”
Cui stated that if a portion of that volume was settled in yuan, it might have a demonstrative effect and persuade more Latin American nations to trade with the Chinese currency.
China is Brazil’s biggest trading partner, as well as Chile and Peru. Chinese customs figures show that two-way trade between China and Latin America increased to $486 billion last year, more than 40 times the amount in 2000.
When the US hiked interest rates in the 1980s, many Central and South American nations with debt denominated in dollars had a crisis. According to experts, this experience encouraged nations to diversify their economies away from such a strong reliance on the dollar, which coincided with a steady rise in the region’s commerce with China.
There are overlaps with Russia as well, another nation that seeks to establish a rival to the American-led international system. Russian fertilizer, which supports Brazil’s agricultural industry, was a major factor in the bilateral trade between Russia and Brazil reaching historic highs last year. Brazil sells a lion’s share of its agricultural products to China, especially soybeans and beef. At the same time, due to American sanctions on Russian economic activities, Russia is using the Chinese yuan more than before.
“In Latin America, we are seeing China acting as this alternative [to the U.S.], especially from a financing and investment perspective, and really reducing the efficacy of U.S. efforts to shift policy or political behavior in much of the region,” said Margaret Myers, director of the Asia and Latin America program at the Inter-American Dialogue in Washington.
Beijing has praised the expansion of its business ties with Brazil. Chinese Foreign Minister Wang Yi stated that with stronger ties, China would help “promote the change of the global governance system” after meeting with Lula adviser Celso Amorim.
According to Karin Costa Vazquez, a Brazilian researcher at the Center for BRICS Research Studies at Fudan University in Shanghai, Brazil sees China as a partner in accomplishing not only its economic goals but also its technological and environmental ones.
The shift to a low-carbon economy is one of the revolutions the nation must go through. Lula’s domestic program is prioritized around that, according to Costa Vazquez. China’s policies have been centered on technology, sustainability, and innovation; that is what China can provide.
Although Chinese and Brazilian businesses can choose to interact in yuan, there are numerous advantages to using the U.S. dollar, which is still the most common currency in the world.
According to Daniel McDowell, an associate professor of political science at Syracuse University, “when China and Brazil sign an agreement like this, it’s trying to put in place the infrastructure that would make it possible to use China’s currency, but that doesn’t mean that individual firms are going to choose that.”
Lula observed the installation of his successor Dilma Rousseff as the new head of the BRICS New Development Bank on Thursday at its offices in Shanghai, which China and Brazil established in 2015 as a rival to the International Monetary Fund.
Lula claimed in a speech at the bank that he had long pondered why continued reliance on the US dollar.
“Why is it that we can’t use our own currencies?” Lula enquired. “I am aware that you are all accustomed to utilizing US money. But we can try something else in the twenty-first century.