Since August, I’m Director of the Brazilian International Relations Research Institute, supposedly a think tank for Itamaraty, today much more a tank than a think. Let’s assume, then, that we are capable of doing some free think work, as we do not have financial resources of our own, or a proper research staff to fill the tank side of this dependent body of the Alexandre de Gusmão Foundation.
Alexandre de Gusmão is said to be the grand-father of the Brazilian diplomacy, as the role of father is reserved to our Grand Priest, Baron of Rio Branco, for once minister in Berlin, before being the most famous Brazilian diplomat, the sole to be reproduced in at least six of our last eight currencies throughout the 20th century. Gusmão, a Brazilian diplomat on behalf of the Portuguese crown, negotiated the 1750 partition of South America between Spain and Portugal, redrawing the geopolitical map of the region and in fact abolishing the famous Tordesillas treaty (1494), a kind of Yalta partition of the world at the dawn of modern era.
Being currently outside the Ministry of Foreign Affairs, I cannot pretend to speak on behalf of this respectable, traditional and very old institution, older than the corresponding bodies of Germany, India and South Africa. As I cannot speak for the Ministry, and as I cannot either redraw any geopolitical map for today’s international relations of Brazil, I’ll speak for myself, trying to express personal views about, not exactly China’s role in the world, but Brazil’s stance towards the new giant of the 21st geopolitical scenario. I will try to correct some misperceptions, among our friends from abroad, about Brazil’s stance in relation to the new kids in the block, that is, IBSA and BRICS, the innovations of the 2000s, and about Brazil’s recent partisan diplomacy.
What is important to perceive, at the start, and I stress this for our guests, is that we have to make a very clear distinction between Brazilian traditional, and professional, diplomacy, and that other “diplomacy”, the one that was publicized and practiced by the Worker’s Party governments, both under Lula and Dilma, a diplomacy that was based much more on ideological choices than well reflected decisions, a foreign policy that pursued old beliefs based on a North-South divide, and on an delusional and futile attempt to unite “non-hegemonic” countries in the restructuring of global relations.
Putting aside those born-dead attempts to create a “new geography of world’s trade”, let’s return to a more real scenario. Brazil’s relationship with China is basically of an economic nature, and more distinctively a commercial one. To be rude, this relationship is a very asymmetric one, similar, with some other features, to the colonial relationship that European imperialists maintained with peripheral countries a century ago: importing commodities, for the most, and exporting manufactures, some services and technological equipment. Brazil is not a big, not even a little player, in the great geopolitical game of Asia Pacific, and cannot pretend to play any significant role in this realm. Brazil is a non-entity in the great geopolitical game of the 21st century in the Asia Pacific region, and I do not pretend that it has to have one. To be honest, I put this completely aside: Asia geopolitics is not an issue for Brazil. What’s in there for us, then? Well, just geo-economics. More than presence, Brazil has feelings towards Asia, as well as mixed feelings towards China. Alert: they cannot be of a strategic nature.
Which kind of feelings that could be? It depends on the juncture, starting from the long story of non-relations up to the 1970s, now, the new relationship for the last forty years. During most of the Cold War, hostility was the prevalent attitude: Brazil, like most Latin American countries recognized only Republic of China, Taiwan. The reestablishment of relations, in 1974, was one of the sources for an attempted coup by the Army chief against his Army colleague, president general Ernesto Geisel, in 1977.
At that moment, Brazilians, coffee exporters ahead of them, were expecting that each Chinese could take a cup of the Brazilian brewery each day, an optimistic dream not yet fulfilled. During the next ten years, political relations were at a low stage, but since re-democratization in Brazil and China’s transition to capitalism economic linkages started to grow. President Sarney signed a technological cooperation agreement in 1988, which opened the way for a common program for the launching of Brazilian satellites by Chinese rockets. During the 1990s, trade flows became impressive, and at the end of that decade China surpassed many other traditional partners, up to become Brazil’s first trade partner in 2009, taking the century long position held by the United States (although not in financial and technological linkages).
Very quickly the imbalances revealed a pattern that Brazil held with other developed countries, and traditional partners, a century ago: that of a commodity exporter and a manufacture importer, very high in the figures of bilateral trade. Almost 95% of Brazilian exports is concentrated in a very few number of agricultural stuff and iron ore, and an equivalent amount of China sales in Brazil are what many other countries are importing from the Asian giant, well, everything that you can find in any Walmart of the world. This is not big strategy, just interdependence, however unequal.
Fernando Henrique Cardoso (1995-2002) recognized the growing importance of China for the economic future of Brazil and for the political future of the world, but did not fell in the kind of idyllic admiration that Lula devoted to China during most of his tenure (2003-2010). Presidential visits started already under Cardoso government, but it was Lula who elevated the bilateral relationship to a high level of unilateral friendship and a completely misguided conception of that relationship. This is not surprising, as the two Lula governments, and the one and half by his successor, Dilma Rousseff, represented a whole deformation of Brazil’s external policy, and an unhappy moment for its professional diplomacy, starting by the replacement of a traditionally prudent foreign policy for a highly partisan, schizophrenically leftist diplomacy.
When he was just a candidate, Lula visited China, in 2001, and was received almost as a head of State, and took that as a signal that the Chinese were betting highly on him and on Brazil, when the Chinese were obviously building up new opportunities for their exporters, and looking for political returns for their country, in every aspect of their international relations. Again, there is nothing strategic in this, just pragmatism.
Lula’s foreign policy was not only schizophrenic, but also really detrimental to Brazil’s interests in terms of regional diplomacy and the so-called “special strategic relationships”. First of all, those “strategic partnerships” were defined unilaterally, a priori of any independent evaluation of their substantive value for Brazil, just as a result of an ideological pre-determination of a leftist party, the Worker’s Party, who favored this kind of alliances with supposedly anti-hegemonic allies. This was the origin of the IBSA group, as well as the more ambitious BRICS coordinating forum, now a full diplomatic endeavor, with a bank and probably much more in the future.
I will not develop the many characteristics of Lula’s diplomatic schizophrenia, the megalomaniac aspects of his excitement with the perspective of becoming a world’s great leader, which he became indeed. I do not need to explain my skepticism towards his preferred alliances, artificial relationships, based on an illusory adherence to a so-called South-South diplomacy. The pre-defined option for those arrangements was the Great Illusion of Lula’s diplomacy. It could also be interpreted as a delusional and a very mistaken notion that China, Russia, and the other partners would be ready to support Brazil in its search for a greater role in world scenarios. But, let me concentrate on the asymmetrical nature of Brazil-China relationship.
Not only Lula and his fellow militants of the Worker’s Party, but many Brazilian political leaders maintain great misconceptions about China’s posture towards Brazil, even if those impressions have evolved along the dynamic strengthening of the trade and economic relationship since the 1990s. Previous political leaders were aware of the great possibilities of those linkages, but it was Lula who started a mistaken perception of a great political alliance between China and Brazil. At his very first visit to China, in 2003, he promised to recognize China as a market economy, and even suggested a kind of a free trade agreement between Mercosur and China, as well as bilateral payments not in hard currency, but with the respective national currencies. He was deceived by the lack of big Chinese investments in Brazil and the growing imbalances in the nature of the bilateral trade, a feature that keep expanding since then. Nowadays, the more moderate government of Michel Temer returned to a cautious view of this relationship, but also betting on a high tide of Chinese investments in Brazil’s fragile economy.
Even if current Brazilian diplomacy dismiss the deceptive illusions under which operated Lula’s partisan diplomacy towards China, there is no chances that a balanced relationship can be established in the foreseeable future. China is growing very rapidly in the value aggregation scale, coming from the mere copy and reverse engineering and going towards technological innovation, already arriving at design and trademarks. Brazil is far behind that way, and in fact experiencing a retrocession in its manufacture exports, which declined dramatically during Lula years in power (the reasons for that being much more of an internal nature than the result of an international crisis, of an “exchange war”, or a Chinese unfair competition). Chinese catch-up with advanced countries point to be even more impressive that those of Japan and Korea, and there will be nothing comparable in the world economic history.
With all that, China will act exactly as have done, in the past and nowadays, other advanced and dominant centers of the world economy: by organizing its own periphery for the provision of basic stuff and raw materials. China will not perform in the same manner as former imperialisms, by an extractive behavior, at least not in its relation with Brazil. Some in Brazil – including in the government – fear that, and the Parliament has already approved new restrictions on land acquisition by foreigners, that is, Chinese agricultural companies. But China will “colonize” Brazil through financial and trade networks controlled by its big State companies and other giant private enterprises. China sees Brazil as its big food provider, both human and animal, and other commodities for its gigantic industrial machine. Conversely, China is already the biggest provider of all kinds of gadgets and a crescent variety of equipment to Brazil.
This is already a reality, and is being reinforced not only in Brazil, but also in each and every country in South America, that is, the traditional clients of Brazil and Argentina, the two biggest members of Mercosur. In fact, the Chinese demand was a big bonanza during Lula years: soya beans were at 600 dollars in their price peak, and iron ore reached almost 200 dollars a ton (now it is lower than 40 dollars, but agricultural goods remain high in the commodities markets). Those huge inflows of dollars allowed Lula to bet on an expanding State expenditure, both in social disbursements for the poor and premium subsidies for the rich people; the latter were the greater part of an unequal distribution of this extra cash, incidentally mixed with very high doses of corruption.
It’s a fact that Brazil will never have a balanced relationship in the industrial exchanges or the overall trade exchanges, and has already lagged behind China in the run from the third to the fourth industrial revolution: Brazil will be beaten, like most of similar countries with the same level of development. Brazilian industries, if they expect to survive, will have to behave like any other companies in a comparable situation: keep the design and marketing position, and order the manufacturing to be made in China. That’s the only way: keep the engineers, fire the workers. The more rapidly this evolution is accepted, the higher the rate of survival of those industries. This is the new Darwinist world, a non-natural selection, Chinese way.
Some rent can be generated in joint ventures between Brazilian and Chinese companies, especially in the sectors presenting high comparative advantages for Brazil, such as intensive natural resources goods, renewable energy, but also fossil fuel, which are at the core of Brazil’s Ricardian vocation. But Brazil cannot expect any strategic plan being offered by China: the Asian giant will do what its leaders define as the national interests of China, not any joint endeavor with Brazil, besides some gentle words and even a few big agreements in sectors chosen exclusively by China. Those dreams of a big “strategic alliance” come only from Brazil: if China agrees, it is because it serves its national interests, not joint projects with any other countries.
Incidentally, the concession of a status of a “market economy” by Brazil in favor of China will not change anything in this relationship, or the general nature of China’s role in the world and its penetration in South America. The measure renders more difficult the life of São Paulo industries, but this is to be expected anyway, in the short or in the medium term. China has to acquire this status and assume in full its role as a “serial killer” in the industrial markets, including in Brazil.
Perhaps – and I really expect that – this Chinese challenge will help Brazilian industrialists to finally direct their guns against the national State, the real culprit of their grievances, the true offender and perpetrator of all their ailments, the very responsible for a unreasonable tax system that is killing every company in Brazil, a country very highly (and badly) ranked in the World Bank’s Doing Business. Perhaps this is a favor that China will indirectly provoke for the salvation of Brazil’s economy. As we say in Brazil, there are evils that come for the good.
Paulo Roberto de Almeida é Doutor em Ciências Sociais (Université Libre de Bruxelles, 1984), Mestre em Planejamento Econômico (Universidade de Antuérpia, 1977), diplomata de carreira desde 1977. Foi professor no Instituto Rio Branco e na Universidade de Brasília, diretor do Instituto Brasileiro de Relações Internacionais (IPRI) e, desde 2004, é professor de Economia Política no Programa de Pós-Graduação (Mestrado e Doutorado) em Direito no Centro Universitário de Brasília (Uniceub). É editor adjunto da Revista Brasileira de Política Internacional e participa dos comitês editoriais de diversas publicações acadêmicas. Atual Diretor do Instituto de Pesquisa de Relações Internacionais, Funag-MRE (2016).
Mundorama. "China’s pivot, Brazil’s stance: a personal view, by Paulo Roberto de Almeida". Mundorama - Revista de Divulgação Científica em Relações Internacionais, [acessado em 24/09/2016]. Disponível em: <http://www.mundorama.net/2016/09/24/chinas-pivot-brazils-stance-a-personal-view-by-paulo-roberto-de-almeida/>.