by Jiang Shixue
Brazil is the largest developing country in the Western Hemisphere, and China is the largest developing country in the world. The bilateral ties between them could have an impact upon the South-South relations and the emerging new world order. The two countries announced the formation of a Strategic Partnership as early as 1993. As a matter of fact, Brazil was the first country to have a strategic partnership with China. Since then, relations between the two countries have been developing rapidly, covering almost all areas.
However, there are eight myths surrounding the China-Brazil relations: there is a brewing tension between China and Brazil that people don’t fully appreciate; China only wants to import raw materials from Brazil and does not wish to make direct investment there; China’s imports of Brazil’s raw materials have made it hard for the South American nation to escape the “Dutch Disease” or the so-called trap of “resource cursing”; the value of the Renminbi (RMB), the Chinese currency, is kept too low, thus putting Brazil in an unfavorable position to compete with China; Brazilian manufacturers are getting killed by cheap Chinese imports that make Brazil’s industry uncompetitive in the global marketplace and at home; China’s market is not widely open to Brazil; China does not support Brazil’s effort to become a permanent member of the United Nations Security Council; and, China and Brazil are scrambling for Africa. Apparently, in order to further promote the China-Brazil relations, the above-mentioned myths must be defused.
From Tea Growers to Strategic Partners
China’s relations with Brazil could be dated back to the early 19th century when several hundred tea growers from China were trans-ferred as laborers to Brazil via Macao. In the mid-19th century, Brazil was eager to import more Chinese laborers so as to make up for the shortage of labor after slave emancipation in Brazil, and offered to establish diplomatic relations with China, which was under Qing rule at the time. In 1880, China and Brazil signed a treaty of friendship stipulating the immediate establishment of diplomatic relations and the free flow of people and goods.
The People’s Republic of China (PRC) was founded in 1949. Cuba was the first country in Western Hemisphere to recognize it in 1960. At that time, the sphere of influence of the United States in Latin America was enormous. Consequently, it was not realistic to hope that Brazil would develop relations with the Asian communist nation.
But in August 1961, Brazilian President Quadros sent his Vice President, João Goulart, to China as head of a commercial delegation. As a matter of fact, Goulart was the first senior government official from Latin America to visit the New China since 1949. He was well-received by Mao Zedong and other Chinese leaders.
On April 2, 1964, nine Chinese journalists and trade representatives were arrested by Brazil’s pro-U.S. military government on charges of “fomenting revolution in Brazil”. They were jailed for one year.
After U.S. President Richard Nixon visited China in 1971 and PRC assumed the seat of China in the United Nations in 1972, many Latin American countries proceeded to change their stance toward the PRC. China and Brazil established diplomatic relations in August 1974. In the joint communiqué for this important development, it was stated that Brazil recognizes the one-China policy, and the two countries would develop their relations on the five basic principles of peaceful co-existence. [2]
In May 1984, Brazilian President João Baptista Figueiredo visited China. Then Chinese leader Deng Xiaoping took the occasion of his visit to put forward the well-known theory of a dichotomous international system comprised of “East and West” and “North and South.” Deng said, among the many issues that the world was facing then, the two most important were: to maintain peace by reducing East-West confrontation, and to promote international development so that it narrows the gap between the developed world (North) and the developing world (South).
When Chinese President Jiang Zemin visited Brazil in November 1993, the two countries announced the formation of a Strategic Partnership. Brazil thus became the first country to have a strategic partnership with China.
During this trip, the Chinese leader made a four-point proposal for the further development of the bilateral relations: 1) to deepen economic and trade relations between the two nations for the purpose of promoting mutual prosperity in an effort to set a good example for South-South cooperation; 2) to encourage people-to-people contacts in every field; 3) to strengthen consultations, coordination and mutual support in the international organizations for the purpose of safeguarding the rights of the developing countries and establishing a peaceful, stable, just and reasonable international political order; and 4) to maintain direct contact and dialogue between high-level officials so as to increase mutual understanding and trust.
Chinese President Hu Jintao went to Brazil in November 2004. He said that he and his Brazilian counterpart, Brazilian President Luis Inacio Lula, had agreed on four proposals on strengthening bilateral ties: 1) to strengthen mutual political trust and carry out consultation on an equal footing; 2) to tap potentials for expanding mutually beneficial economic and trade cooperation; 3) to coordinate and cooperate with each other in international affairs; and 4) to encourage people-to- people exchanges to deepen mutual understanding.
When Chinese Premier Wen Jiabao visited Brazil in June 2012, the two sides announced that the Strategic Partnership was to be upgraded to Comprehensive Strategic Partnership. China and the European Union set up their Comprehensive Strategic Partnership in 2003. During his visit to Europe, Premier Wen explained the meaning of this partnership: “Comprehensive” means that China-EU cooperation covers all areas at all levels; “strategic” signifies that this cooperation is based on overall long-term stability; and “partnership” indicates that this cooperation is characterized as being equal, mutual beneficial, win-win, mutual-respect and mutual-trust. [3]As the same vocabulary should have the same meaning, Premier Wen’s definition of the Comprehensive Strategic Partnership between China and the EU should also apply to that of the label for China and Brazil.
When Premier Wen Jiabao was in Brazil, China and Brazil decided to announce a ten-year cooperation plan. It lists the following areas as the most important: science and technology, innovation, space, energy, mining, finance, trade and people-to-people contact. The Chinese leader also put forward six proposals for the purpose of implementing the plan, namely, to promote trade and investment cooperation; to establish a stable, lasting and diversified resources partnership; to strengthen cooperation in infrastructure; to promote cooperation in the monetary and financial sector; to upgrade bilateral cooperation in high-tech, and to further exchanges in the sectors of culture, education and youth.
At the BRICS Summit in Durban, South Africa, in March 2013, President Xi Jinping met with Brazilian President Dilmar Rousseff and suggested that the two wheels, trade and investment between the two countries, need to move forward at the same speed and their comparative advantage should play an important role in this process. The Chinese leader also expressed China’s interest in convening a China-Latin America Cooperation Forum and President Rousseff supported this idea. [4]
Over the past four decades of their diplomatic ties, particularly since the Strategic Partnership was set up in 1993, China-Brazil relations have been developing steadily. In the economic field, China has become Brazil’s largest trade partner, the largest export market, the largest importer of Brazilian products, and also one of the largest investors. For China, Brazil is the largest trade partner in Latin America. Two-way trade had grown from US$1 billion in 1993 to almost US$90 billion in 2013. Brazil has enjoyed a large surplus for most of the years.
Two-way investment has also been going on. By the end of 2012, Chinese direct investment in Brazil had totaled US$1.4 billion. [5]The largest Brazilian investment in China was made by Embraer in 2002 to make airplanes. The Chinese media saw this project as a model of South-South cooperation in the manufacturing sector. According to China’s Ministry of Commerce, during 2002-2012, Brazil made 321 investment projects in China, totaling US$430 million. [6]
In 1988, China and Brazil started to implement a cooperation program in launching remote-sensing satellite. In November 2013 the two countries signed a ten-year space cooperation plan for 2013-2022. [7]Although the fourth satellite launched in December 2013 failed to enter orbit, its overall success should not be underestimated.
During the presidential visit of Dilmar Rousseff to China in April 2011, a joint laboratory for agricultural research to boost scientific cooperation between the two countries was inaugurated in Beijing. Additionally, a memorandum of understanding was signed between the two countries to establish the Brazil-China Center on Nanotechnology R&D, which would expand the fields of shared scientific interest even further by deepening joint research in the areas of bamboo technology, information and communication technology, water resources, renewable energy technology, and aerospace science. [8]
Cooperation in other new fields has witnessed progress. An “oil for loan” agreement was reached in May 2009. According to this agreement, China Development Bank would provide Brazil with a loan in the amount of $10 billion to finance the exploration for oil in Brazil’s pre-salt layer reserves within ten years. Brazil agreed to supply up to 100,000 barrels of oil per day to China.
Another important development came in October 2013. Two Chinese state-owned oil giants, China National Offshore Oil Corp and China National Petroleum Corp, as part of a consortium comprising Royal Dutch Shell, France’s Total SA and Brazil’s state oil company Petrobras, were awarded a 35-year production sharing contract to develop Libra, a deepwater oilfield off the Rio coast estimated to hold up to 12 billion barrels of oil. As a matter of fact, this is the first time that a Chinese company would be involved in the oil exploration process in Brazil because previous cooperation with the nation mainly involved oil production. [9]
In March 2013 China’s and Brazil’s central banks signed an agreement for currency swap totaling RMB190 billion (60 billion Brazilian Reals). [10]It was believed that this deal would enhance bilateral financial cooperation, facilitate trade and safeguard financial stability of the two sides. [11]
Another promising new area of cooperation is infrastructure. Brazil’s economic and social progress has long been impeded by the insufficiency of infrastructure. Problems such as traffic jams and delayed transportation of products for export have become a headache. Chinese companies have the capital, technology and manpower to undertake infrastructure projects in Brazil. [12]In December, 2012, for instance, the State Grid Corporation of China (SGCC), together with Brazil’s Copel and Furnas, won a bid for a power transmission project in Brazil. The three companies plan to invest US$450 million in the project, which includes a 967-kilometer 500-kv transmission line and expansion for four 500 kv transformer substations. [13]
In the political field, apart from frequent visits by the top leaders and other high-level officials, there are also cooperation mechanisms such as the China-Brazil High-level Coordination and Cooperation Committee and the Strategic Dialogue between Foreign Ministers. The Communist Party of China has built working relations with all the major political parties in Brazil.
People-to-people exchanges have also witnessed progress. By now five Confucius Institutes have been established across Brazil. More and more Brazilians are learning Chinese and more and more Chinese universities have offered courses of learning Portuguese. During his trip to Brazil, Premier Wen Jiabao announced that 200 scholarships would be offered for Brazilians to study in China. Furthermore, both sides have organized many kinds of exhibitions and other cultural activities. China has even sent junior football players to Brazil for training.
Eight Myths of China-Brazil Relations
Despite the fact that China’s relationship with Brazil has developing rapidly over the past four decades of diplomatic relations, there are eight myths that need to be defused.
Myth 1: There is a brewing tension between China and Brazil that people don’t fully appreciate.
This myth holds that, on the surface, there is ample reason for coordination and economic complements between the two countries because 1) Brazil is a huge exporter of commodities, and China is a big consumer; 2) they don’t share a border, and they invest in each other’s economies; and 3) the Chinese government and state-owned enterprises, always in need of food for its 1.3 billion people, are buying up Brazilian land and investing in Brazilian companies. However, as the myth goes, beneath the surface are growing pressures, even if neither country will publicly admit it. “Brazil shies away from criticizing China directly, but that doesn’t mean tensions aren’t growing. In fact, Brazil’s hesitancy is symptomatic of the countries’ increasingly complex relationship,” writes a commentator. [14]
This myth can be easily mollified. As is pointed out in the previous section of the paper, China-Brazil relations have achieved remarkable progress since they announced the establishment of a strategic partnership. It is true that there are some problems in the bilateral relations, but they have not reached to the height of “tensions”. As a matter of fact, any bilateral relations, even that of the United States and Europe, can come up with some problems. Naturally, the more rapid the development of the bilateral relations, the easier problems will appear.
Meeting with President Rousseff ahead of the G20 Summit in the Russian city of St. Petersburg on September 5, 2013, President Xi Jinping said that China and Brazil should give full play to their complementary advantages and boost cooperation in such fields as energy, mining, agriculture and infrastructure construction. President Rousseff said Brazil hopes to strengthen high-level coordination with China and optimize the structure of two-way trade. She said that Brazil is willing to play a role in advancing ties between China and the Latin American region. She invited her Chinese counterpart to visit Brazil and attend the BRICS Summit in 2014, a special year which marks the 40th anniversary of the establishment of diplomatic relations between Brazil and China. [15]
On November 7, 2013, President Xi Jinping met with Brazilian Vice President Michel Temer in Beijing. [16]He said that China will work with Brazil to maintain the close communication between state leaders, increase cooperation, and strengthen consultation and coordination in global affairs. He added that China supports Brazil as host of the 2014 BRICS Summit and wished success for the 2014 FIFA World Cup in Brazil. The Brazilian guest said that Brazil is happy with the smooth development of Brazil-China strategic partnership and noted that Brazil is willing to strengthen high-level contacts with China and advance bilateral cooperation in various fields through the mechanism of the China-Brazil High-level Coordination and Cooperation Committee. He also added that Brazil will strengthen communication and cooperation with China within the framework of BRICS, promote global governance and jointly push forward the development of the relationship between Latin American countries and China. [17]
On January 20, 2014, just days before the traditional Chinese spring festival, President Rousseff sent her greeting to Chinese Ambassador Li Jinzhang, wishing the Chinese a happy Year of the Horse. [18]
Myth 2: China only wants to import raw materials from Brazil and does not wish to make direct investment there.
The reality is that China wants to increase its investments in Brazil and elsewhere. At the end of the 1990s, the Chinese government began to implement its “going global strategy”, which encourages public and private enterprises to make direct investment in foreign countries, including Brazil. [19]This strategy is easily understood. World economic history shows that a country will begin to export capital when it becomes rich. China has witnessed high economic growth for three decades, and that has enabled China to invest in foreign countries.
In order to attract more Chinese investment, Brazil has to improve its investment climate. Chinese investors have been complaining about a complicated tax system, wide-spread corruption, poor infrastructure, red-tape, the “Brazilian cost”, and a rising crime rate, among other issues.
According to a report by the Reuters in November 2012, Wuhan Iron and Steel Group, China’s fourth-largest steel producer, had shelved plans to build a steel mill in Brazil after negotiations on infrastructure investment floundered. [20]Earlier, it was also reported that Baosteel, China’s largest steel maker, had to cancel an investment project in Brazil due to the failure to reach agreement on environmental issues. Baosteel’s investment was said to be the largest foreign venture in this South American nation if it could have materialized. [21]
Some Brazilians were disappointed by the extent of Chinese investments in the region, saying that China’s promises were “lots of smoke and little fire,” in reference to President Hu Jintao’s alleged promise to offer $100 billion in direct investment in Latin America when he spoke to the Brazilian congress during a visit in November 2004. In fact, President Hu was referring to overall China-Latin American trade value by the year 2010, and not specifically targeted investment. In terms of investments, President Hu stated that he hoped both China and Latin America would double the current stock of Chinese investment in the region by 2010. At that time, the total stock of Chinese investment was US$4 billion. [22]
Needless to say, on the Chinese side, it is important for the investors to “do as the Romans do” by undertaking more social responsibility and following local regulations and ways of doing things.
Furthermore, China must heed the concern of Brazil, which has been asking for reciprocity for Brazilian investment in China. Former Brazilian Ambassador Clodoaldo Hugueney believed that it was not easy for Brazil to “obtain permits” for investments from Brazil. [23]
Myth 3: China’s imports of Brazil’s raw materials have made it hard for the South American nation to escape the “Dutch Disease” or the so-called trap of “resource cursing”, meaning it will not be able to upgrade its industrial structure.
According to this myth, exports to and investment from China has been concentrated in the commodities sector. This raises the risk of Brazil’s suffering from “Dutch Disease”, where commodity-led growth pushes up the real exchange rate, redirects labor and capital towards the natural resources sector and squeezes the manufacturing sector. This is part of the reason why Brazil’s currency Real looks so overvalued and why its manufacturers are struggling to compete. [24]
President Rousseff was reported to say that Brazil wants to inaugurate a new phase of relationship with China. She hoped to see that “challenge for the coming years” would be to transform Brazil’s trade relationship with China to feature “a qualitative leap”, i.e., exporting higher value-added products such as aircraft, not just agricultural products like soybeans, iron ore and oil. She even said, “We need to go beyond the complementarity of our economies [...] to encourage a dynamic, diversified and balanced relationship.” [25]
It is true that raw materials and primary products account for lion’s share of Brazil’s exports to China. But it does not mean that Brazil’s failure to upgrade its economic structure can be blamed on China.
The economies of China and Brazil are complementary and their respective comparative advantage plays a decisive role in helping both sides expand market share and develop economic relations. Brazil is well-endowed with natural resources such as iron ore, petroleum, bauxite, gold, manganese, nickel, phosphates, platinum, tin, uranium, hydropower, timber, etc. China’s economy is resource-intensive, and the country is dependent on importing natural resources in order to sustain its high-speed growth.
As a matter of fact, every nation should utilize its comparative advantage. How can Brazil’s economy develop if it leaves its abundant resources alone? If China does not import those resources, Brazil will sell them to other countries. Therefore, Brazil cannot criticize China for the failure to restructure its industrial structure.
The fact is Brazil benefits from the rising prices of its resources because of China’s huge demand. This has been acknowledged by many economists around the world as well as by the World Bank and the UN Commission for Latin American and the Caribbean.
Myth 4: The value of the Chinese currency is kept too low, thus putting Brazil in an unfavorable position to compete with China.
Some Brazilian government officials and business leaders are quite critical about the RMB’s exchange rate. According to them, competitiveness of Chinese products on the Brazilian market results from the low value of the RMB. Speaking ahead of a meeting of the G20 finance ministers and central bank governors in Washington in April 2010, Brazilian central bank president, along with his Indian counterpart, made the most forceful statements yet by their countries about the value of RMB. [26]Sadly, this criticism came just shortly after the BRIC summit in Brazil when the ink of the joint communiqué of the summit was still wet.
According to a news report, even President Rousseff, in part pressured by a relentless rise in the value of Real, Brazil’s currency, has pointed to the RMB as a threat, flooding her country with cheap Chinese imports and eroding Brazil’s export competitiveness. [27]
It should not be ruled out that the US tried to influence Brazil on this issue. In February 2011, for instance, US Treasury Secretary Timothy Geithner visited Brazil where he urged President Roussef to do more to lobby Beijing to let its currency float. [28]
On November 5, 2012, Brazil circulated a proposal explaining that WTO rules contain language about dealing with currency-related trade distortions but no adequate instruments to act directly. According to this proposal, “The WTO seems to be systemically ill-equipped to cope with the challenges posed by the macro- and micro-economic effects of exchange rates on trade…Members may wish, against this background, to consider the need for exchange rate trade remedies and to start some analytical work to that effect.” [29]
China rejected Brazil’s proposal of using world trade rules to compensate for currency misalignments during a debate at the WTO. The currency issue is in the monetary field. Therefore, it should be dealt with by the IMF, not the WTO. And, the right path to resolve this issue is by enhancing the responsibility of and promoting coordination among the international reserve currency issuers.
However, it does not mean that China should not make its exchange rate more flexible according to dynamic external and internal conditions. As a matter of fact, the value of RMB has been on the rise continuously over the past several years and its value is not the cause of Brazil’s failure to sell more to the Chinese market. In order to make Brazilians better understand the RMB issue, communication and dialogue between China and Brazil are definitely positive and necessary.
Myth 5: Brazilian manufacturers are getting killed by cheap Chinese imports that make Brazil’s industry uncompetitive in the global marketplace and at home.
With the rapid growth of Chinese exports to Brazil, a sense of “China threat” or “fear of China” emerged. Those who subscribe to such a mentality believe that the influx of Chinese products is a threat to local Brazilian businesses. For instance, Roberto Giannetti da Fonseca, head of trade issues at the Industrial Federation of the State of São Paulo, Brazil’s most powerful business association that represents industry in the state of São Paulo, said that China is “not a strategic partner,” and Beijing merely “wants to buy raw materials with no value added and to export consumer goods”. [30]
Indeed, closer economic relations tend to generate frictions and disputes. This is true for any partners. As a matter of fact, Brazil was the first Latin American country to impose anti-dumping measure against Chinese exports in December 1989. Even though China was granted the “market economy status” in November 2004, Brazil continues to levy anti-dumping tariffs against China, sometimes against WTO rules. In October 2005, under the pressure of the business community, President Lula signed an order that allowed the government to restrict imports of Chinese products by imposing temporary safeguards until 2013.
But the relatively cheap Chinese products in the Brazilian market are nice things. For instance, they have contributed to the Brazilian government’s efforts to control inflation and meet the basic needs of the low-income class. Before the 1990s, inflations had been a severe headache for successive governments in Brazil, but the pressure remains. Because most of Chinese products are cheaply priced, the poor people in Brazil have benefited greatly. According to an article published in theFinancial Times,everything in a small shop in São Paulo’s Paraisópolis favela, or slum, was made in China. “It’s just so much cheaper,” the shop owner said, pointing out items that would cost over five times as much if they had been manufactured in Brazil. “It has to be; otherwise lots of people here couldn’t afford it.” [31]
Myth 6: China’s market is not widely open to Brazil.
Brazil has been seeking to expand its market share in China. In this process, many people in Brazil believe that China enters the Brazilian market aggressively but hesitates to import more Brazilian products.
As a matter of fact, China welcomes all foreign products. As a WTO member, China is not able to grant special treatment to a certain trade partner’s products. That is to say, Brazil needs to become more competitive on the Chinese market. In the age of globalization, competitiveness matters. Because China’s economy is market based, the Chinese government cannot order a firm to purchase products from a certain country. Indeed, as Ambassador Clodoaldo Hugueney noted in 2011, “The Chinese response was positive and seen in specific gestures, as in the cases of the meat products and Embraer planes, as well as the support for initiatives aimed at changing Brazil´s exports, with the inclusion of higher added industrial products.” He also said that the visit by Chen Deming, Chinese Minister of Commerce, to Brazil and the meeting of the Economic and Trade Sub-commission and its working groups in May of that year also showed the Chinese government´s desire to continue with the agreements reached during the presidential visit. [32]
Brazil produces many kinds of agricultural and manufactured products and wishes to sell them to China. However, other countries, including its neighbors in South America, also want to take advantage of the large market in China. Therefore, Brazil has to face competition from other countries around the world and needs to design a strategy to sell more to the Chinese market. For instance, as Ambassador Clodoaldo Hugueney suggested, Brazil’s private sector might need to “identify potential demand for Brazilian products in the most populous country in the world and implement a business strategy that allows for a piece of this demand”. [33]
Myth 7: China does not support Brazil’s effort to become a permanent member of the United Nations Security Council.
The international community has increasingly recognized the need to reform the United Nations so that it can be more legitimate, efficient and responsive to realities. One necessary step towards this end is to increase permanent memberships of its Security Council.
It is understandable that, as a regional power, Brazil wants to occupy a seat in the UN Security Council. In his speech at the 58th UN General Assembly on 23 September, 2003, President Lula said, “Reform of the United Nations has become an urgent task given the present risks to the international political order. The Security Council must be fully empowered to deal with crises and threats to peace. It must therefore be equipped with the tools for effective action. Above all, its decisions must be seen as legitimate by the Community of Nations as a whole. Its composition – in particular as concerns permanent membership – cannot remain unaltered almost 60 years on. It can no longer ignore the changing world. More specifically, it must take into account the emergence in the international scene of developing countries. They have become important actors that often exercise a critical role in ensuring the pacific settlement of disputes.” [34]
According to President Lula, Brazil believes that it has a useful contribution to make. It seeks not to advance an exclusive conception of international security, but rather to give expression to the perceptions and aspirations of a region that today is a hallmark of peaceful co-existence among its members and that is a force for international stability. Given the support received within South America and beyond, Brazil is encouraged to continue advocating for a Security Council that better reflects contemporary reality. [35]
To increase likelihood of gaining the permanent membership of the UN Security Council, Brazil, Germany, India and Japan formed an interest group later known as the G4. But many countries were opposed to the G4 becoming permanent members with a veto power. They favored the expansion of the non-permanent category of seats with members to be elected on a regional basis. Italy, Pakistan, Mexico and Egypt started to form an interest group, known as the “Coffee Club” and later “Uniting for Consensus”. At the same time, the African Group started to demand two permanent seats for themselves, on the basis of historical injustices and the fact that a large part of the Security Council’s agenda is concentrated on the continent. [36]
It is a pity that Brazil’s ambition has not materialized. Some Brazilians complained that, as a strategic partner, China did not offer great help for Brazil’s efforts. Otherwise, it might have succeeded.
As a matter of fact, China supports the reforms of the UN and favors stronger representation of developing countries. Therefore, it backs Brazil’s endeavor. However, China opposes Japan’s efforts to gain permanent membership as it still refuses to recognize its past war crimes, which caused great human losses to China and some other Asian countries. Therefore, Brazil cannot blame China.
According to the Joint Statement of the Fifth BRICS Summit in Durban on March 26 and 27, 2013, the group reiterated its strong commitment to the UN as the foremost multilateral forum entrusted with bringing about hope, peace, order and sustainable development to the world. “The UN enjoys universal membership and is at the centre of global governance and multilateralism. In this regard, we reaffirm the need for a comprehensive reform of the UN, including its Security Council, with a view to making it more representative, effective and efficient, so that it can be more responsive to global challenges. In this regard, China and Russia reiterate the importance they attach to the status of Brazil, India and South Africa in international affairs and support their aspiration to play a greater role in the UN,” the BRICS document noted. [37]
Myth 8: China and Brazil are scrambling for Africa.
Since China and Egypt established diplomatic ties in 1956, bilateral ties between China and Africa have been developing steadily. Particularly in the past one or two decades, trade, investment and other areas of cooperation have achieved great progress. In October 2000, the Forum on China-Africa Cooperation was set up. Its aim is to serve as a platform for initiating equal consultation, enhancing understanding, expanding consensus, strengthening friendship and promoting cooperation. So far five ministerial conferences have been held either in Beijing or in Africa. Needless to say, the current bilateral relationship between China and Africa is built on the friendship exemplified by the well-known Tanzania-Zambia railway.
Brazil’s relations with Africa have also been proceeding rapidly. According to a report published by the Chatham House in 2012, over the last decade, Brazil had expanded its engagement with Africa by doubling its diplomatic presence from 17 to 37 embassies, raising trade with Africa in the same period from US$4.2 billion to US$27.6 billion, oil and other natural resources account for 90% of Brazil’s imports from the continent. Indeed, Brazilian policy-makers see Africa’s biggest potential as providing a consumer market for their country’s manufactured goods.
Politically speaking, as the Chatham House reports noted, Brazil also uses its Africa policy as a means to achieve its foreign policy goal of being recognized as a major power and South–South cooperation is a key driver of Brazil’s Africa policy as it is seeking support for a permanent UN Security Council seat. Biomedical and health research and agricultural research have been turned into effective foreign policy instruments. [38]
But the warm relations between China and Africa on the one hand and between Brazil and Africa on the other have been wrongly described as a “new Africa scramble”. According to Nikolas Kozloff, “While European nations such as Britain and France dominated Africa and vied for influence some one hundred years ago, the next geopolitical struggle could pit none other than China against an increasingly more assertive Brazilian dynamo.” [39]Ed Cropley, a Reuters journalist covering international and economic affairs from Johannesburg, South Africa, saw China and Brazil as “new colonialists” locked in a trade battle for Africa’s rich resources. [40]
This kind of accusation is unfounded. It is true that in the process of developing their own relations with Africa, China and Brazil might meet with competition. But in the age of globalization, competition is everywhere, even among European countries, who have greater sphere of influence in Africa, and also between Europe and the United States. In other words, it is quite logical for China and Brazil to have competition on the African market. Days are gone when only Europe had the dominant position in Africa. And, China, Brazil and Africa need to be aware of the intention of the west to play the game of alienating one from the other.
But competition between China and Brazil in Africa also involves cooperation. As many Chinese scholars have pointed out, a triangulation among Africa, China and Brazil is emerging, and it can benefit South-South cooperation as well as all the three parties.
Concluding Remarks
The China-Brazil relations have achieved great progress over the past one or two decades. However, there are eight myths that must be demystified. These myths are the result of a lack of mutual understanding as well as the misconceptions of the western observers and media. Therefore, these misunderstandings have jeopardized images of the China-Brazil relations and also hindered further development of their bilateral relationship.
The daunting task for China and Brazil to strengthen their ties is to make their comprehensive strategic partnership more realistic and meaningful. While different people have different understanding of this partnership, there is no doubt that it is the highest stage of their bilateral relationship in the foreseeable future. Both China and Brazil must nourish this “political marriage certificate”.
Deepening mutual understanding and increasing mutual trust lies at the core of the China-Brazil relations. This objective can be reached only through more exchanges and dialogues at the governmental and people-to-people levels.
As the platform of exchanges and cooperation between China and the Portuguese-speaking countries, Macau can play a unique role in promoting mutual understanding between China and Brazil. It hosts the Permanent Secretariat of the Forum for Economic and Trade Cooperation between China and the Portuguese-Speaking Countries. Brazil is the largest Portuguese-speaking partner in this Forum. Consequently, to make the Forum a real successful bridge between China and the Portuguese-speaking countries, China must attach more importance to Brazil.
Before Brazil, Cuba, Chile, Peru, Mexico, Argentina, Guyana, Jamaica, Trinidad and Tobago, and Venezuela had already set up diplomatic ties with China.
[2] http://news.xinhuanet.com/ziliao/2004-11/04/content_2177218.htm
[3] http://www.china.com.cn/chinese/zhuanti/wjbfo/563579.htm
[4] http://hi.people.com.cn/n/2013/0328/c231187-18369188.html
[5] Ministry of Commerce, National Bureau of Statistics and SAFE: 2012 Statistical Bulletin of China’s Outward Foreign Direct Investment,China Statistics Press, 2013, p. 42.
[6] Ministry of Commerce, 2013 Report on Foreign investment in China, p.82. (http://images.mofcom.gov.cn/wzs/201312/20131211162942372.pdf)
[7] http://politics.people.com.cn/n/2013/1106/c1001-23456749.html
[8] Conselho Empresarial Brasil-China, “Interview with the Brazilian Ambassador to China, Clodoaldo Hugueney” China Brazil Update, Issue 2, April-May, 2011, p.7.
[9] http://usa.chinadaily.com.cn/world/2013-11/06/content_17083995.htm
[10] http://news.xinhuanet.com/english/china/2013-03/22/c_132255193.htm
[11] http://news.xinhuanet.com/english/china/2013-03/22/c_132255193.htm
[12] China Railway Construction Corporation Limited, for instance, is now one of the world’s 100 largest companies of the kind, and is capable of taking on almost any infrastructure projects.
[13] http://english.peopledaily.com.cn/90778/8071704.html
[14] Ian Bremmer, “The underappreciated tensions between China and Brazil”, May 29, 2013.
(http://in.reuters.com/article/2013/05/28/column-bremmer-india-china-brazil-idINDEE94R0GT20130528)
[15] http://www.chinadaily.com.cn/china/2013xivisitcenterasia/2013-09/05/content_16947666.htm
[16] Michel Temer attended the third session of the China-Brazil High-level Coordination and Cooperation Committee in Guangzhou, Guangdong Province. He and Chinese Vice Premier Wang Yang co-chaired the meeting.
[17] http://news.xinhuanet.com/english/china/2013-11/07/c_132868467.htm
[18] http://br.china-embassy.org/chn/gdxw/t1122344.htm
[19] On 12 October 1992, Jiang Zemin, then Secretary-General of the Communist Party of China, listed ten major overall tasks in a report to the 14th Party Congress of the CPC, the second of which was to “become more open to the outside world, making further and better use of foreign funds, resources, technologies and management expertise.” Jiang Zemin visited six African countries between 8 and 22 May 1996. One month later, on a trip to Tangshan, Hebei Province, he said: “We must study how state-owned enterprises can ‘go out’ in a targeted and organized manner, and make good use of international markets and foreign resources. There are huge potentials in the vast markets of developing nations. We need to look further afield, to the future, focusing on the long-term, and work to strengthen economic and technical cooperation with these companies, including using their markets and resources to form joint ventures and cooperative operations.” This was the first time he used the phrase “going out”.
[20] http://www.reuters.com/article/2012/11/11/us-china-steel-wuhan-idUSBRE8AA04D20121111
[21] http://www.chinadaily.com.cn/bizchina/2009-01/20/content_7411582.htm; http://info.bm.hc360.com/2009/04/24091290757.shtml
[22] http://news.xinhuanet.com/newscenter/2004-11/13/content_2213620.htm
[23] Conselho Empresarial Brasil-China, “Interview with the Brazilian Ambassador to China, Clodoaldo Hugueney” China Brazil Update, Issue 2, April-May, 2011, p. 5.
[24] http://en.mercopress.com/2011/04/11/brazil-aware-its-relation-with-china-raises-the-risk-of-dutch-disease
[25] http://www.cpdcngo.org/stvincent/index.php?option=com_content&view=article&id=74:brazils-rousseff-wants -new-phase-in-china-ties&catid=3:news&Itemid=57
[26] http://www.ft.com/cms/s/0/1d692fd2-4d1c-11df-baf3-00144feab49a.html#axzz2R6Hg7uxv
[27] http://en.mercopress.com/2011/02/14/china-not-too-worried-about-india-brazil-s-criticism-of-yuan-policy
[28] http://en.mercopress.com/2011/02/14/china-not-too-worried-about-india-brazil-s-criticism-of-yuan-policy
[29] http://www.reuters.com/article/2012/11/26/us-wto-currencies-idUSBRE8AP0XJ20121126
[30] The Economist,August 4, 2005. (http://www.economist.com/node/4249937)
[31] http://www.ftchinese.com/story/001038207/en
[32] Conselho Empresarial Brasil-China, “Interview with the Brazilian Ambassador to China, Clodoaldo Hugueney” China Brazil Update, Issue 2, April-May, 2011, p. 5.
[33] Conselho Empresarial Brasil-China, “Interview with the Brazilian Ambassador to China, Clodoaldo Hugueney” China Brazil Update, Issue 2, April-May, 2011, p. 5.
[34] http://www.brazil.org.uk/press/speeches_files/20030923.html
[35] http://www.brazil.org.uk/press/speeches_files/20030923.html
[36] Those two seats would be permanent only for African countries and rotate among them.
[37] http://www.brics5.co.za/fifth-brics-summit-declaration-and-action-plan/
[38] Christina Stolte, “Brazil in Africa: Just Another BRICS Country Seeking Resources?” Africa Programme and Americas Programme, Chatham House, November 2012. http://www.chathamhouse.org/sites/default/files/public/Research/Africa/1112bp_brazilafrica.pdf
[39] http://www.huffingtonpost.com/nikolas-kozloff/new-africa-scramble-china_b_3148780.html
[40] http://www.businessdestinations.com/work/opinion/the-scramble-for-africa/